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Wednesday, February 25, 2015

IRS Won’t Collect Additional Taxes From Filers Who Used Incorrect Forms

I heard this explained. By doing this they are Changing the Law again to cover their Asses! Another Illegal move because a law cannot be changed without Congress!


WASHINGTON—The Internal Revenue Service won’t collect any additional taxes from about 50,000 people who already have filed returns using an incorrect government form on their coverage under the federal health insurance exchange.
About 800,000 people who obtained insurance on the federal exchange received incorrect tax statements, known as 1095-A forms, regarding their 2014 coverage. Some of the 50,000 who filed using those forms may have owed more had they received the correct statements. The IRS won’t collect those additional taxes, a senior Treasury Department official said.
The relief only applies to those who already filed their returns using the erroneous forms. Corrected documents should be sent to consumers by early March.
Some consumers who got the incorrect statements and already had filed their taxes may be owed a larger refund. In those cases, they can file an amended return and get money owed to them, according to the senior official.
The statements sent by the federal exchange, HealthCare.gov, are used to determine whether consumers received the correct amount of tax credits. The credits are pegged to the cost of premiums in a consumer’s location, as well as to the taxpayer’s income for the past year. Consumers who received too large a credit must reimburse the government or get a smaller refund. Those who received too little can claim additional money when they file their taxes.
The forms contained an incorrect value for the local premium, which affects other calculations, the officials said.
Republicans had been pressing the Obama administration for an answer on what procedures would be put in place for taxpayers who already had filed returns using the incorrect forms. The Treasury’s response frustrated some of them.
“This is yet another example of the administration covering their tracks to avoid the political fallout of mistakes made in executing their own law. Unilateral action such as this deserves further scrutiny by Congress,” said Senate Finance Committee Chairman Orrin Hatch (R., Utah).

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Jackson Hewitt CTO Mark Steber joined MoneyBeat this month with tips for filing in 2015 and everything you need to know about the Earned Income Tax Credit. Photo: Getty.
“While I understand the administration is embarrassed by its own incompetence, they can’t just shovel taxpayer money out the door to prop up the president’s failed health-care law,” said Sen. John Barrasso (R., Wyo.)., a prominent critic of the health law.
The Treasury official said the agency also is considering similar relief for consumers in state-run exchanges who may have filed their returns using incorrect statements.
California, which has a state-run exchange, sent out about 100,000 inaccurate forms to consumers who obtained insurance through the exchange in 2014. The correct forms are being produced this week, and consumers should have them by the end of the month, said James Scullary, a spokesman for the state exchange.
Consumers are finding out in some cases when they file taxes that they owe money because the subsidies they received were too generous. The subsidy amounts may be wrong because consumers underestimated their 2014 income.
Almost six weeks into tax filing season, 52% of people who enrolled in insurance through state or federal exchanges are finding they must pay back a portion of their tax credits, according to a report Tuesday by tax-preparation company H&R Block Inc. based on its clients. The average amount paid back is $530, decreasing the tax refund on average by 17%.
On the flip side, about a third of enrollees overestimated their 2014 income and received an additional tax credit of nearly $365 on average, according to the H&R Block report. As many as 6.8 million Americans got subsidies.
The incorrect forms from the federal government affect as many as 20% of the statements sent to consumers who received subsidies in 2014 on the federal exchange. These typically are lower-income people who depend on prompt refunds, according to tax-preparation firms.
“You’re asking them to wait to even do tax forms, and more than half are also going to owe,” said Gene King, an H&R Block spokesman. “They’re getting less of a refund, and it’s coming later in the year than ever before.”
Federal officials are encouraging others who got erroneous forms to wait until they receive corrected statements, expected by next week. Consumers also can get correct information by calling the federal exchange or using an online tool at HealthCare.gov.
Tax time also is when people who didn’t have health insurance will pay a penalty for going without coverage. Uninsured clients are paying $172 on average, according to H&R Block. The penalty in 2014 for not having coverage starts at $95, or 1% of household income, whichever is greater.
“It’s quite a sticky wicket for folks on top of an already difficult season,” said Mark Steber, chief tax officer for Jackson Hewitt Tax Service. “But we’ve had more difficult tax seasons. It’s all relative. It could have been much worse. But it is a tremendous political hot potato.”

www.wsj.com/articles/many-tax-filers-must-pay-back-portion-of-credits-given-via-healthcare-gov-1424807911

http://www.americanthinker.com/blog/2015/02/irs_to_let_taxpayers_keep_cash_from_obamacare_tax_mistake.html

http://www.breitbart.com/big-government/2015/02/24/hr-block-half-of-obamacare-enrollees-owe-the-irs/


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