IRS Assessment Related to Advance Premium Repayment

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  • #12574
    Bryan Haarlander
    Participant

    Hoping another member has experience with repayment of Obama care premium when a taxpayer has too much income. TP/son had been covered by father’s marketplace plan in pre-2017 tax years. Son became employed in 2017, got married, and his employer paid 100% of his health care. Father says that he notified the exchange to remove his son from his health care coverage. There is no written evidence of this.

    The Form 1095 for 2017 listed his son as being covered. The IRS assessed his son for the repayment of the advance payment because he earned too much. The father says that he requested that the exchange issue a corrected 1095 to remove his son. The exchange claims that it cannot do so because it is too late.

    The IRS assessed son for the advance premium repayment due the IRS and the 25% penalty for understatement of income. Since son was waiting for corrected 1095 from exchange and could not provide the IRS with any substantiation, the IRS eventually issued a SNOD.

    The son’s tax representative did not know that he could request a CDP hearing; and thus none was requested. The tax rep filed a Tax Court petition as the 90-days was about to expire.

    This is where we are coming into the picture. We have been requested to represent the son to have this assessment removed. We do not want to accept the engagement unless we feel confident that we can get the assessment removed. Since it appears that the father cannot get the market place to issue a corrected 1095 or write a letter saying that the son was erroneously included, it appears to be a “he said, she said” situation. Without substantiation from the market place that the son was erroneously included, we do not see how to get the assessment reversed.

    Any thoughts would be greatly appreciated.

    #12599
    samantha
    Blocked

    Question, you said the son was on the father’s plan for 2017. Did they split the PTC when they each filed their own returns? I assume the son was not a dependent on the father’s return? How were the returns filed?

    #12638
    Bryan Haarlander
    Participant

    Samantha, Thanks for responding. Father & son each filed MFJ in 2017. Son was not claimed as a dependent on father’s 2017 return.

    Son filed his 2017 Form 1040 in Feb of 2019. He was waiting for the Exchange to send paperwork showing that he had been deleted from father’s marketplace plan. Father filed his return on 04/17/18. Father’s return included Form 8962 showing family size of 3 (H, W & another child). Son was not included. The 1095A shows 4 persons covered, the peviously mentioned 3 family members plus the son in question.

    The family has no evidence of notifying marketplace to delete son from father’s plan. So the marketplace paid an insurance comaany a premium for the son. I would imagine if the father/son could show proof that the exchange was notified to delethe the son, the son would have recourse. If there is no proof of the notification to eliminate the son from the father’s plan, I would assume that since the premium was paid by the marketplace, the son must repay it.

    Am I missing something?

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