IRS loosens enforcement of the individual mandate

The Internal Revenue Service has quietly stopped rejecting tax returns where the filer does not fill out their health coverage status, according to a report from Reason, a libertarian blog and magazine.

Under the ACA's individual mandate, people were required to indicate if they maintained health insurance throughout the year prior on their tax returns on line 61 of their form 1040s or face a tax penalty. If line 61 was left blank, the forms were dubbed "silent" and were rejected, according to the report.  

However, Reason's Peter Suderman noticed the IRS changed its rules and will now accept silent returns, as a direct response to President Donald Trump's executive order to lessen the economic burden of the ACA.

The IRS provided Reason with the following statement: "The recent executive order directed federal agencies to exercise authority and discretion available to them to reduce potential burden," the statement said. "Consistent with that, the IRS has decided to make changes that would continue to allow electronic and paper returns to be accepted for processing in instances where a taxpayer doesn't indicate their coverage status."

By allowing silent returns to be processed, the IRS is essentially not enforcing the individual mandate, according to the report. However, it is important to note the IRS is technically still enforcing the mandate if people volunteer on their 1040s that they didn't have health coverage in 2016.

"If the IRS turns a blind eye to people's status, that isn't quite not enforcing it," Ryan Ellis, a Senior Fellow at the Conservative Reform Network, told Reason. "It's more like the IRS wanting to maintain plausible deniability."

Read more here.


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