In Uncategorized on 04/16/2021 at 09:52

Mirabile dictù, CSTJ Lewis (“Wotta Name!”) Carluzzo has an opinion for us on a Friday, before 9:00 a.m., EDT, a day and hour sacrosanct to the erstwhile hardlaboring intake clerks and formerly flailing datestampers at the locked down Glasshouse, whereon no opinion or decision would swim into the public ken at any time. I take back about a tenth of the obloquy I heaped upon the Genius Baristas; for this relief, much thanks.

True, it’s a small-claimer, off-the-bencher, but it beats scouring the usual couple hundred orders (hi, Judge Holmes), stupefying in their unending formulaity, hoping for some poor blogfodder. Truly, the blogger’s lot is not a happy one on Fridays.

But the unhappy tale of Kevin Wesley Gates & Kathleen Karen Gates, Docket No. 1475-20S, filed 4/16/21, as adumbrated by CSTJ Lew, falleth like the gentle rain of Heaven upon the parchèd earth, as the Swan of Avon put it.

Kev & Kath are just another couple enmeshed in the toils of Section 36B, the much-contemned Affordable Care Act of 2010. I have eschewed, again and again, a political rant. I have chosen to ban from this my blog even a reasoned policy discussion; in these times, rationality becomes fuel for further polarization.

Kev & Kath took an IRA drawdown to buy a house in CA. So they went to the ACA marketplace in CA to get healthcare cover.

“A representative of Covered California determined that petitioners were entitled to receive a monthly advance premium tax credit (APTC). On that advice, petitioners elected to receive an APTC of $1,573 to cover part of the cost of the monthly premium; this amount was paid on behalf of petitioners directly to their insurer. Petitioners paid the remaining $56.52 monthly premium.” Transcript, at p. 4.

They filed timely and included Form 8952 with their 1040 MFJ. The drawdown doubled their MAGI above the 400% poverty line. IRS whanged them for the full $14K APC they got.

“At trial it became clear that petitioners do not dispute respondent’s determination on technical grounds. Instead, it appears that Covered California incorrectly informed petitioners that they were eligible for the APTC for 2018. According to petitioners, they would not have purchased insurance through Covered California had they known that they would be ineligible for the premium assistance credit and would have had to repay the entire amount of the APTC as tax owed. See sec. 26B(f)(2)[sic; should be 36B(f)(2)].” Transcript, at p. 8.

Of course, CSTJ Lew can’t help. And strictures like “never take tax advice from someone whose qualifications are unknown to you, and who is trying to sell you something” don’t help, when you learn this at trial. I’ll bet the salesperson at CC never asked about the IRA drawdown, and just asked what their income was.

Now I’m not piling onto insurance salespeople. I’ve been on our State Bar Ass’n’s insurance sponsored committee these twenty (count ’em, twenty) years. I’ve worked harmoniously with insurers and their salespeople (except for suing a couple in the line of duty) for longer than that. But if you mean to employ any as tax adviser, ask for their qualifications. And tell ’em Kev & Kath sent you.


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