Attorney-at-Law

“IS THERE, FOR HONEST POVERTY” – PART DEUX

In Uncategorized on 09/11/2018 at 17:36

Unhappily, STJ Daniel A (“Yuda”) Guy has a negative answer for poor Jason J. Gartlan, 2018 T. C. Sum. Op. 42, filed 9/11/18.

There isn’t, for honest poverty. That is, there isn’t a Premium Tax Credit (Section 36B) for JJ, even though he’s below 100% of the Federal poverty limit. So the much-contemned Affordable Care Act doesn’t afford JJ anything but a $3K deficiency, even though it’s uncontroverted that JJ’s MAGI was minus $799.

But doesn’t the special rule help JJ, notwithstanding that he fails the 100% – 400% poverty line cut? Is there never an exception; this is tax, after all.

Of course there’s an exception. Reg. Section 1.36B-2(b)(6)(i) says if the exchange to which JJ applies for coverage determines that he could make the 100% cut (and stay below the 400% cut), he enrolls in an approved plan for one month and the premium gets paid for one month, the premiums are creditable.

Except.

“Section 1.36B-2(b)(6)(i)(B), Income Tax Regs., requires that, at the time that petitioner enrolled in a health insurance plan, the insurance exchange estimated that his household income would be at least 100%, but not more than 400%, of the FPL [Federal Poverty Level] for the taxable year.  In addition, section 1.36B-2(b)(6)(i)(C), Income Tax Regs., requires that advance premium assistance payments were authorized and paid on petitioner’s behalf during the year in issue.  There is no dispute that neither of these requirements was met in this case.  Consequently, petitioner does not qualify under the special rule for taxpayers with household income below 100% of the FPL.” 2018 T. C. Sum. Op. 42, at p. 7.

JJ says the ACA was designed to help the poverty-stricken like him, and the only problem was that the exchange, his home State (DE), and the insurance company weren’t on speaking terms, a situation over which JJ had no control.

“While we are not unsympathetic to petitioner’s situation, we are bound by the statute as written and the accompanying regulations when consistent therewith. The controlling facts are that petitioner’s MAGI was below eligible levels and he does not qualify for the exception set forth in section 1.36B-2(b)(6)(i), Income Tax Regs.  To the extent that petitioner believes that he has suffered an injustice due to a flaw in the controlling statutory provisions, his recourse may be to seek a legislative remedy.” 2018 T. C. Sum. Op. 42, at p. 8.

As (A) this is a non-political blog, and (B) this is a blog meant for family audiences, I cannot express my opinion as to the chance of a legislative remedy. So all I can say to the question posed by Scotland’s Greatest, is “No, there isn’t, for honest poverty.”

 

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