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July 08, 2016 at 02:32 PM
The Taxpayer Advocate Service has revealed a little more information about how the Internal Revenue Service is handling Affordable Care Act tax provision administration, in a new report on IRS efforts to meet its objectives for federal fiscal year 2017.
Federal fiscal year 2017 starts Oct. 1.
Congress set up the advocate service in an effort to create an independent organization, inside the IRS, that can help taxpayers resolve disputes with the IRS.
The service’s report covers a wide range of issues of concern to taxpayers, including many taxpayers’ anger about IRS efforts to push them to do business online.
The leader of the service, Nina Olson, the National Taxpayer Advocate, said, for example, that the IRS seems to be ignoring the “digital divide” in its official planning framework.
One ACA-related section in the report focuses on IRS efforts to implement the ACA employer shared responsibility provisions.
Related: ACA employer mandate may start two-step fights
Another section focuses on what the advocate saw as the IRS administered the ACA health insurance premium tax credit subsidy program. Taxpayers began using 1095-A coverage notices from exchanges to fill out their first wave of 8962 premium tax credit reporting forms for their 2014 returns, which they filed in early 2015. Earlier this year, they sent the IRS 8962 premium tax credit reporting forms for 2015.
Related: How draft ACA tax regulations could affect your clients
For a look at what Olson’s office saw when it looked at the second year of operation of the premium tax credit program, based both on the new report and the report for the 2014 benefit year, read on:
(Image: IRS)
1. Many more people filed returns with the 8962 premium tax credit form.
The number of 8962 forms submitted increased to 4.8 million for 2015, up 85 percent, from 2.6 million, for 2014.
Related: Tax preparers return to ACA fog
Increases in the full cost of ACA exchange plan coverage did not seem to lead to much change in the average of subsidy help taxpayers reported receiving in 2015. (Photo: Thinkstock)
2. The average premium tax credit amount per return stayed about the same.
The average premium tax credit amount reported fell, very slightly, to $2,987 for 2015, from $3,000 for 2014.
Related: HHS analysts: Average HealthCare.gov plan premium rose 8.8 percent
Typical exchange plan premium subsidy users may not be able to wait until the spring after the end of the benefit year to get their premium subsidies. (Photo: Thinkstock)
3. The percentage of people who received the tax credit in the form of an advanced tax credit increased slightly.
The moderate-income consumers who qualify to use the tax credits to pay for exchange plan coverage can choose whether to get the tax credit in an advanced form, as the benefit year is under way, which means that they must guess what their income will be during the benefit year and go through a complicated reconciliation process when they file their tax returns for that year.
Consumers can also make their taxes simpler, by waiting until they file their tax returns for a benefit year to get their subsidy help for that year.
The IRS has found that most taxpayers choose to get the help the faster, more complicated way.
The percentage who received the tax credit subsidy in the form of an advanced premium tax credit was 93 percent in 2014.
For 2015, 94 percent of the taxpayers who reported receiving the subsidy chose the advance payment option.
Related: IRS: 2014 ACA exchange users received $30 billion in subsidies
