Nearly 50% of Subsidized Obamacare Enrollees Owed Taxes
Policy + Politics

Nearly 50% of Subsidized Obamacare Enrollees Owed Taxes

REUTERS/Jessica Rinaldi

The Internal Revenue Service—tasked with playing a key role in implementing Obamacare—isn’t doing a sufficient job helping confused taxpayers navigate the new law regarding their taxes. 

That’s according to a new report from the Treasury Inspector General for Tax Administration released Friday, which criticizes the IRS for not providing sufficient assistance to Obamacare enrollees who received subsidies for their health care this year.

Related: Underfunded IRS Begins Crucial Obamacare Test 

The auditor said that though the IRS created an online tool to help calculate how much a person should receive in health care subsidies depending on his or her income, the tool could only be used by IRS employees this filing season. The auditors said it should be made for public use, and faulted the agency for not making the public version in time. 

For its part, the IRS said it decided not to make the tool accessible for the public this year, because about 80 percent of filers use electronic filing anyway, and would have access to a similar tool. 

However, the IG wasn’t satisfied with that response and said the IRS still “has an obligation to provide the same level of assistance to all taxpayers.” 

Of course, calculating subsidies is an extremely complicated process—especially since the amount is determined by income, and that can shift throughout the year for many people who may have changed jobs or worked seasonal gigs. 

The IRS has been working with private tax preparers to help get the word out about subsidy information, so people are aware of what to expect in their tax returns. If they were given subsidies that were ultimately too high, they’ll end up owing the government money. The Kaiser Family Foundation reported that during the first year of the ACA, about half of all Obamacare enrollees who received subsidized coverage, ended up owing money on their taxes this year. 

Related: Why the Cash-Strapped IRS Isn’t Ready for Obamacare 

The IG recommended that the IRS should allow the public to use the subsidy calculating tool next year, since the agency—already short-staffed, wasn’t able to help everyone that needed advice. 

The report said that the IRS is reconsidering its decision not to make the tool open for public use. 

The IRS is playing a key role in Obamacare’s implementation. It’s now responsible for enforcing more than 40 new tax provisions under the Affordable Care Act. At the same time, the agency has seen its budget slashed significantly. 

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