Tuesday, May 12, 2015

ACA report by the Treasury Inspector General for Tax Administration (TIGTA) Released

Dana Halvorson

On May 7, the Treasury Inspector General for Tax Administration (TIGTA) issued a report on the IRS readiness to ensure compliance with minimum essential coverage and shared responsibility payment requirements under the Affordable Care Act (ACA). According to the TIGTA’s May 7 press release, “beginning in January 2014, the ACA requires each individual to have basic health insurance coverage known as Minimum Essential Coverage (MEC) or pay an additional tax which is referred to as a Shared Responsibility Payment (SRP). The ACA allows for exemptions from the MEC requirement. Exemptions can be obtained from a Health Care Exchange or from the IRS. 

The objective of this TIGTA review was to evaluate the status of the IRS’s preparations for determining whether taxpayers maintained MEC or met exemption requirements, and its preparations for assessing the SRP during the 2015 Filing Season. TIGTA found that the Treasury Department has delayed employer and insurer reporting of health insurance information until March 2016. Therefore, the IRS has not developed processes and procedures to verify compliance with MEC requirements for the 2015 Filing Season. 

However, the IRS will assess MEC compliance on Tax Year 2014 tax returns that it identifies through its normal examination compliance activity. To assist tax examiners, the IRS developed a tool to compute the SRP. TIGTA found that this tool accurately computes the SRP. In addition, TIGTA believes the tool would be helpful to taxpayers and should be made available on IRS.gov. Also, the IRS plans to use information obtained during the 2015 Filing Season to develop post-processing compliance strategies to be used in future years.” 

The press release also included that “TIGTA recommended that the Director, Affordable Care Act Office, add an online SRP calculation tool to IRS.gov for the 2016 Filing Season, in a continued effort to provide taxpayers with self-assistance interactive tools. The IRS agreed with this recommendation and plans to assess the feasibility and cost to provide an online SRP estimator tool.”

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