Notice 2004-47

FOR
FURTHER
INFORMATION
CONTACT: Concerning submissions,
Guy Traynor at (202) 622–7180. Concerning this notice, John Richards of the
Office of the Associate Chief Counsel (Tax
Exempt & Government Entities) at (202)
622–6040 (not toll-free calls).

Information Reporting for
Advance Payments of Health
Coverage Tax Credit
Notice 2004–47
PURPOSE
This notice provides that the HCTC
Transaction Center (Transaction Center),
as an administrator of the Health Coverage
Tax Credit (HCTC), will file and furnish
the information returns and statements required by § 6050T of the Internal Revenue
Code, unless the health insurance provider
notifies the Transaction Center that the
provider will file and furnish information
returns and statements.
BACKGROUND
Health Credit
Section 35 provides that under certain
conditions, individuals affected by foreign
trade competition or receiving benefits
from the Pension Benefit Guaranty Corporation may claim the HCTC for a portion
of their health insurance expenses. The
credit is 65 percent of the eligible individual’s expenses for qualified health
insurance coverage.
Advance Payment of the Health Credit
Section 7527 provides for advance payment of the credit, in the form of payments
from the Treasury Department to the individual’s health insurance provider. Such
payments reduce the premiums the individual would otherwise owe the provider
and, accordingly, reduce the amount of the
HCTC available to be claimed on the eligible individual’s income tax return.
Information Reporting of Advance
Payments
Section 6050T requires the providers to
file information returns with the Service

2004–29 I.R.B.

reporting advance payments the providers
receive from the Treasury Department,
and to furnish the insureds an information
statement showing the information filed
with the Service. The returns required of
providers under § 6050T must contain,
among other things, the name, address,
and taxpayer identification number of insureds who have been declared eligible
to benefit from the advance payments described in § 7527. The information returns
and statements required by § 6050T enable
the Service and taxpayers to ensure that
taxpayers do not claim excessive credits
on their income tax returns. Form 1099–H,
Health Coverage Tax Credit (HCTC) Advance Payments, has been developed for
providers to use in meeting this reporting
obligation.
ADMINISTRATION OF THE
PROGRAM
The Treasury Department is administering the HCTC program by using a
HCTC Customer Contact Center and a
HCTC Transaction Center to perform various administrative duties relating to the
program. The Transaction Center will,
among other things, collect the insured’s
portion of the premium and forward the total premium, which includes the advance
payment, to health insurance providers
through health plan administrators.
INFORMATION REPORTING
OBLIGATIONS OF HEALTH
INSURANCE PROVIDERS UNDER
THE HCTC PROGRAM
Under the program developed to administer the HCTC advance payment program, the Transaction Center will know
the amount of those advance payments,
and the identity of the individuals who
benefit from the payments. Accordingly,
the Transaction Center will have the information that the health insurance provider
would otherwise have to file with the Service (and furnish to the insureds) pursuant
to § 6050T. The Treasury Department and
the Service believe that it is in the interest
of sound tax administration to allow health
insurance providers to use the Transaction
Center to satisfy their information reporting obligations under § 6050T and
not require the providers to file information returns with the Service or furnish

48

information statements to the insureds.
A health insurance provider receiving
advance payments from the Transaction
Center will be deemed to have elected
to have the Transaction Center file these
information returns and furnish these
statements unless the provider notifies the
Transaction Center that the provider will
file Forms 1099–H with the Service and
furnish those forms to insured individuals. Therefore, unless the health insurance
provider notifies the Transaction Center
that the provider will file and furnish information returns and statements under
§ 6050T, the Transaction Center will take
those actions instead. The Transaction
Center may be contacted for this purpose
by calling 1–866–628–4282.
WAIVER OF PENALTIES
Section 6724(a) authorizes the Service
to waive any penalties for failures to comply with § 6050T if such failures resulted
from reasonable cause and not willful
neglect. The Service will not assert the
penalties imposed by §§ 6721 and 6722
for information returns and statements required to be filed and furnished regarding
advance payments made to health insurance providers against providers that elect
to allow the Transaction Center to file
and furnish Forms 1099–H. If a health
insurance provider does not elect to allow
the Transaction Center to file and furnish
Forms 1099–H, the normal rules for seeking a penalty waiver under §6724(a) will
apply. (See § 301.6724–1 of the Regulations on Procedure and Administration.)
CONTACT FOR INFORMATION
The principal author of this notice is
Nathan Rosen of the Office of the Associate Chief Counsel (Procedure & Administration), Administrative Provisions and
Judicial Practice Division. For further information regarding this notice, contact
Nathan Rosen at (202) 622–4910 (not a
toll-free call).

July 19, 2004