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Treasury Inspector General Report on Accuracy of IRS Responses to ACA Exchange Requests for Income and Family Size Verification Information and Maximum Advance Premium Tax Credit Calculation (PDF)

"Our review of the IRS's response to [more than 100,000] requests received by the IRS between October 1 and October 4, 2013, showed that the IRS ... provided accurate responses for ... 99.97 percent [of the] requests.... In addition, TIGTA reviewed the IRS's response to [more than 120,000 Advance Premium Tax Credit (APTC)] requests received between October 1 and October 14, 2013. This review showed that the IRS, based on information furnished by the Exchange, accurately calculated the maximum monthly APTC for [each one of those] requests."

Treasury Inspector General Report: Improvements Are Needed to Strengthen Systems Development Controls for the Premium Tax Credit Project (PDF)

"[I]mprovements are needed to ensure the long-term success of the [Premium Tax Credit] Project by adherence to systems development controls for: [1] configuration and change management; [2] interagency test management process; [3] security; and [4] fraud detection and mitigation, in accordance with applicable Technology Officer. guidance.... [T]he IRS agreed with six of the recommendations and plans to implement corrective actions. However, the IRS disagreed with one of our recommendations to ensure that the Cybersecurity organization resolves or develops an action plan for the failed security tests. TIGTA maintains that this recommendation should be addressed to verify that corrective measures for failed controls have been implemented." [Sept. 27, 2013, published online Dec. 3, 2013]

Treasury Inspector General Report: Additional Measures Needed to Provide Greater Assurance That Tax Information Provided to Health Exchanges Is Protected (PDF)

"This audit was initiated to determine whether IRS Office of Safeguards has implemented sufficient policies and procedures to ensure that ACA Exchanges are adequately protecting [Federal Tax Information (FTI)] received from the IRS.... The current documentation on which the Office of Safeguards bases its approval decision for release of FTI does not provide sufficient evidence that required controls have been implemented. TIGTA also found deficiencies in procedures related to obtaining signed system security authorizations and ensuring that on-site reviews of agencies that have deployed new systems occur in a timely manner." [Report is dated Sept. 16, 2014; released Oct. 23, 2014.]

Treasury Inspector General Report: Improvements Are Needed to Strengthen Security and Testing Controls for the ACA Information Returns Project (PDF)

44 pages. "The ACA Information Returns (AIR) Release 1 Project is an information technology project managed under the IRS's ACA Program.... The overall objective of this review was to determine if the IRS is adequately mitigating systems development risks ... TIGTA evaluated the IRS's key management controls and processes for risk management, requirements and change management, testing, security, and fraud detection ... [I]mprovements are needed to ensure the long-term success of the AIR system by adherence to systems development controls for security and testing activities in accordance with applicable guidance.... These security control weaknesses could impact the AIR system's ability to reliably process the electronic form reports and to accurately determine the applicable fees." [Dated Sept. 29, 2014; published online Dec. 1, 2014]

Treasury Inspector General Report: Improvements Are Needed by IRS to Ensure Accuracy of Allocation of the Health Insurance Provider Fee (PDF)

"The IRS used third-party data to the extent that the data were available to identify the covered entities required to file Form 8963, Report of Health Insurance Provider Information. However, third-party data were not available for all covered entities that are required to file.... 665 (53.9 percent) of the 1,233 providers that were listed on Forms 8963 were not included in premium information from third-party sources.... [R]egulations do not provide a process for the IRS to correct the health insurance provider fee for all covered entities once the final fee letters are distributed.... TIGTA recommended that the Commissioner, Large Business and International Division, work with the Department of the Treasury to amend the regulations to provide for a reconciliation process to ensure that the fee is accurately allocated among covered entities. The IRS disagreed with this recommendation[.]"

Treasury Inspector General Report: IRS Should Notify and Educate Taxpayers About Required Minimum Distributions from IRAs

"TIGTA recommended ... [1] directly communicating with taxpayers required to take a distribution and informing them about the distribution rules, using easily understood language; and [2] if the notice program is expanded, modifying the methodology for the required minimum distribution notices to identify additional noncompliant individuals.... IRS officials partially agreed ... However, due to budget limitations, the IRS is not expanding its use of notices. In addition, the IRS agreed that direct communication with taxpayers reaching the age of 70-1/2 would be helpful, but it is not implementing this program due to budget constraints. The IRS did not agree to inform estates of distribution rules associated with IRA inheritances." [Dated May 29, 2015; released July 15, 2015.]

Inspector General Assessment of IRS Implementation Planning Efforts for the Excise Tax on Excess Compensation Paid by Tax-Exempt Organizations (PDF)

23 pages. "TE/GE Division management has not completed a strategy to address noncompliance with the new tax. Although TE/GE Division management acknowledged the need for a compliance strategy and took preliminary steps in that process, as of December 31, 2018, they had not established a timeline for further development and implementation of compliance activities. Affected organizations will begin reporting the excise tax on returns filed as early as May 2019. A fully developed compliance strategy is needed to monitor and track potential noncompliance with the new excise tax."

Text of Inspector General Report: Processes Have Been Implemented to Administer the Patient-Centered Outcomes Research Fee, But Controls Need Improvement to Ensure Filing Compliance (PDF)

"TIGTA found that 72,035 health insurance policy issuers/self-insured plan sponsors filed a Form 720, Quarterly Federal Excise Tax Return, with PCOR fees totaling $114 million for Tax Year 2012. Of these filers, 30,996 (43 percent) paid a PCOR fee of less than $4.25, which is the IRS's cost to process these returns.... TIGTA believes establishing a systemic error report that generates when the PCOR fee and/or tax payments do not match for Forms 720 with a PCOR fee will have minimal impact on IRS resources and allow the IRS to improve its monitoring of PCOR fee reporting and payment compliance."

ACA Reporting Compliance: Inspector General's Report May Foreshadow a More Intolerant IRS

"The Treasury Inspector General for Tax Administration (TIGTA) recently reported that, due to the IRS's leniency related to ACA employer mandate compliance and reporting, penalty collections under the ACA for violations of the mandate have been a fraction of what was expected at the time of the ACA passage.... Unfortunately for employers, rather than ascribing that deficit to poor prognostication skills on the part of the CBO, TIGTA ascribed that disparity to deficiencies -- too soft gloved an approach -- in the IRS assessment and collection process."

TIGTA Report: IRS Verification of ACA Premium Tax Credit Claims During the 2015 Filing Season (PDF)

"TIGTA's analysis of more than 2.6 million tax returns with a [premium tax credit (PTC)] claim that were filed between January 20, 2015, and May 28, 2015 ... found that the IRS accurately determined the allowable PTC on more than 2.4 million (93 percent) returns. TIGTA is continuing to work with the IRS to determine the cause for calculation differences in 150,385 of the remaining 182,884 tax returns. Computer programming errors resulted in an incorrect computation of the allowable PTC for 27,827 tax returns."