Washington. D.C. -- The Internal Revenue Service has issued a notice related to the Affordable Care Act that includes information on getting a hardship exemption from the individual mandate for health insurance coverage.

Notice 2014-76 provides a list of the hardship exemptions that taxpayers can claim on a federal income tax return without obtaining a hardship exemption certification from the health insurance marketplace.

Under the Affordable Care Act, for each month beginning after Dec. 31, 2013, Section 5000A of the Tax Code requires individuals to either have minimum essential health coverage for themselves and any nonexempt family member whom the taxpayer can claim as a dependent, qualify for an exemption, or include an individual shared responsibility payment with their federal income tax return.



Washington. D.C. -- The Internal Revenue Service needs to take action to resolve millions of dollars in so-called "frozen credit accounts" that are effectively in a state of limbo, preventing some taxpayers from receiving their tax refunds, according to a recent government report.

The report, from the Treasury Inspector General for Tax Administration, examines the accounts, which require special handling or await the occurrence of a pending future event. The IRS's computer system uses special coding to identity these types of accounts. These situations are commonly referred to as freeze conditions. Taxpayer accounts in "credit" status and also coded with at least one freeze condition are commonly referred to as frozen credit accounts.

If the freeze conditions are not adequately identified and resolved, TIGTA noted, IRS processing of taxpayer frozen credit accounts can be delayed and taxpayers can be adversely affected by delayed refunds or payments not applied to the proper tax modules.



Washington. D.C. -- Tax refund fraud associated with prisoner Social Security Numbers remains a growing problem for tax administration despite the Internal Revenue Service's efforts to curb it, according to a new government report.

The report, from the Treasury Inspector General for Tax Administration, marks the third in a series of audits TIGTA has conducted since 2010 that have documented alarming growth in prisoner tax refund fraud. The number of fraudulent tax returns filed using a prisoner's Social Security number that were identified by the IRS increased from approximately 37,000 tax returns in calendar year 2007 to more than 137,000 tax returns in calendar year 2012, TIGTA pointed out. The refunds claimed on these tax returns increased from $166 million to $1 billion.

Reports issued by TIGTA in December 2010 and December 2012 identified concerns with the IRS's efforts to identify and prevent prisoner tax fraud. The objective of the inspector general's latest audit was to evaluate the effectiveness of the corrective actions that the IRS has taken to address conditions identified in a prior TIGTA review of prisoner tax fraud. The report found that the actions have not yet proven to be effective.

"Since TIGTA first began documenting this fraudulent activity four years ago, refund fraud committed by prisoners has grown to become a billion-dollar problem," said TIGTA Inspector General J. Russell George in a statement. "While the IRS has agreed with four of our six recommendations, more needs to be done, as is explained in our report. It is incumbent upon the IRS to act aggressively to prevent tax fraud wherever it occurs, particularly behind bars."

In its new report, TIGTA found that the IRS has not yet shared fraudulent prisoner tax return information with federal or state prison officials. TIGTA recommended that the commissioner in charge of the IRS's Wage and Investment Division ensure that memoranda of understanding are established on a timely basis with the Federal Bureau of Prisons and all state corrections departments.

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