IRS and the Affordable Care Act

Proud of Track Record

By Children’s Home Society of Florida Foundation

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IRS Commissioner Douglas Shulman testified before the Senate Appropriations Subcommittee on Financial Services and General Government on June 8 2011. He stated, “Mr. Chairman, the IRS is also proud of its implementation track record over the past few years.”

IRS Successes

There are multiple areas the IRS views as significant successes:

1. Collecting Taxes on International Funds – The IRS created a “landmark deal” with the government of Switzerland and has recovered substantial amounts of income tax. Over 15,000 taxpayers participated in the Voluntary Disclosure Program (VDP). In addition, 4,000 other taxpayers have voluntarily disclosed bank accounts throughout the world. The bank accounts have produced substantial taxes and penalties for the IRS. In addition, the overseas funds will be subject to U.S. taxes in the future.

2. Preparer Tax Identification Numbers (PTIN) – The PTIN now is required for all tax return preparers. Over 700,000 preparers have registered. This enables the IRS to monitor preparers’ qualificatons and to identify preparers who are committing tax fraud.

3. Telephone Support – The IRS has a goal of 93% toll-free tax law accuracy. The toll-free customer satisfaction rating for the IRS the past year was 92%.

4. Website – http://www.irs.gov has been very popular with taxpayers. There were 305 million webpage visits to the site in the past year. This is up 14% over the prior year. The “Where’s My Refund?” electronic tracking tool also increased in popularity.

5. Smart Phone – The IRS unveiled its first application for smart phones called “IRS2Go.” This application allows taxpayers with smart phones to check the status of tax refunds and obtain additional information.

6. eFiling – Each year, over 100 million taxpayers use the eFile Program. The IRS has been able to close five of 10 sites that previously were processing paper returns because of the efficiency of the eFile System.

IRS Changes

The IRS is also preparing for major increased responsibility that will be required under the Affordable Care Act (ACA). Under the wide-ranging healthcare law, there will be major changes for most Americans. The majority of these changes will affect individuals in 2014:

1. Premium Assistance Tax Credit – Individuals with lower and moderate incomes may qualify for a healthcare tax credit.

2. Advanced Premium Payments – Individuals who qualify for the healthcare tax credit may receive advance monthly payments to their healthcare insurance provider.

3. Reconciling Tax Credits – For those individuals who receive advance healthcare payments to providers, their tax return will necessarily require a reconciliation of the tax credits with the advance payments. It appears that the first date for this return will be April 15, 2015. IRS forms will include a reconciliation for the 2014 tax credits.

4. Individual Coverage Requirement – For individuals in 2014, there will be a mandatory coverage requirement. Those without coverage will be required to make a payment to the IRS.

5. Employer Payments – For employers who are required to participate in the healthcare programs for employees, they will need to report that participation or make an employer payment to the IRS.

ACA

Editor’s Note: Your editor and this organization take no position with respect to IRS practices and the comments of IRS Commissioner Shulman. This information is offered as a service to our readers.

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