Health Reform WK-EDGE IRS controls effective for collecting delinquent SRP and excess APTC, TIGTA reports
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Thursday, October 13, 2016

IRS controls effective for collecting delinquent SRP and excess APTC, TIGTA reports

By Wolters Kluwer Editorial Staff

The IRS effectively established controls and procedures for collecting delinquent individual shared responsibility payments (SRP) and excess Advance Premium Tax Credit (APTC) repayments; however, improvements were needed, according to a report by the Treasury Inspector General for Tax Administration (TIGTA). It was important for the IRS to properly implement procedures and establish controls to collect taxes related to the new provisions under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), as the law limits the Service’s use of traditional enforcement methods for collecting the SRP, resulting in higher risk of taxpayer delinquency, taxpayer burden and inconsistent treatment (TIGTA Report, No. 2016-33-071, September 19, 2016.

TIGTA found no instances in which the IRS took prohibited enforcement actions to collect delinquent SRPs. Additionally, TIGTA noted that the IRS followed collection procedures and did not identify any instances of improper actions related to the repayment of excess APTC. However, TIGTA found that the IRS’s SRP liabilities policy was inconsistent with another policy requiring taxpayers to be in tax compliance prior to entering into instalment agreements and that it increases the risk of taxpayers accumulating new unpaid SRPs while maintaining an installment agreement. Further, TIGTA identified SRP liabilities that were not included in taxpayers’ new, revised, or reinstated installment agreements or new offers in compromise, as required.

TIGTA recommended that the IRS: (1) implement a programming fix to include SRP modules that were closed as below tolerance when setting up a new installment agreement for other tax liabilities; and (2) correct the tax year 2015 SRP modules with misapplied payments and monitor the situation until the problem has been resolved. The IRS agreed with both the recommendations and stated that it would take corrective actions.

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