Recently I read an article in the CPA Practice Advisor written by Isaac O’Bannon discussing the fact that the IRS is not going to enforce the ACA mandate that individuals have medical insurance coverage all 12 months of the year.

Individuals will no longer be required to fill out the line 61 on tax forms which ask whether they had health insurance throughout the year, and penalizes them if they did not. 

Under the healthcare law, the IRS would reject tax returns if taxpayers didn’t have insurance, unless they were exempt. If the line was left empty on their tax return, it was labeled a “silent return” and rejected. The agency now says that it will process returns regardless of the health insurance line.

Congressional Republicans and many small business proponents have been pushing for years for either the repeal or replacement of the Affordable Care Act, aka Obamacare. Most notably, many who are against the healthcare program consider the individual mandate to be an affront, despite the U.S. Supreme Court upholding that provision two years ago.

The most recent action by the IRS will have a major impact on the ability of the healthcare law to continue, since there will be no enforcement of Americans to have insurance. Previously, those without insurance would face a penalty of up to $695. or 2.5 percent of household income.

In another Obamacare-related development, the department of Health and Human Services has implemented new rules that would make it harder for taxpayers to buy health coverage outside of official enrollment periods, lets insurance companies restrict coverage sooner if customers are late on payments, and has tougher eligibility checks.

Although the IRS has stopped enforcing the tax form reporting requirement, the Affordable Care Act is still legislatively in effect and, according to a note from Drake Software, “taxpayers remain required to follow the law and pay what they may owe.”

The IRS statement echoed that advice:

“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 says that although silent returns won’t be automatically rejected, they may eventually be questioned by the agency and the penalty assessed. Drake Software advises taxpayers to remember that those leaving line 61 blank “could receive communication from the IRS, experience delayed refunds, and face subsequent collection activity to recoup the individual shared responsibility payment.”

If you have questions regarding how this may affect you and your return, contact your CPA to discuss.

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