U.S. Sen. Orrin Hatch (R-UT) asked Treasury Inspector General for Tax Administration (TIGTA) J. Russell George to investigate the questionable use of 2014 Advanced Premium Tax Credit (APTC) recipients on Monday.
It was revealed last week that as many as 710,000 recipients, who likely received more than $2.4 billion in advanced credit payments, failed to submit tax returns or request extensions to file after the deadline. The actual filing of tax returns is a required step in the process in order to preserve the integrity of the APTC program.
Hatch submitted a letter to George, in which he discussed his continued concerns regarding the integrity of APTC payments and called for an examination of a large sampling of individuals who received government subsidies while failing to submit a tax return.
“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 said. “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.”
Testimony from the non-partisan Government Accountability Office (GAO) at a recent Senate Finance Committee hearing indicated that, during an undercover investigation, the federal exchange approved the telephone and online applications for 11 out of 12 fictitious applicants. The federal government made payments of $2,500 per month, up to $30,000 per year, in credits for insurance policies for these fictitious individuals.