In Uncategorized on 09/25/2017 at 16:19

“Your kids can stay insured if they’re your dependents, even if they’re out of school.” A selling point for that beleaguered statute, the Affordable Care Act, has some unintended and unpleasant consequences for Benjamin J. Gibson, Sr. and Delores B. Gibson, 2017 T. C. Memo. 187, filed 9/25/17.

Senior and Delores are over the limit for Section 36B tax credits. The Section 36B rigmarole was the stuff of many CPE classes that I sedulously avoided. But they get nailed for excess credit, via Junior.

Junior did not live with Mom and Dad. Junior was on his own and working, but applied for Section 36B largesse. All this unbeknownst to Senior and Delores. Until.

Until IRS hit them with a SNOD for Junior’s advance payments of premium tax credits.

Senior and Delores say “we knew nothing of Junior’s delictions.”

Tough, says Judge Pugh.

“Advance payments of the premium assistance tax credit made on behalf of a taxpayer or members of the taxpayer’s household, including a dependent child, must be reported on the taxpayer’s Form 1040.  If the advance payments exceed the premium assistance tax credit to which the taxpayer is entitled ultimately, the excess increases the tax owed by the taxpayer and reduces any refund otherwise payable to the taxpayer.  Sec. 36B(f)(2); sec. 1.36B-4, Income Tax Regs.; sec. 1.36B-4T(a)(1)(ii)(A), Temporary Income Tax Regs., 79 Fed. Reg. 43628 (July 28, 2014) (“A taxpayer must reconcile all advance credit payments for coverage of any member of the taxpayer’s family.”); see McGuire v. Commissioner, 149 T.C. at __ (slip op. at 12).” 2017 T. C. Memo. 187, at p. 4-5.

For the McGuire story, see my blogpost “Refurbished, Reupholstered and Re-Engineered,” 8/28/17.

Senior and Delores claim that Junior never had insurance from ACA, only from his employer.

But IRS has the Form 1095-A with Junior’s last known address for the year at issue, and the insurance company who wrote the policy has all the pictures, descriptions and accounts, and hands them over to IRS. Junior puts in an affidavit, but never shows for the trial.

Junior’s employer insured him only for the year after the year at issue.

I understand Congress has this in hand to remedy. Cain’t hardly wait.

  1. WOW!!!!!

    *​Michele A. Peters, Esq.* E-mail: Law Office of Michele A. Peters LLC Tel: (212) 461.4240 Fax: (212) 461.4259 Oregon Tel: (541) 402.4473 ​Lic. OR, NY, NJ ​

    *Mailing Address:* P.O. Box 1922 Newport, OR 97365 website:


  2. How does the kid meet the requirements for QC or QR? A footnote in the verdict does say that respondent does not dispute the dependency claim. Confusing.


  3. w, I haven’t any idea how Junior got qualified as a dependent. Maybe Senior and Delores paid more than one-half of Junior’s support, and maybe Junior’s gross income for the year at issue was under the exemption amount. Maybe Junior only got his job at year’s end of the year at issue. Junior’s employer paid for his health insurance for the next year. But all this is speculation; Judge Pugh doesn’t say.


  4. […] Taishoff covered the decision in a post titled Junior.  Mr. Taishoff almost slips from his resolution to have a non-political blog with the […]


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