The Internal Revenue Service (IRS) seems to have had problems calculating the allowable premium tax credit for about 7 percent of the taxpayers who used the credit in 2014 — and then reported it on their tax returns for that year.
Officials at the office of the Treasury Inspector General for Tax Administration (TIGTA), a watchdog agency that keeps tabs on the IRS, reported that finding in a recently released report.
The U.S. Department of Health and Human Services (HHS) paid $15.5 billion in Patient Protection and Affordable Care Act (PPACA) advance premium tax credit subsidies to health insurers in calendar year 2014 on behalf of 11 million PPACA exchange plan enrollees.
As of mid-2015, individual taxpayers had reported $9.8 billion of the premium tax credits on their individual tax returns, according to a TIGTA report released in March.
In the new report, TIGTA officials looked at IRS efforts to reconcile the information on individual’s returns, data from PPACA exchange program administrators, and other sources.
Investigators analyzed data on 2.6 million returns filed from Jan. 20, 2015, through May 28, 2015.
TIGTA officials found that programming errors threw off calculations for 27,827 of the returns, and that unknown problems led to reconciliation problems for 150,385 returns.
The IRS identified possible evidence of fraud in 52,512 returns. As of July 23, 2015, the agency had closed 18,693 fraud causes, and those efforts may have protected about $43 million in premium tax credit dollars, officials say.
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