Last month, the IRS finalized regulations that sought, among other things, to reduce the chances that a person would recklessly provide inaccurate financial information to a Health Exchange. According to the new regulation, a person who qualifies for a tax credit, will no longer qualify for the credit if they recklessly provided false information to an Exchange regarding their financial situation.
What Does It Mean to Recklessly Provide False Information?
The IRS clarified that a reckless disregard for the facts occurs when an individual makes little to no effort to determine whether they have provided accurate information to the Exchange. Additionally, the circumstances must demonstrate that the person substantially deviated from the conduct expected from a reasonable person who is providing information to a Health Exchange.
Because of the questions surrounding the concept of “recklessly” providing information, it is important to speak with an attorney if your tax credit is in jeopardy after being accused of providing false information to a health exchange. The Scammahorn Law Firm is well aware of these types of IRS legal issues and can assist individuals who are facing claims from the IRS that they recklessly misrepresented their financial status.
Prior to the regulation being finalized, some commenters sought to shield people who had used experts to assist them in enrolling for health coverage. According to the commenters, these people should not be ineligible for the tax credit because of the work that was done by their tax advisors. Considering this comment, the IRS decided that individuals would not be liable for inaccurate information that was provided by third parties. Additionally, the IRS concluded that the taxpayer would be responsible for misstatements that he made to an expert because the taxpayer had not reasonably relied upon the advice of the expert in providing that portion of the inaccurate information.
You May Have Defenses to These Types of IRS Legal Issues
Naturally, there are many situations where an individual has provided information to an exchange that ultimately proved to be incorrect. These individuals may not fall under the category of having “recklessly” provided false information. To determine whether the information was provided recklessly, it is important to speak with an experienced tax attorney.
Additionally, there are many individuals who have provided information to an exchange that was thought to be incorrect, even though it was ultimately found to be correct. These types of allegations are dangerous to the individual and can be difficult for an individual to defend. As a result, it is always in a person’s best interest to speak with an attorney before attempting to resolve these legal issues with the IRS.