IRS Needs to Improve Handling of Obamacare Data

Amid all the political fireworks surrounding the Affordable Care Act, the Internal Revenue Service has largely succeeded in correctly processing taxpayer eligibility information, but the agency should improve its information sharing and reporting guidance to reduce risk, a watchdog found.

Under some 50 provisions of the 2010 health insurance reform law, the tax agency is tasked with verifying taxpayer income and family size, determining the value of tax credits and prescription drug benefits for which Obamacare participants might qualify, and creating electronic data reports to internal stakeholders.

In a report released Tuesday, the Treasury Inspector General for Tax Administration noted that the IRS had met its filing season deadlines for processing new ACA-related forms but warned of inadequate oversight and clear written policies and procedures.

When the latest iteration of the IRS’s information sharing and reporting system for the Affordable Care Act was deployed for the 2015 filing season, “lapses occurred in risk and requirements management,” auditors found. “For example, in seven instances, between six and 391 days elapsed from the estimated closure date to the actual date the risks and issues were closed, and in six instances, it took between 29 and 79 days from the date the risks were identified to the date the risks were initially discussed by management in status meetings.”

TIGTA recommended that the IRS Chief Technology Officer update the ACA Risk Management Plan to more adequately identify, prioritize and monitor risks. Also needed are written procedures to track whether requirements are being met, the watchdog said.

The IRS agreed with the recommendations.