IG Says IRS Unprepared to Stop Possible Healthcare Law Tax Fraud

The Affordable Care Act has been the target of a lot of negative press. Aside from the general political rhetoric from opponents of the measure, there have been the very obvious issues with the rollout of the online registration process.

The latest red flag to be raised comes from the Treasury Inspector General for Tax Administration. He issued a report this week saying that the Internal Revenue Service is not as prepared as it needs to be to prevent suspected tax fraud related to the law.

Specifically of concern are the subsidies, offered in the form of tax credits, that many lower-income Americans are slated to receive in order to help them pay for the policies they enroll in under the ACA. According to the TIGTA, the IRS is still in the process of developing and testing two fraud prevention systems. He says that until they’re ready for prime time, the threat of ACA refund fraud exists. It’s not clear when the systems will be up and running.

The IRS insists that it is addressing the concerns. The White House is expressing confidence that the agency will be able to assure the integrity of the ACA programs adequately. But Republicans on Capitol Hill have been quick to point to the report as another sign that the Affordable Care Act is fundamentally flawed.

Regardless of how things play out, some things can be counted upon. The IRS will attempt to do what it can to prevent tax fraud from happening, and prosecutors will go after those they suspect of trying to defraud the system. Those who find themselves targeted by such efforts should not try to deal with the issues without the help of experienced legal counsel.

Source:Reuters.com, “Tighter fraud filter needed for Obamacare tax credits: IRS watchdog,” Patrick Temple-West, Dec. 3, 2013

Tags: Blog, Tax Crimes