Hundreds of thousands of Obamacare subsidy recipients have failed to file tax returns, and Sen. Orrin Hatch wants the administration to investigate who owes the feds money.
The Republican chair of the Senate Finance Committee has asked the IRS’s Treasury inspector general for tax administration to look into who’s receiving the taxpayer subsidies under Obamacare and whether they owe money back to the federal government. IRS commissioner John Koskinen revealed to Hatch just last week that 710,000 Obamacare customers who received Obamacare subsidies last year both failed to file tax returns — a step required of all those who receive Obamacare’s advanced premium tax credits to allay the cost of their coverage — nor did they request an extension for their tax returns.
All that money adds up. Hatch points out that because on average, Obamacare customers received $3,400 in subsidies, those 710,000 customers who did not update file their tax returns “likely received more than $2.4 billion in advanced credit payments alone.”
“A critical element in safeguarding the integrity of insurance subsidies is the reconciliation process that occurs when taxpayers file their tax returns and reconcile subsidies received versus the amount they were in fact due,” Hatch wrote to J. Russell George, the IG for tax administration. “While it is likely that not all of these are fraudulent, because of the Marketplace’s lax integrity controls there is reason to believe that a significant portion could be.”
That’s not the only concerning information to crop up about the subsidies, either — the Government Accountability Office revealed last week that in an undercover test of the federal Obamacare exchange, investigators were able to get 11 of 12 fake customers health insurance and subsidies complete with fake identities and fake documents with little trouble — complete with $30,000 in subsidies. (RELATED: Phony Obamacare Applicants Received Subsidies At HealthCare.gov — Again)
The GAO revealed in a hearing with the Senate Finance Committee that the Obamacare contractor charged with setting up the payments is simply not set up to investigate any fraudulent documentation. (RELATED: Federal Investigators Got Obamacare Subsidies With Fake Identities, Docs)
Hatch is looking for the IRS watchdog to audit a “large sampling” of the 2014 group of Obamacare customers, checking that customers are using their true identities and that they qualify for the amount of premium subsidy they’ve received.
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