The Office of the Treasury Inspector General (TIGTA) has released a report indicating
that when the IRS assumes responsibility for customer service with
regard to the Affordable Care Act in 2015, the agency may encounter
challenges.
The Affordable Care Act (ACA) includes tax
provisions that require individuals to maintain minimum essential
coverage (MEC) and that provide for a tax credit (Premium Tax Credit) to
offset an individual’s health care expenses. The IRS will impose a
penalty on any taxpayer who, after Calendar Year 2013, fails to maintain
the MEC for three months or more and does not qualify for an
exemption.
The TIGTA audit was initiated to
evaluate the IRS’s efforts to provide individuals assistance related to
the ACA provisions on obtaining the MEC and the tax credit to offset
health care expenses. Starting in October 2013, individuals who seek to
acquire the MEC for Calendar Year 2014 will be offered a choice of
health plans and the ability to determine their eligibility for a tax
credit through one of the State Marketplaces or the Federal
Marketplace.
The IRS’s customer service strategy is
a collaborative and coordinated effort between the IRS and multiple
Federal and State agencies. The strategy includes sufficient plans to
1) perform outreach and education; 2) update or develop tax forms,
instructions, and publications; and 3) provide employee training to
assist individuals in understanding the requirement to maintain the MEC
and the tax implications of obtaining the tax credit to offset the cost
of health care insurance.
In a May 2012 Memorandum of
Understanding between the IRS and the Department of Health and Human
Services (HHS), it was agreed that the HHS would be the lead agency and
serve as the “public face” for customer service at the Marketplaces
until Calendar Year 2015. Individuals who contact the IRS for ACA
assistance will be referred to the HHS’s public website (Healthcare.gov)
and toll-free telephone assistance lines. The IRS will also refer
individuals to its own recorded telephone messages and self-assistance
tools.
In Calendar Year 2015, the IRS will
take the lead to provide customer service when individuals begin filing
their 2014 tax returns and must include the amount of any Advance
Premium Tax Credit payments on their tax return and reconcile it to the
allowable amount. The IRS’s customer service will include providing
face-to-face assistance at its 390 Taxpayer Assistance Centers located
throughout the United States.
However, changes in ACA implementation
will create challenges. Depending on the nature of any changes made to
ACA tax provisions, the IRS’s strategy and plans to provide customer
service, outreach, education, and employee training could be affected.
Changes to the provisions could also affect the IRS’s plans to update
its tax forms, instructions, and publications.
TIGTA did not make recommendations in
this report. A draft of the report was provided to IRS management for
review. The IRS did not provide comments on the report.
Source: http://www.treasury.gov/tigta/auditreports/2014reports/201443006fr.html
Circular 230 Disclosure
Pursuant to the requirements of the Internal Revenue Service Circular 230, we
inform you that, to the extent any advice relating to a Federal tax issue is
contained in this communication, including in any attachments, it was not
written or intended to be used, and cannot be used, for the purpose of (a)
avoiding any tax related penalties that may be imposed on you or any other
person under the Internal Revenue Code, or (b) promoting, marketing or
recommending to another person any transaction or matter addressed in this
communication
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