IRS Says They Won’t Really Enforce The Obamacare Mandate

IRS Says They Won’t Really Enforce The Obamacare Mandate

Teach itsthelaw

Did you maintain appropriate insurance coverage in 2016? Perhaps you switched jobs, and, being that most companies require you be on the job for 90 days before you are allowed to be on their insurance plan, meaning you were probably out of insurance for 91 days, meaning you are ripe to be slapped with a fine/tax/fee by the IRS. Perhaps you lost your job and were out of insurance for over 90 days, and could be hit with the mandate. Not anymore

(Hit and Run) How much difference does a single line on a tax form make? For Obamacare’s individual mandate, the answer might be quite a lot.

Following President Donald Trump’s executive order instructing agencies to provide relief from the health law, the Internal Revenue Service appears to be taking a more lax approach to the coverage requirement. (snip)

The health law’s individual mandate requires everyone to either maintain qualifying health coverage or pay a tax penalty, known as a “shared responsibility payment.” The IRS was set to require filers to indicate whether they had maintained coverage in 2016 or paid the penalty by filling out line 61 on their form 1040s. Alternatively, they could claim exemption from the mandate by filing a form 8965.

For most filers, filling out line 61 would be mandatory. The IRS would not accept 1040s unless the coverage box was checked, or the shared responsibility payment noted, or the exemption form included. Otherwise they would be labeled “silent returns” and rejected.

Instead, however, filling out that line will be optional.

Earlier this month, the IRS quietly altered its rules to allow the submission of 1040s with nothing on line 61. The IRS says it still maintains the option to follow up with those who elect not to indicate their coverage status, although it’s not clear what circumstances might trigger a follow up.

I suspect that as this news starts making its way through to the citizens, many will choose to refuse to check the box even if they did have qualifying health insurance in 2016, much like so many chose “American” on the last census form instead of their race. One question is whether electronic 1040s will allow someone to skip over line 61, as they would usually require all lines to be completed. Perhaps the tax software companies will make changes? Later in the article we see that many are making changes.

The IRS notes that taxpayers are still required to pay the mandate penalty, if applicable. “Legislative provisions of the ACA law are still in force until changed by the Congress, and taxpayers remain required to follow the law and pay what they may owe‎,” the agency statement said.

Ellis says the new policy doesn’t fully rise to the level of declining to enforce the law. “If the IRS turns a blind eye to people’s status, that isn’t quite not enforcing it,” he says. “It’s more like the IRS wanting to maintain plausible deniability.”

Essentially, monkey don’t see, monkey don’t penalize.

Patterico, posting at Red State, has hesitations about this method, and has some valid points and makes a good case, particularly about weakening the law making it easier for the GOP to not repeal and replace. Perhaps so, but, that’s politics. For many, paying the fine/tax/fee is a bread and butter issue, and they’ll like this.

Crossed at Pirate’s Cove. Follow me on Twitter @WilliamTeach.

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