On August 13th, 2013, the IRS issued final regulations that permitted the disclosure of tax return information to the Department of Health and Human Services, the Exchange and state agencies (such as Minnesota’s exchange, MNSure) to be used for verification of income. These disclosures are allowed under the Affordable Care Act (ACA). The regulation demands strict security and safety guidelines and permits information to be disclosed by the IRS only upon written request from designated persons.
INFORMATION DISCLOSED BY THE IRS
The following is a list of the information revealed to MNsure and tax agencies:
- Taxpayer’s identity information (social security, name, etc)
- Filing status (single, married filling joint/separate, etc)
- The number of individuals that you deduct
- Your modified adjusted gross income (MAGI)
- The taxable year to which the information relates to
- If the taxpayer received a premium tax credit and didn’t file a return
SAFEGUARD OF FEDERAL TAX INFORMATION
Also established were strict security and safety principles to safeguard tax information. These principles apply to all entities that will receive information, including HHS, the Exchanges and the state agencies administering certain state health subsidy programs, as well as to their contractors. These safeguards include:
- Appropriate computer security,
- Stringent record-keeping and proper handling of records to protect the privacy of tax records.
Before being granted access to sensitive information, employees should be informed of the security procedures that they are required to comply with. In order to ensure that sufficient security measures are maintained the Internal Revenue Service is empowered to conduct internal inspections of the recipient agency. The IRS Office of Safeguards is accountable for tracking state and federal agencies that are permitted to receive tax return data to ensure they comply with all requirements.
For more information the IRS has put out these Questions and Answers.