ACA compliance numbers: the results are in

Your Guide to State, Local, Federal, Estate + International Taxation

ACA, compliance, IRS, health care, taxThe Treasury Inspector General for Tax Administration (TIGTA) issued a report recently relative to the IRS’s compliance with a statutory ACA rule that requires them to send out notifications to certain taxpayers. For those that are not aware, the TIGTA audits, investigates, inspects and evaluates for the fair administration of the Federal tax system and reports directly to the Secretary of the Treasury. While the purpose of the report was to discuss the IRS’s compliance with an ACA rule that requires it to send notifications to certain taxpayers, the report also disclosed a few other interesting facts relative to ACA utilization and compliance.

The ACA requires the IRS to send notification to taxpayers who are not enrolled in a minimal essential care plan (MEC) if they are not qualified under an exemption or opted to pay a penalty. The report shows that the IRS fell short on their reporting requirements for a variety of reasons. Accordingly, if you are not individually in compliance with ACA rules and did not receive any correspondence from the IRS about it, you may not have necessarily slipped through the cracks on that as you may have hoped. You may very well still get a notification at some point.

The report also noted that 3.3 million “silent returns” have been filed where the tax returns did not report a full-year MEC, an exemption or make a shared responsibility payment (SRP). The IRS did NOT YET send notification letters to these taxpayers, noting that it will react to such filers through “outreach, education and health care messages in compliance letters issued to individuals.” The report also noted that the average insurance cost after financial assistance (to those that qualified) was more than double the $75 amount quoted in prior IRS notification letters.

Dale F. Jensen, CPA