WASHINGTON (AP) - The IRS' overloaded phone system hung up on more than 8 million taxpayers this filing season as the agency cut millions of dollars from taxpayer services to help pay to enforce President Barack Obama's health law.
For those who weren't disconnected, only 40 percent actually got through to a person. And many of those people had to wait on hold for more than 30 minutes, IRS Commissioner John Koskinen said Wednesday.
The number of disconnected callers spiked just as taxpayers were being hit with new requirements under the health law. Last year, the phone system dropped 360,000 calls, Koskinen said.
For the first time, taxpayers had to report whether they had health insurance last year on their tax returns. Those who received government subsidies had to respond whether they received the correct amount. People without insurance faced fines, collected by the IRS, if they did not qualify for an exemption.
Is it better to follow the strict letter of the law or to adjust it where appropriate to produce a more equitable result? This is one of the oldest questions in legal thought, one that can be traced back at least to Aristotle -- and on Wednesday the U.S. Supreme Court weighed in, 5-4, on the side of equity, with Justice Anthony Kennedy providing the deciding vote.
Ordinarily, a decision like this one, involving the interpretation of the Federal Tort Claims Act would be of interest only to practitioners who are specialists in statutory interpretation. But this isn’t an ordinary spring. In June, the Supreme Court will hand down its most important statutory interpretation case in a generation, essentially deciding whether the Affordable Care Act will survive or fall. The interpretation question before the court in that high profile case, King v. Burwell, bears a striking structural resemblance to the obscure one the court decided Wednesday.
Health Affairs Blog
At some point between now and the beginning of July, 2015, the Supreme Court will decide King v. Burwell. If the Court sides with the plaintiffs and invalidates the Internal Revenue Service (IRS) rule permitting federally facilitated exchanges to grant premium tax credits, the effects will be dramatic. Premium tax credits and cost-sharing reduction payments in the federally facilitated exchanges would probably cease at the end of July.
At that point, approximately 8 million Federally Facilitated Marketplace (FFM) enrollees currently receiving subsidies would have to decide whether to continue to pay the premiums themselves. Without the subsidies, their premiums would increase 122 to 774 percent depending on the state, with a national average increase of 255 percent. Millions of individuals would likely be unable to afford these premium increases and would cease paying their premiums. Their coverage would probably end 30 days thereafter.
Sen. Ron Johnson (R-Wis.) unveiled legislation on Tuesday that would allow people to temporarily keep their ObamaCare plans if the Supreme Court guts the law's subsidies.
Johnson’s bill is the latest Republican effort to put forward contingency plans for the possibility that the high court could strike down subsidies that help 7.5 million people afford health insurance.
Many Republicans, including Johnson, who is up for reelection next year, worry that without a plan, they will face intense political pressure to simply restore coverage under ObamaCare to the millions of people who would lose insurance in the case King v. Burwell. A ruling is expected in June.
(Reuters) - If the U.S. Supreme Court blows up the tax subsidies at the heart of Obamacare in June, Republicans hope to deliver on their promise to offer an alternative healthcare plan.
But key parts of it may resemble the one President Barack Obama delivered five years ago in the Affordable Care Act, partly reflecting Republican concerns that they could pay a political price if insurance subsidies are yanked from millions of Americans later this year.
Two front-running Republican options at an early stage in Congress include a refundable tax credit that experts say is virtually the same thing as the Obamacare tax subsidy being challenged before the Supreme Court. Republicans deny that their ideas are tantamount to "Obamacare Lite" but acknowledge they will need bipartisan support for their plans to stand any chance of avoiding an Obama veto.
Competitive Enterprise Institute
WASHINGTON, April 16 – Today the Competitive Enterprise Institute (CEI) released a report by finance expert Scot Vorse that shows many states knew as early as 2011 that they might not receive tax credits if they opted out of establishing a state-based health insurance exchange. Whether nonparticipating states had adequate knowledge that they were putting their Obamacare subsidies at risk is a critical question in CEI’s Supreme Court case, King v. Burwell.
Vorse obtained emails related to a January 2012 letter sent by seven states to the U.S. Department of Health and Human Services (HHS).
April 15, 2015 Congress just passed a big bipartisan health care bill, overwhelmingly and on a tight timeline. Now, some Democrats might hope the Supreme Court didn't notice.
Republicans and Democrats defied just about everyone's expectations by passing a permanent "doc fix" after punting on the issue for more than a decade.
National Taxpayers Union Foundation
This year’s new analysis of tax complexity from National Taxpayers Union Foundation (NTUF) found some startling lead figures: a $234 billion cost to the economy due to 6.1 billion lost hours of productivity and $32 billion spent out-of-pocket to comply with America’s insanely complicated tax system.
As always, there is much more to the story.
Since 2010, tax complexity costs have remained sky-high, at well over $200 billion each year. From fiscal year 2005 to 2013, the Treasury's paperwork burden rose from 6.4 billion hours to 7 billion hours never making up less than 74 percent of the burden imposed by all government agencies combined.
While last year’s (covering 2013) totals actually trended downward compared to the previous year (2012), there was little reason to believe that was the beginning of a trend toward continued relief.
As millions of Americans scramble to file their tax returns, many are shocked by the full cost of ObamaCare’s individual mandate.
“Those who failed to obtain minimum essential health insurance coverage last year will have had to send the Internal Revenue Service (IRS) a check for $1,130, on average,” Doug Holtz-Eakin, former director of the Congressional Budget Office, testified today before a congressional hearing.
An estimated 6.3 million people will be required to pay a penalty this year because they didn’t buy qualifying health insurance in 2014, Holtz-Eakin testified.
A new report shows that as the United States' tax system grows more complicated because of Obamacare regulations, the economy is taking more of a hit.
According to data from the National Taxpayers Union Foundation (NTUF), complying with the federal income tax cost the economy about $234 billion in productivity last year.
The group came to that figure by adding the out-of-pocket cost of tax preparation assistance ($31.7 billion) and the estimated cost of $202.1 billion due to lost labor hours Americans spent dealing with their 2013 tax returns that were filed in 2014.
Special: IRS Loophole That Could Protect You From Economic Instability
The economic hit was lower than the previous year by almost $10 billion, and the NTUF concludes that "was an anomaly."
The increase to this year's figure, according to the NTUF, stems from the Affordable Care Act and the mountain of paperwork it has created at the IRS.
"Looking deeper at NTUF's research, there is one big reas