The Treasury Inspector General for Tax Administration (TIGTA)released a report highlighting security and testing risks when determining ACA compliance through the IRS’s ACA Compliance Validation System (ACV). Considering the issues both employers and health care consumers have experienced over the last few years in doing what for most is first time health care reporting, the TIGTA’s audit was conducted to determine if the IRS provided a complete and correct system with ACV.
The ACV was created with the intent to facilitate compliance for the Premium Tax Credit as well as the Shared Responsibility Payment. This is a growing problem especially for employers who are oftentimes unaware that probable penalties loom overhead due to either negligence from the advance notice of the Federal Healthcare Exchange or simply lack of information.
The TIGTA tested the IRS ACV system through various forms of testing, checking accuracy, cybersecurity, technology, and best practices. Of the aforementioned, cybersecurity appeared to be the most important evaluation. Given the IRS’s recent move to physical letters announcing an audit over traditional introductory phone calls, the federal government has now become more aware of possible scams that can seep into both the tax reporting and filing processes.
With the electronic filing of health care forms coming very soon, June 30th, employers have a 30-day window to then reconcile and Premium Tax Credits from their employees or Shared Responsibility Payments they must make before possible penalties arrive. The ACV was designed to determine this compliance, but how safe is it to use?
The good news is that the TIGTA found the ACV to be secure and following evaluation, the results reflected the IRS’s use of best practices when both developing and using the software. However, there were some slight security inaccuracies, which have since been corrected by the Cybersecurity organization, with an update of the system to reflected the changes. Should you as an employer desire your own audit prior to working with IRS, click here for a secure audit to analyze your business’ ACA compliance.