Signing Up For Obamacare Increases Your Chances Of Being Audited
January 23, 2014 by Ben Bullard
Need another reason to stay away from Obamacare? How about the fact that signing up for health insurance through Healthcare.gov or any of the State-run insurance websites is likely to compound your chances of being targeted for an audit by the Internal Revenue Service?
Thanks to the Affordable Care Act’s reliance on the IRS to enforce Americans’ compliance with its insurance mandate, the agency has hired 2,000 additional agents to pore over individual filing statements. And, unlike IRS audits of the past, they will have access to more non-financial information about their targets than ever before — thanks to Obamacare.
In particular, qualifying for a government subsidy to bolster your insurance premium payments places you under significantly greater scrutiny. In a report released last month titled “5 Ways The IRS Will Enter Your Life Under Obamacare,” the Foundation for Government Accountability examined how Obamacare will introduce unprecedented government intrusions into Americans’ private lives.
Here’s just a sampling:
Enrolling in an exchange plan and taking the Obamacare tax credit leaves you even more vulnerable to an audit by a newly-empowered IRS. Similar high-dollar tax credits have resulted in a greater likelihood of being targeted for an IRS audit. For example, almost 70 percent of the families that have participated in the adoption tax credit have been subject to an IRS audit. These audits routinely last years and can be costly.
The IRS’s own national taxpayer advocate, Nina Olson, highlighted serious problems in how the IRS ran its audit process for the adoption credits. She also warned that the risk and harm to citizens as a result of that program will pale in comparison to the potential impact on your finances during administration of the ObamaCare tax credits. Ms. Olson has publicly stated that she is concerned the IRS will not be able to “administer the new health care credits and penalty taxes in a fair and compassionate way.”
Continuing with the adoption credit comparison, Olson predicted Obamacare will necessarily expand the size and scope of the IRS, if there’s to be any hope the agency doesn’t repeat previous mistakes in enforcing the adoption code.
“[T]he IRS’ implementation of the expanded adoption credit does not bode well for its implementation of the premium tax credit….If the IRS does not take the time to learn from its adoption credit experience and be thoughtful about how it administers future refundable credits, it may face problems with the [Obamacare] Premium Tax Credit — including high examination rates — that will overwhelm IRS resources and severely burden taxpayers,” she wrote.
If an actual IRS employee is that concerned about the agency’s own ability to keep pace with Obamacare — to say nothing whatsoever of enrollees’ actual concerns about privacy and security — it’s no wonder the Foundation for Government Accountability advises potential enrollees to think twice.
“Individuals must be fully aware of the relationship they are entering into with the IRS before they enroll in an exchange plan,” the report concludes. “Time will tell if the IRS’s troubling history of implementing other tax credits will resurface under the massive health insurance tax credit program.”
Editor’s note: If you have bought or tried to buy health insurance through the Obamacare exchange, we want to hear from you. Please tell us about your experience. Was the site easy to access and easy to navigate? Were the prices you found what you expected or too high, or were they lower than you expected? Were the coverage options too inclusive, just right, not inclusive enough? Are you concerned about the security of the private information you submitted? Email your experience to firstname.lastname@example.org. We’d love to hear from you your thoughts on Obamacare.