Individual taxpayers paid most of the Affordable Care Act-related amounts they reported owing for 2014 by the end of 2015.
About 94.5 percent of the individual filers who reported owing individual shared responsibility penalties, or individual mandate penalties, for 2014 paid the penalties by the end of 2015, according to TIGTA.
About 97 percent of the individual filers who told the IRS they had received too much ACA premium tax credit help in 2014 paid the excess tax credits back by the end of 2015, TIGTA officials say.
The watchdog agency prepared the report to look at how well the IRS followed ACA tax collection rules.
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To evaluate IRS compliance with the ACA collection rules, TIGTA needed information about how many individual taxpayers had reported owing ACA-related amounts, and how many of those taxpayers had paid the ACA-related bills.
In 2012, the Obama administration used a law that protects new federal taxes to defend the constitutionality of the ACA individual mandate, but it and the IRS are careful not to refer to the individual mandate penalty or the premium tax credit repayments as taxes.
The ACA imposes the individual mandate penalties on people who fail to owe “minimum essential coverage,” or what the government classifies as solid major medical coverage, for all or part of the year. ACA drafters added that rule to try to push healthy people to pay for health coverage even when they feel they are unlikely to need health care.
The ACA also provides a tax credit that helps people pay for ACA exchange plan health coverage. To get the tax credit in advance, while the benefit year is still under way, people tell an ACA exchange how they think they’ll earn in the coming year.
Many exchange plan tax credit users who get too much help, because they earn more than they predict, are supposed to pay part or all of the excess tax credit help get back to the IRS.
The IRS can easily take amounts people report owing out of their tax refunds. It has only a limited capacity to collect delinquent payments from individuals through other means.
When the ACA tax programs were taking shape, some IRS watchers wondered how well consumers would comply with the new ACA tax rules.
Some people who failed to send penalty payments to the IRS were dead. (Photo: Allison Bell/LHP)
2014 ACA payment numbers
In the IRS collections rule compliance report, TIGTA officials look only at individual filers who reported owing ACA-related amounts to the IRS on their tax returns. They leave people who failed to report ACA-related obligations to the IRS out of the analysis.
About 8.1 million individual filers told the Internal Revenue Service they owed a total of $1.7 billion in penalties, or $206 each, because they lacked minimum essential coverage for all or part of 2014.
About 5.5 percent of those taxpayers still owed the IRS penalty payments in December 2015.
The IRS was still sending 26 percent of those taxpayers late notices, and it had worked out payment plans with 30 percent. It was actively trying to collect payments from 11 percent. The IRS had written off 27 percent of the late payments, or 1.5 percent of all of the penalty payments owed.
The IRS wrote off some of those late payments because the people who owed the payments were dead, TIGTA says.
When TIGTA officials looked at what happened the ACA advance premium tax credits, they found that, as of August 2015, 1.6 million taxpayers had reported receiving a total of $2 billion in excess advance premium tax credits in 2014.
The ACA and federal ACA regulations limit how much of the excess tax credit help people with household income under 400 percent of the federal poverty level have to pay back.
Taxpayers were supposed to repay about $1.3 billion of the excess premium tax credit help they reported owing, or an average of about $810 each, TIGTA officials say.
By August 2015, most of the low-income people had paid back most of the excess tax credit help they had reported owing. Tigher-income people had paid still owed about $393 million of the $475 million in excess tax credits they were supposed to pay back.
By December 2015, only 39,056 still had to pay excess tax credit help back. They owed $43 million, or about $1,100 each, to the IRS, according to TIGTA figures.
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