Trump of­fi­cials may not en­force in­sur­ance rule

The Washington Times Daily - - POLITICS - BY TOM HOWELL JR.

Amer­i­cans rac­ing to Tues­day’s tax dead­line can file their re­turns even if they ig­nore the line that asks whether they had health in­sur­ance last year — an early, vis­i­ble re­sult of Pres­i­dent Trump’s or­der di­rect­ing agen­cies to limit Oba­macare’s reach.

The new ad­min­is­tra­tion is still try­ing to grap­ple with how intensely it will en­force Oba­macare, but it an­nounced ear­lier this year that it won’t re­ject tax re­turns just be­cause some­one leaves the line about health cov­er­age blank.

The IRS could, though, still fol­low up with ques­tions — or even an au­dit — of those who re­fused to say whether they had cov­er­age, as required for most Amer­i­cans un­der the Af­ford­able Care Act’s in­di­vid­ual man­date.

“My in­stinct is that en­force­ment of the man­date this tax sea­son will be sim­i­lar to the past year, which is to say that en­force­ment will not be ro­bust,” said Ni­cole El­liott, a part­ner at Hol­land and Knight who over­saw im­ple­men­ta­tion of Oba­macare at the IRS dur­ing the last ad­min­is­tra­tion.

This was to be the year the IRS got tough. After sev­eral years of lax en­force­ment, the tax col­lec­tion agency warned last year that it was go­ing to refuse to ac­cept any re­turns that didn’t fill out Line 61. The agency re­versed course after Mr. Trump was sworn in and is­sued an ex­ec­u­tive or­der call­ing for le­niency in en­forc­ing Oba­macare.

Tur­boTax and H&R Block are among tax-prepa­ra­tion ser­vices that quickly up­dated their soft­ware so that cus­tomers can sub­mit their re­turns even if they refuse to cer­tify their health cov­er­age.

“Peo­ple can go through and not re­port their health care sta­tus and they won’t get re­jected,” said Lisa Lewis, a tax ex­pert at Tur­boTax, a pop­u­lar on­line tax-fil­ing ser­vice.

Ex­perts said the change won’t have an im­me­di­ate im­pact on the Oba­macare mar­ket­place. Cus­tomers are fil­ing re­turns that re­flect choices they made be­fore Mr. Trump took of­fice and made changes.

Yet it could im­pact the be­hav­ior of tax­pay­ers who lacked in­sur­ance in 2016 and are sup­posed to pay Un­cle Sam on Tax Day.

“Do they come clean and re­port the penalty they owe, or just stay silent about whether they had cov­er­age? These re­cent events will un­doubt­edly cause some tax­pay­ers to stay silent and hope the IRS does not come knock­ing,” Ms. El­liott said.

The tax for lack­ing in­sur­ance started out at just $95 or 1 per­cent of qual­i­fied in­come in 2014, but it phased into full ef­fect last year, at $695 or 2.5 per­cent of in­come.

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