It’s a holiday week, so I’m re-publishing popular blog posts from the past.
This is a timely re-post: the Patient-Centered Outcomes Trust Fund Fee is due by July 31!
(*-The post below was written last year, when the fee was $1/person. The fee is now $2/person for 2014 filings.)
Originally published July 19, 2013
This is a real example. One of my clients has an HRA. Total lives covered under the HRA = 3, so the client is paying a $3 fee.
Here’s the total time spent on this ridiculous exercise in paper pushing:
- Initial phone call to the client to discuss the fee: 5 minutes
- E-mails and phone calls to the client to verify that the insurance company and not client owes the fee on the health insurance policy the client offers (the client owes the fee on the HRA, the insurance company owes on the health insurance): 7 minutes
- Reviewing the 21-page instructions to Form 720 to verify that we are supposed to call the Form 720 a “second quarter” filing even though the PCOT fee is based on a 12/31/12 year-end: 3 minutes
- Preparing Form 720: 6 minutes
- Reviewing Form 720, including another check of the instructions to verify that the non-applicable schedules on Pages 3-6 of the form need to be sent even if they don’t apply: 4 minutes
- Fixing a typo I made on the client’s address on the form: 1 minute
- Printing Form 720: 2 minutes
- E-mail to the client asking them to please review Form 720 and explaining to the client that they should not be intimidated by the sheer volume of lines and weird codes on Form 720, that I just need them to verify their name and EIN: 4 minutes
Total time: 32 minutes. Assuming a billing rate of $100/hour, that comes to $53 of time. Note that I still have to sign the form and put it in the mail to the client for them to sign and send on to the IRS. When you add that time in, plus the value of the client’s time spent on this, you’ve got at least $100 of time invested by the client and me in complying with this ridiculous fee.
Even if we factor out the initial phone calls and e-mails and the scouring of the instructions, and just focus on the preparation of the form itself, you’ve got a good $25+ of time.
All so the client can pay a $3 fee.
And some sole proprietorships with an HRA will be going through this exercise so they can pay a $1 fee.
It’s pointless bureaucracy at its finest.
Image courtesy of ningmilo / FreeDigitalPhotos.net
“This blog post, along with comments that may follow, should not be considered tax advice. Before you make final tax or financial decisions, please secure a professional tax advisor to give you advice about your unique situation. To secure Jason as your accountant, please click on the ‘Services’ link at the top of the page.”