Inspector General says IRS has no system in place to prevent fraudulent ObamaCare tax credits-Free Beacon, Politico

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12/4/13, "IRS Has No Strategy for Fraudulent Obamacare Tax Credits," Washington Free Beacon

"The Internal Revenue Service (IRS) has no system in place to prevent fraud when individuals apply for tax credits under Obamacare, according to the Treasury Inspector General for Tax Administration (TIGTA).

The IG said in an audit released Tuesday that the IRS has no plan to manage, monitor, or mitigate fraud risk when processing premium tax credits available under the Affordable Care Act (ACA).

“The ACA Program has not yet completed a fraud mitigation strategy,” the audit found. “It is important for the IRS to thoroughly consider fraud threats and risks that could impact new ACA systems.”

Politico reports:

The Treasury inspector general for tax administration said in a report that IRS software has a system to verify tax credit calculations before it issues them to health insurers, but it said the agency may not yet have a system in place to stop tax cheats seeking to underestimate their incomes and fraudulently cash in on health subsidies. …
Lower-income taxpayers who purchase insurance on the exchanges can qualify for tax breaks that help them pay for insurance premiums — refundable tax credits that can be claimed at the end of each coverage year on a taxpayer’s return.
Alternatively, Americans can estimate their incomes for the upcoming year and have an estimated tax credit paid in advance directly to their health insurance providers. Those are supposed to be reconciled the following year, depending on whether the person makes more or less than what he or she estimated.

Refundable tax credits are especially vulnerable to fraud. Recently it was revealed that the IRS has wasted $132 billion in fraudulent Earned Income Tax Credits since 2003." via Lucianne


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