I must again thank Judge David Gustafson for giving me copy on a day when the rest of Tax Court has nothing but procedure to satisfy my readers. Even though it’s the much-contemned Affordable Care Act that’s before us, and an attempt to avoid the post -2017 $0 penalty, Richard Goodman & Amy Goodman, Docket No. 2528-21, filed 10/12/23 (a happy date in our family) try a novel approach.

Enrolling directly in a health insurance plan they claim is a Section § 36B(c)(2)(A)(i) qualified silver plan, Rich & Amt want the Section 36B Premium Tax Credit to the tune of $14K. As IRS wants summary J they don’t get it, but Judge Gustafson takes Rich & Amy at their word; nonmovants gets every favorable inference. IRS never claims the plan Rich & Amy chose is not so qualified, nor that they didn’t pay what they claimed, nor that they missed the 400% of poverty cutoff.

No, they bought directly from the insurer, not through the MD Exchange. And, as Bob Frost put it, “that has made all the difference.”

“As we have previously held, see Sek v. Commissioner, T.C. Memo. 2022-87, at *7, and as we have already discussed in this order, section 36B(c)(2)(A) plainly requires that the plan must also have been ‘enrolled in [by the taxpayer] through an Exchange’. Because the Goodmans did not enroll through an Exchange, the fact (if it is a fact) that their plan was a ‘qualified health plan’ does not alter the outcome.” Order, at p. 4.

For the Sek story, see my blogpost “The COBRA Bite,” 8/29/22.

You gotta buy through the Exchange.

Politics and policy playing no role on this my blog,  I will not comment upon the statute, nor the policy upon which it was based. I will most definitely not give my view, albeit it that such is the majority view in many countries, and, for all I know, in this one as well. Everything in its place.