Tori Richards

So you’ve maneuvered the Obamacare website, plugged in your top-secret information and found out how much you are forced to pay to avoid a fine.

And for some of you, it turns out you qualify for a government subsidy — making the premium sound like a bargain. But signing on that line to accept the government’s cash also means you’re making a deal with the devil.

The government hasn’t told you this subsidy comes with a price — even more intrusion into your everyday life, said Joshua Archambault, a senior fellow with the Foundation for Government Accountability.

“What people don’t know is that their potential for being audited goes up dramatically,” Archambault said. “You have to release twice as much personal information than an applicant for private insurance and, depending on your income, you could actually end up owing upwards of $10,000 or more.”

Archambault has studied Obamacare extensively and his findings can be found on the website his foundation created, In a report co-written with a tax attorney, ObamaCare Tax Credits and the IRS, Archambault said President Obama has asked for $440 million and 2,000 more agents for the Internal Revenue Service, ostensibly to stem an increase in tax-credit fraud.

But many of these new agents presumably will be auditing people if past history is any indicator. A 2012 congressional report by the IRS’ taxpayer advocate revealed that 69% of the people who claimed tax credits for an adoption were audited. Of those taxpayers, 55% were found innocent of wrongdoing and were even owed money, the report said.

Receiving an Obamacare subsidy also means parting with personal information…

“The IRS’ misguided procedures and its failure to adequately adjust these processes when it learned its approach was seriously flawed, has caused significant economic harm to thousands of families,” taxpayer advocate Nina Olson wrote in her report. “Unless the IRS changes its approach to refundable credits … it will continue to cause problems for eligible taxpayers, including those eligible for … the Affordable Care Act.”

According to the President’s fiscal year 2014 budget, the IRS will “increase audit coverage to address tax compliance issues,” employing 797 agents with this task alone. An additional 573 agents will be employed to “increase collection coverage.”

If being audited isn’t bad enough, how about a surprise $8,061 tax bill at the end of the year? This very well could happen to a married couple with a combined yearly income of $60,000, Archambault laid out in his report.

Obamacare subsidies are tied to how much money a person makes over the federal poverty level and family size. It has a cap before some or all of the money must be repaid. People who work in industries with fluctuating incomes such as sales, food service or hospitality, could easily find themselves going over the allotted amount.

This has to be reported immediately to the Obamacare exchange and the IRS so the subsidy can be adjusted. Lower income individuals who don’t do this will have a maximum payback amount of either $600 or $1,500 at the end of the year.

For people who are in the middle-income range — making more than $45,960 a year for one person and up to at least $94,200 for a family of four — going over those set totals by just $10 would mean the taxpayer has to return every cent of the subsidy during the months income exceeded the allowance.

At first, Congress had limited the payback to the government at $3,500, but the most recent tinkering of the Affordable Care Act shows that it’s now unlimited.

In Archambault’s hypothetical example, one of the couple receives a small promotion and doesn’t remember to notify the IRS. Although the couple has paid $5,700 for insurance during the year, they are still required to pay back the $8,061 tax credit and are billed for interest and penalties. If the couple is unable to pay, the IRS can, as it often does, resort to wage garnishments, bank account seizures and liens, Archambault wrote.

Receiving an Obamacare subsidy also means parting with personal information that even your own family members might not possess.

A standard insurance application asks for basic facts: name, age, gender, address, whether you are a college student or have an employer offer of insurance, Social Security number and a list of family members.

But apply for an Obamacare tax credit and the government wants to know:

  • Pension and retirement account information
  • Social Security payments
  • Alimony payments
  • Investment information
  • Family structure and living arrangement
  • Foster care information

And, if you are self-employed:

  • Vehicle expenses
  • Property or business insurance
  • Interest collected
  • Rent or lease of business property
  • Contract labor
  • Business activity such as commissions, licenses and fees
  • Business travel and meals
  • Legal and professional services

“The potential for abuse is staggering,” Stephen Parente and Paul Howard wrote in a recent USA Today opinion piece. Parente is a professor with the University of Minnesota and Howard, a director with the Manhattan Institute.

Some of this abuse may have started already as thousands of Social Security numbers and other data have been released inadvertently by the IRS during the past few years, according to media reports.

“Consumers should fully understand the relationship they are entering into with the IRS when they sign up for an Obamacare tax credit,” Archambault advised.

Tori Richards
for The Daily Reckoning

Ed. Note: There is currently a way for you to legally “opt-out” of Obamacare. Sign up for the Laissez Faire Today email edition to discover a step by step way to do just that.

This article originally appeared here on

Article posted on Laissez Faire Today

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Tori Richards

Tori Richards is an investigative reporter for who covers waste, fraud and abuse in government and non-profits.

  • SallyinChicago

    This is why we need single payer. Thank goodness I get Medicare because filing taxes and claiming ACA would be a nightmare experience.

  • stephenjacobs

    In a nation like the U.S. where the mean annual personal income is $ 40,000 or less, I don’t think the people have anything to worry about with Obamacare, thank you. And consider the times now when they can get 12cents per year in interest income from their local bank or savings institution.

    Why do you think we call Republicans, “RePUKES” ? Since 1937, they have been opposing complete medicare for everyone of all ages and healths in America, and Obamacare is a giant step toward that goal.

    After winning this battle for Obamacare and therefore an expanded medicare to cover everyone of all ages and healths, I think the Republicans will be mortally wounded in America, and they will have to re-invent themselves or perish.

    Stephen Jacobs, Watsonville, California

  • Booger Jones

    Fear not, Sally and Stephen. We’re heading straight for single payer as soon as Obamacare fails, the insurance companies get fat bailouts, and blame can be placed squarely at the feet of “free markets”. Then everyone’s healthcare will be exactly the same, equal and fair. Except, of course, for the .01%, but I digress. Then we’ll slowly and painfully build up a huge all-encompassing pyramid scheme of taxes, fees, and payouts for health care and its associated monstrous bureaucratic and administrative costs until one glorious day when it all comes to a grinding halt as the money either runs dry, or simply loses all it’s value. I’m sure there are teeming hoards of young people just chomping at the bit to become doctors and nurses just so they can deliver their services at the behest and direction of our benevolent, loving, omnipotent government masters. What could possibly go wrong?

  • stephenjacobs

    Notice on American television now, the millions of dollars that those opposed to Obamacare are spending to try to B.S. the public here into contacting their Congress to kill even this modest healthcare reform. And this fight has been going on since about 1937 with the Republicans. This is how wealthy and powerful and conservative they are in America.

    No president since Franklin Delano Roosevelt has ever stood-up to the Republicans in the United States and done anything for the people. President Obama is the first one, and look at this fight now for a more complete Medicare here to cover everyone of all ages and health conditions. This broadening-out of Medicare for the elderly will now be the single payer Medicare for everyone that Canada has and that every country in the world has……… And this is why the Republican Party is fighting this Obamacare reform tooth-and-nail. Everyone in America will have Medicare from the government from birth until death as a basic human right and as a right of residence in America.

    We are going to win this fight against the Repukes, and thank you, President Obama.

  • englishvinal

    Stephen…. what are YOU a “troll” for the Obama administration?… If you are “not getting one cent for your goofy remarks” then you are simply … uninformed, misinformed and disinformed.
    … GO READ THE ‘Affordable Care Act”…. and read ALL of it…. every bloody word.
    And THEN sincerely tell us all that we should subject ourselves to all that is IN that bill.
    (And leave the “republican versus democrat” crapola OUT of the discussion. All politicians are totally corrupt… makes no difference what cute little pin they wear on their lapel….
    The republicans held the clout … then the democrats held the sway…… then back to the republicans …. and it has swung back and forth for the last 100 years, since BOTH the republicans and democrats voted, on Christmas eve in 1913 – to let the privately owned NON-federal ‘federal reserve’ banking organization control the currency of what then was “America”…… THE BOTH sold the people of this country OUT…..
    And they BOTH are still doing it while they live like kings and queens, and the taxpayers who are footing the bills struggle to make ends meet.

    Sing me no tunes about the slimy, sell-out, corrupt, politicians in Washington D.C..

  • englishvinal

    Stephen,….. After reading this last diatribe of yours, I have come to the conclusion that YOU are simply a “puke”…. regurgitating whatever propaganda you have read or heard on FAUX News or one of the other TeeVee Media Ho’s such as MSNBC…..
    You have never read the BILL………………….. you have no clue what you are trying to talk about…..
    Don’t you “get it” yet?… NOBODY gives a sweet flying bird WHAT the republicans or the democrats do ….. people are now concerned with the condition of their own futures, health, children, finances, a roof over their heads…. and they have realized that ALL politicians are the ENEMY.
    Go play with yourself, and be sure to watch your “friends” on the TeeVee…. they can tell you how to do it….. they know~!

  • stephenjacobs

    May I urge every reader to bring-up on their computer Obama Care Facts: Facts on the Affordable Care Act.

    The Obama Care Act will operate under the Affordable Care Act, and so this is why the Republicans are fighting tooth-and-nail to defeat the Obama Care Act now before it goes any further in the Congress. Under the Obama Care Act, the private insurance companies will no longer be able to use pre-existing conditions as a way to avoid covering a patient or paying a patient’s claim….. In fact, the phrase, pre-existing condition will be outlawed. The term PRE-EXISTING CONDITION will be ILLEGAL TO USE TO ESCAPE PAYING A CLAIM. The term will be meaningless in the courts. A PERSON CAN NO LONGER BE DENIED INSURANCE FOR A PRE-EXISTING CONDITION, AND A PERSON CAN GO TO THE GOVERNMENT TO DEMAND COVERAGE FOR ANY CONDITION.

    And now you know why the Republican Party ( the RePUKES ) in the United States is spending billions of dollars trying to defeat The Obama Care Act.

    Stephen N. Jacobs
    Watsonville, California

  • Carlos Rodriquez

    Chris… Thanks for that link! It’s good to be informed. I will not be forced to pay for something I do not use. Insurance is a corrupted system that steal money from healthy people (Al Capone used to sell Insurance). On the matter of the IRS… I have visited their office and was thrown out simply for asking them to “show me the Law” and I would comply. There is no Law that requires We the People… to file a 1040 tax return and they know it. I will not play their game – I have not filed a 1040 tax form in 23 years… and they know this. They constantly harass me by send their letters asking me to file (or else). I send their letters back, asking them for proof – “show me the Law, and I will comply.” For years they have failed to produce that piece of evidence to uphold their corrupt illusion.

  • stephenjacobs

    Dear Dr. R and the thousands like him in America:

    From now on and with the passage of the Obamacare Act, Uncle Sam will be standing in back and watching those practicing medicine in the U.S. EVERYONE WILL HAVE TO BE HELPED. NO-ONE WILL BE DUMPED. CLAIMS FOR HELP CAN NO LONGER BE FILTERED FOR PROFITS IN THE U.S; THE WAY THEY ARE NOW. All patients will have to be served, regardless of whenever/wherever those patients or claimants developed their conditions for need.

    The medical profession is going to serve the health needs of the public in America and no longer the profits of its business community.

    How Dr R or those like him file ( or choose not to file ) their income tax is irrelevant to this discussion.

    Stephen N. Jacobs
    Watsonville, California

  • stephenjacobs

    “So that Mr. X ( Ms. X ) came back into our insurance office and demanded continued coverage for their cancer, a cancer that they had had for well onto ten years now but our company board decided not to insure any longer… Being the pest that old X was and now well onto his/her 50’s, the only way to get rid of this idiot was to up his/her rates. So we told him, alright, that we would continue the insurance but at risk rate. So we offered to continue the policy at $1,000 per month additional rate to carry the risk…. And after hearing our offer, Mr./Ms. X turned-around and walked out of our insurance office. And that was that.”

    The next day, into our gigantic insurance office of the huge ABC Insurance Corporation came Uncle Sam (an official) from the federal government and told us that we had violated the Obama Care Act which was based upon the Affordable Care Act in America…. And in back of this guy, was our infamous insurance customer that we had insured now for well onto ten years. This was the problem case that we wanted to filter-out now because of the health risk, and so to avoid carrying the risk, we up-ed his/her rates now to dump the case. Our insurance board felt this jerk would exit at $ 1000 per month additional rate, so that was what we demanded.

    And for the first time after the maneuver…… Uncle Sam walks in the door.

    Stephen Jacobs
    Watsonville, California

  • stephenjacobs

    God, I think it is time to start replying to the Americans who are in love with their “free market forces” ! Would you please be so open-minded as to look at the damage your “free market forces” have done to America’s healthcare system with now how many tens of millions of people just cast away by that system as either too poor, or too sick or too costly, or some combination of all four?

    If the Yanks get the gold medal for arguing in favour of “free market forces”, they get a silver medal in arguing in favour of religion. But who takes the gold medal for that?

    With 100,000 now dead in Syria in a three-year dispute to change the religious government, the current government in Syria should definitely take the gold medal for that.

  • GoldHawk


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