Surprise: Poorest Obamacare Enrollees Face $530 IRS Tax Bill

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Posted by Ryan Ellis on Tuesday, February 24th, 2015, 10:56 AM PERMALINK


The majority (52 percent) of Obamacare enrollees receiving an advance premium tax credit to purchase Obamacare insurance is facing the prospect of paying back $530 of that tax credit to the IRS, according to a new study from H&R Block.  This clawback is reducing the refunds for these taxpayers by 17 percent this filing season.

Under Obamacare, taxpayers earning between 133 and 400 percent of the federal poverty level are eligible to receive a tax credit to help purchase insurance on Obamacare exchanges.  This tax credit is calculated using old tax data of the recipients.  The credit is advanced ahead of time to the taxpayer's insurance company.  The taxpayer must reconcile at tax time the advance credit received with the actual credit she is eligible for.

Families of four earning less than $97,000 are eligible for a credit.  So is a single mother with two children earning less than $80,000 and an unmarried/childless taxpayer earning less than about $12,000.  By definition, these are the lowest income recipients of Obamacare health insurance outside the Medicaid-eligible population.  Higher income taxpayers received no tax subsidy and aren't facing this tax season surprise.

According to the study, a majority of credit recipients--52 percent--have had to pay back the IRS an average of $530, reducing their refunds by an average of 17 percent.

It remains unclear how this information relates to the revelation last week that 800,000 healthcare.gov Obamacare customers (and a further 100,000 in California) received inaccurate 1095-A tax reporting forms.  Doing the reconciliation described here would not be possible for these nearly 1 million families.

Also in the H&R Block report is the news that the individual mandate penalty is averaging $172. This is likely to rise in future years as the penalty for most taxpayers will equal 2.5 percent of their adjusted gross income.  A family earning $100,000 would see a penalty of $2500 for failing to obtain qualified Obamacare health insurance.

Top Comments

StevenNewsom

Suckers.

There is a downside to voting based on likes and wants, instead of an informed opinion, that downside is that you are easily manipulated. Now own what you wanted, but were too lazy or too stupid to learn about.

J. Moore

So what?! The majority of the folks paying the 'penalty' will be paying it from the EIC or 'refund' amount from taxes they never paid anyway. It's STILL redistribution from the paying class to the moocher class back to the gov.

Jay Loveless

Money is real when it is backed by a substance having intrinsic value, as ours used to be; first with gold, then after 1933 with silver. I'm old enough, at 63 to remember being paid in Silver Certificates. It was only when we dropped that backing and went to "Federal Reserve Notes" that our money became trash.


Alabama Gov. Bentley Breaks “No New Taxes” Promise, Pushes for Higher Taxes

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Posted by Will Upton on Monday, February 23rd, 2015, 5:05 PM PERMALINK


Governor Robert Bentley has made it clear that he intends to break his WRITTEN pledge to voters to oppose and veto “any and all efforts to increase taxes.”  Shortly after his re-election this past November, Gov. Bentley began making a push to increase taxes. Americans for Tax Reform pushed back, noting:

According to the Cotton State’s governor, eliminating tax deductions is not the same as raising taxes.

"I am not for raising taxes and this actually would not be raising taxes," Bentley said. "It would be taking away some deductions. That is certainly one of the things we'll be looking at."

Bentley is wrong. By signing the Taxpayer Protection Pledge, the governor has committed to “oppos[ing] changes in tax deductions or credits that increase the net tax burden on Americans.” 

Enacting legislation that burdens taxpayers with higher taxes and fees to fuel exorbitant state spending, goes against his written promise to the people of Alabama to "oppose and veto any and all efforts to increase taxes." Americans for Tax Reform encourages Gov. Bentley to pursue revenue neutral, pro-growth tax reform and enact spending restraint instead of raising taxes on Alabama families.

Now Gov. Bentley is floating a plan which would raise taxes in Alabama by roughly $700 million, according to Yellowhammer News, despite having previously opposed tax increases:

“When you hurt businesses and you tax businesses, you’re going to lose jobs and we need to be creating jobs,” he said. He went a step further and signed Americans for Tax Reform’s “Taxpayer Protection Pledge,” committing himself in writing to opposing all tax increases. During his most recent campaign, Gov. Bentley’s re-election ads also prominently displayed the words “No New Taxes.” 

That’s right. Despite having won two gubernatorial races by campaigning against higher taxes, featuring his promise to not raise taxes on his website, and making a written promise to the people of Alabama to not raise their taxes, Gov. Bentley is now pushing for just that. Higher taxes.

The American people have historically reacted poorly to politicians who promise not to raise taxes and then do. Broken promises on taxes cost George H.W. Bush a second term as President and Tom Corbett a second term as Governor of Pennsylvania. When you make a promise, people expect you to keep it. This might explain why Gov. Bentley waiting to announce his intention to break his promise against higher taxes until after he won re-election. 

The Alabama Republican Party has already responded to Gov. Bentley’s plan, passing a resolution in opposition to any proposed tax hikes. Yellowhammer News reported that the resolution read:

“Alabama is still in a state of recovery from the recent and extended recession that has gripped this state and the entire nation for the past several years,” the resolution said. “Be it therefore resolved that we, the members of the Alabama Republican Party State Executive Committee call upon Governor Bentley and legislative leaders to consider options other than an increased tax burden on Alabama citizens as a solution to the state’s fiscal problems.” 

Between 2000 and 2009, state spending in Alabama has exceeded the rate of inflation in population growth by just over $20 billion. Gov. Bentley should take the lead and work with legislative leadership to pursue reductions in state spending and truly pro-growth tax reform like that enacted in North Carolina and Wisconsin. 

Help Americans for Tax Reform stop Gov. Bentley’s $700 million tax hike. Call Gov. Bentley’s office at (334) 242-7100 or click here to email and tell him stand by his promise to Alabama taxpayers to oppose any and all efforts to increase taxes.

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Tennessee Has Opportunity To Become A True No Income Tax State In 2015

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Posted by Cooper Lohr, Patrick Gleason on Monday, February 23rd, 2015, 4:14 PM PERMALINK


Tennessee is smart to not tax wages. However, the state does have a tax investment income, known as The Hall Tax. Enacted in 1929 by then Tennessee Senator Frank Hall, the Hall Tax imposes a 6% levy on investment income. Senator Mark Green and Representative Charles Sargent have proposed legislation to repeal the Hall Tax and make Tennessee a true no income tax state. With other states, including many in the same region as Tennessee, moving to cut taxes and make their codes more competitive this year, it is important for Volunteer State legislators to make the most of the 2015 session by passing reforms to make the state as attractive as possible to investment, job creation, and retirees looking for a friendly place to settle down. The best way to do so is to get rid of the Hall Tax

Below is a copy of the letter Americans for Tax Reform sent to Tennessee Legislators, urging them to phase out the Hall Tax:

 

Dear Members of the Tennessee Legislature,

On behalf of Americans for Tax Reform and our supporters across Tennessee, I urge you to use the 2015 session to pass legislation that protects Tennessee taxpayers and fosters economic growth. After being hit with over 20 federal tax increases in recent years, it is imperative that state lawmakers stand up for Tennessee taxpayers.

One piece of legislation that does nothing to help taxpayers at all and should be rejected is Senate Bill 246, which would prohibit beer producers from owning distributorships except under very restricted and temporary circumstances. Legislation like SB 246 represents the classic case of government seeking to pick winners and losers. Passage of SB 246 would stifle investment and damage Tennessee’s reputation as a business-friendly state. The type of government meddling in legitimate private sector business transactions that would result from passage of SB 246 is the sort of thing one would expect to encounter in Illinois or California, not Tennessee. As such, I urge you to reject and vote “no” on SB 246.

A better use of time for lawmakers looking to benefit the state’s economy during the 2015 session is to pass legislation to phase out the six percent tax on dividend income, referred to as the Hall Tax. The non-partisan Tax Foundation released analysis showing how elimination of the Hall Tax would boost Tennessee’s economic competitiveness. Tennessee currently has the 15th best business tax climate in the nation. However, if lawmakers repeal the state’s tax on investment income, Tennessee would have the 11th best business tax climate in the nation.

The Hall Tax does far more damage than it’s worth, raising what amounts to less than one percent of state and local revenue. With average economic growth and modest spending restraint, lawmakers can easily cope with the Hall Tax’s elimination. It’s even more manageable when considering that proposals to eliminate the Hall Tax, such as those put forward by Senator Mark Green and Representative Charles Sargent, phase the tax out over a number of years.

Tax relief isn’t just good politics, it’s good policy. Tax Foundation economist William McBride reviewed academic literature going back three decades and found, "While there are a variety of methods and data sources, the results consistently point to significant negative effects of taxes on economic growth even after controlling for various other factors such as government spending, business cycle conditions and monetary policy."

In McBride's survey of 26 studies dating to 1983, he found "all but three of those studies, and every study in the last 15 years, find a negative effect of taxes on growth." John Hood, chairman of the John Locke Foundation, found that keeping state and local tax and regulatory burdens as low as possible fosters economic growth when he analyzed 681 peer-reviewed academic journal articles going back to 1990. "Most studies find," Hood discovered, "that lower levels of taxes and spending, less-intrusive regulation correlate with stronger economic performance."

Tennessee has lower taxes than most states, but that doesn’t mean lawmakers should rest on their laurels while other states in the region and across the country continue to propose and enact reforms that make their tax codes more competitive. As such, I urge you to use the 2015 session to make Tennessee a true no-income-tax state by beginning to phase out the Hall Tax and to reject onerous regulations, such as those that SB 246 would lead to. Americans for Tax Reform will continue to follow these issues closely throughout session and will be educating your constituents as to how you vote on these important matters. If you have any questions, please contact Patrick Gleason, ATR’s director of state affairs, at (202) 785-0266 or pgleason@atr.org.

Onward,

Grover Norquist

Photo Credit: 
Ronnie R.

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John

Tennessee is misspelled.


ATR Urges Utah Lawmakers To Support House Bill 141

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Posted by John McEwan, Patrick Gleason on Monday, February 23rd, 2015, 1:54 PM PERMALINK


Last year the Utah Department of Insurance issued a ruling prohibiting small businesses across the state from utilizing the services of Zenefits, a company that provides employers with a free online platform to manage human resources activities such as hiring, payroll, retirement plans, and health insurance. This behavior is highly unusual for a state that prides itself as a haven for innovative businesses, both small and large. Recognizing the direct damage this regulatory edict places on Utah's technology sector, Representative John Knotwell introduced House Bill 141 in the Utah House of Representatives. If passed, HB 141 would lift the ban on Zenefits and make clear that Utah supports innovative companies and technologies.

 

Below is a copy of the letter Americans for Tax Reform sent to Utah representatives urging them to support HB 141: 

 

Dear Members of the Utah House of Representatives,

Utah currently has the dubious distinction of being the only state in the nation to ban an innovative new technology that provides tremendous benefits for small businesses. On behalf of Americans for Tax Reform and our supporters across Utah, I urge you to support and vote for House Bill 141, legislation introduced by Representative John Knotwell that would fix this problem and ensure Utah retains its reputation as a pro-business state that welcomes innovative companies and entrepreneurs.

Last year the Utah Department of Insurance issued a ruling prohibiting small businesses across the state from utilizing the services of Zenefits, a company that provides employers with a free online platform to manage human resources activities such as hiring, payroll, retirement plans, and health insurance.

20th century brick and mortar health insurance brokers, rather than try to compete, decided to instead get state regulators to shut down their innovative competition. Imagine if early in the 20th century, horse and buggy operators successfully shut down the emerging automobile industry. That might sound ridiculous but it is analogous to what the health insurance brokers got Utah regulators to do to Zenefits.

This situation represents a classic case of protectionism, in which entrenched actors in an industry use the heavy hand of government to shutdown competition. The result of this is less choice and higher costs for consumers. In the case of the Zenefits ban, the victims are Utah small businesses, the engines of job-creation, who are now needlessly deprived of easy-to-use technology that was reducing costs and increasing their job-creating capacity. Such a misguided ruling, aside from the economic harm it does to in-state employers, does great damage to Utah’s reputation as a business-friendly state that is attractive to high tech companies, entrepreneurs, and startups. HB 141 would reverse this damage and ensure Utah retains its status as a hub of commerce and innovation.

HB 141 would, if passed, lift the ban on Zenefits and make clear that Utah supports innovative companies and technologies. Passage of HB 141 would clarify a confusing law that does unnecessary harm to Utah small businesses. Lifting the ban on Zenefits will provide Utah employers with an easy-to-use online platform that reduces costs, thereby freeing up resources to invest in their businesses and hire more workers. As such, I urge you to support HB 141, legislation that is important to Utah’s economy and reputation.

Americans for Tax Reform will continue to follow this issue closely throughout the session and will be educating your constituents as to how you vote on this important matter. If you have any questions, please contact Patrick Gleason, ATR’s director of state affairs, at (202) 785-0266 or pgleason@atr.org.

Onward,

Grover Norquist

President, Americans for Tax Reform

Photo Credit: 
Mathieu Thouvenin

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The Grover Norquist Show: Setting the Record Straight on Water Rights Settlements and Earmarks

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Posted by Adam Radman on Monday, February 23rd, 2015, 1:27 PM PERMALINK


Taxpayer Protection Alliance's Michi Illjazi joins ATR's Grover Norquist to discuss how some are delaying a routine process and distorting the earmark debate. 

For more information on how delaying water settlements costs taxpayers money, click here.

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How Obamacare Screwed Up 800,000 Tax Returns

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Posted by Ryan Ellis on Friday, February 20th, 2015, 1:00 PM PERMALINK


The Associated Press is reporting today that an "erroneous" glitch in Obamacare tax forms is causing filing season to come to a halt for 800,000 taxpayers.  Tens of thousands of these families have actually already filed and will need to file amended returns redundantly.

Americans for Tax Reform can shed some light on what the "erroneous" problem is.  The affected form for Healthcare.gov enrollees is known as an IRS Form 1095-A.  It documents health insurance coverage obtained through the federal healthcare.gov exchange.  It reports premiums charged by month.  It is supposed to also report the amount of a tax credit advanced from the IRS to the covered family's insurance company.  Finally, a middle column is supposed to say what the average premium amount was for the second lowest-cost silver plan (the poetically-named "SLCSP").

All three inputs--monthly premium cost of the health insurance plan, the SLCSP, and the advanced premium tax credit amount--are vital to calculating the accurate tax credit a taxpayer is entitled to under the Obamacare law.  Without even one of these inputs, the calculation is thrown off.  It would therefore also be impossible to determine whether the advanced tax credit was too generous (in which case the taxpayer may owe the IRS money), or too stingy (in which case the taxpayer claims the remaining credit amount on his 1040 filing).

ATR has obtained two 1095-A tax forms issued to healthcare.gov customers.  In each case, the silver plan column each month had an entry of "$0.00."  No data was provided.  It was impossible for these taxpayers to even make a guess of what their tax credit for the year was supposed to be, or if they were due a tax credit at all.  

It is ATR's belief that these 800,000 taxpayers were similarly issued 1095-As without the absolutely vital SLCSP numbers.  Until those numbers are provided by the dysfunctional healthcare.gov bureaucracy, it will not be possible for these taxpayers to complete their income tax filing accurately. They will not be able to determine if any advanced tax credits they received were too generous or too stingy.  

800,000 families are literally caught in limbo until healthcare.gov gets its act together.

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kimhil

"800,000 families are literally caught in limbo until healthcare.gov gets its act together." - Just pass it, then we'll see what's in it, by - Nancy Pelosi - perhaps the people in government, and those electing these wealth stealers should get their act together.

Read more: http://www.atr.org/how-obamaca...

Follow us: @taxreformer on Twitter


Norquist on Obamacare Tax Debacle: “How many Obama appointees will get fired?”

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Posted by John Kartch on Friday, February 20th, 2015, 11:50 AM PERMALINK


With the AP reporting the Obama administration sent 800,000 Healthcare.gov customers the wrong tax information, Americans for Tax Reform president Grover Norquist issued the following statement: 

"800,000 or more Americans are having their lives disrupted and damaged by the Obama administration’s incompetence and overreach. They said they could run our lives better than we can. They were wrong. They can’t even get this one piece right. How many Obama appointees will get fired? My guess: Zero."

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kimhil

"How many Obama appointees will get fired? My guess: Zero." - birds of a feather stick together - Even Ohio Governor John Kasich is better than a progressive - he supports some delusional progressive programs, but he is not a thief, spreading lies for personal wealth - he has a history of helping people. For God's sake, at least we can find what his history is, and decide what he values, without censorship.


Flashback: Navigators Warned Not to Leave Tax Returns on Fax Machines

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Posted by John Kartch on Friday, February 20th, 2015, 11:08 AM PERMALINK


The Associated Press is reporting that "800,000 HealthCare.gov customers the wrong tax information, and officials are asking those consumers to delay filing their 2014 taxes.” 

The Obama administration says it is "still investigating the root cause of the problem.”

[Norquist on Obamacare Tax Debacle: "How many Obama appointees will get fired?"]

Taxpayers got an early warning that Obamacare’s interaction with the tax code was going to be a debacle. In 2013, the official Obamacare Navigator manual warned navigators not to leave Americans’ personal tax information laying around “on printers and fax machines”:

The Department of Health and Human Services has a helpful tip for the program's so-called Navigators: “Do not leave documents that contain PII [Personally Identifiable Information] or tax return information on printers and fax machines.”

The warning is contained in Section 2.4.3 of the 207-page Health Insurance Marketplace Navigator Standard Operating Procedures Manual.

The same section asks navigators to “double-check” the fax number before faxing Obamacare enrollee’s tax returns:

“When faxing PII or tax return information, double-check that the recipient’s fax number is correct and that someone is able to pick up the faxed information immediately.”

Because the key components of Obamacare are being enforced by the IRS, navigators will have access to highly sensitive identifying information. The Navigator manual describes Personally Identifiable Information as follows:

  • Identifying information such as consumers’ names, addresses, or SSNs
  • Information about consumers’ incomes, personal finances, debts, deductions and exemptions
  • Any action taken by the IRS against consumers, such as investigations or penalties
  • Any private written agreements (such as a pricing agreement) with the IRS and any background information about these agreements
  • Relevant information, even if not found on the return (e.g., expenses)


Additional excerpts from the Navigator Manual:

  • No fake smiles: "Do not pretend to smile, or produce a false smile; these are easy to spot and send the wrong messages." – Section 2.2.1
  • Listen: “By not listening you can become very frustrating to consumers.” – Section 2.2.3
  • Apologize: “Apologizing when things go wrong demonstrates that you care about consumers and their experiences.” – Section 2.2.4
  • "Be Memorable - For the Right Reasons." – Section 2.2.6


The Navigator manual can be found here.

Photo Credit: 
Abhisek Sarda

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Crossing the Delaware

The Obama administration says it is "still investigating the root cause of the problem.”

Obama called - he found the problem. Bush did it.

daveca

Well then lets get Bush back to FIX THIS DISASTER.

Other things Bush can fix are:

*Obama losing Iraq
* high priced Obama gas
* getting jobs back

PRESIDENT Reagans bones could do a better job than O'Muslim, at least his bones are more American!

Littleredtop

This ACA program, popularly known as Obamacare, is the biggest joke that has ever been perpetrated on the American people and we've had plenty of jokes perpetrated on us in recent years. I don't mean to sound like a conspiracy theorist or some other form of nut-job but there can be no question that this Obama administration has no purpose other than to destroy American and what she stands for. Obama himself is not smart enough to singularly pull that off or, for that matter, dream up the idea in the first place. Who then? George Soros of course and the really sad thing about it is that the vast majority of Americans have no idea who he is or have never even heard of him.


Illinois Nanny State Candy Tax Takes Aim at Small Business and Consumers

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Posted by Dorothy Jetter on Wednesday, February 18th, 2015, 5:23 PM PERMALINK


In 2009, the state of Illinois implemented a series of tax increases on several items, including alcohol, soft drinks, personal hygiene products, and candy.  

 
The Candy Tax is one of many examples of the government interfering in the lives of Americans by trying to influence what they may choose to purchase.  In doing so, politicians have interfered where they shouldn't-- making the tax code unmanageable for both retailers and consumers.   

The Illinois Tax Code defines candy as:

“a preparation of sugar, honey, or other natural or artificial sweeteners in combination with chocolate, fruits, nuts or other ingredients or flavorings in the form of bars, drops, or pieces. Candy does not include any preparation that contains flour or requires refrigeration.”

 Mike Wynne, a former counsel for the Illinois Department of Revenue, explains the frivolous nature of the tax, "If you put yogurt on a piece of fruit, it becomes a candy, but if you put it on a pretzel [which contains flour], it's food."
 
“Candy” Tax seems to be all the rage among states in recent years.  Similar efforts have been made in Washington, Colorado, and Connecticut.  Because of how the term candy is defined, confusion has ensued for retailers across the country.   In Washington State, Butterfingers are taxed while Kit Kats are not.  In Colorado, Kit-Kats are also untaxed, but Twix bars are subject levies. 

The Wall Street Journal predicts:

“More than a dozen states have passed or proposed some sort of candy or soda tax in the 2010 legislative session, and most of them are bound to face some sort of confusion.”

 Perhaps the most concerning part of this confusing code is that retailers are expected to implement the tax increases appropriately.  Because of this “candy” tax, small business owners will be forced to commit their limited resources to correctly following the law. These ridiculous tax increases are not just bad for consumers, they are bad for business in general. 
  
Arthur Paris, owner of Carnival Foods in Lincoln Park, explained how he predicted his small business would suffer:

"I anticipate having to make some arbitrary choices about what a high tax is and what a low tax is.  It is virtually impossible for a one-horse shop like me to get this right." 

Art Potash, another small business owner, added:

"Good luck explaining this to customers.  Then we're the bad guy because we can't explain it to them sufficiently. ... It's a nightmare on many levels."

Because of this excise, Illinoisans are taxed an additional 5.25% on certain items, which adds up to 10.25% in sales tax for a candy bar.  Certainly, it is practices like this one that have earned Chicago the title, “highest taxed city in the nation.”

 

Photo Credit: 
Moyan Brenn

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ATR Supports “Health Freedom for Seniors” Act


Posted by Ryan Ellis on Tuesday, February 17th, 2015, 12:37 PM PERMALINK


Last week, H.R. 975 the “Health Freedom for Seniors Act” was introduced in the U.S. House of Representatives. This legislation will reform health savings accounts (HSA) to empower seniors to save money for their own health care. ATR endorses this legislation and urges members of Congress to support this bill.

H.R. 975, introduced by Representative Bill Huizenga (R- Mich.) will help ensure seniors are able to use their hard earned savings for retirement.  Under current law, Americans who reach age 70 and one-half are required to begin making “required minimum distributions” (RMDs) from IRAs and 401(k) plans. The accounts must be drawn down, regardless of whether the taxpayer has other funds with which to support themselves.

H.R. 975 would put a stop to this absurd law by permitting seniors a tax-free rollover of their RMD into a HSA.  Because HSA dollars have no required distributions, this allows savings to be preserved for things like long-term care insurance, Medicare premiums, and other health needs as one gets further into retirement. 

With healthcare costs spiraling out of control, seniors need this common sense reform now more than ever to help pay for their healthcare expenses. ATR supports this legislation and urges Congress to bring this legislation forward for a vote.

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hidden