IRS will enforce health coverage reporting on 2017 return

[Elrod]

On Friday, the IRS updated its page on health care reporting requirements to inform taxpayers and tax practitioners that it will not accept electronically filed 2017 individual income tax returns unless taxpayers indicate that they and everyone on their return had health care coverage, qualified for an exemption from coverage, or will make a shared-responsibility payment (under Sec. 5000A). The IRS also said that any returns filed on paper that do not address the health coverage requirements may be suspended until the Service receives additional information, and any refund due may be delayed.

https://www.journalofaccountancy.com/news/2017/oct/health-care-individual-mandate-on-2017-tax-returns-201717660.html

https://www.irs.gov/tax-professionals/aca-information-center-for-tax-professionals

[Catherine]

Gee, I thought they were already doing that.  

[Jack from Ohio]

1 hour ago, Catherine said:

Gee, I thought they were already doing that.  

I have a bridge to sell you....

[JohnH]

Can't help but wonder if IRS is throwing down the gauntlet with this announcement.  They got caught in political crosshairs this year and they had to punt with an awkward policy that left everyone guessing what to do.  With this announcement, they are clearly stating what they are planning to do next filing season.  If the administration/Congress want IRS to do something differently, then clear direction will need to be provided.  All in all, probably a smart move by IRS, and early enough for action to be taken before the filing season begins.

[jklcpa]

I agree, John. Much like many of us discussed here when this issue came up during the filing season, the law hadn't changed even though IRS said it wouldn't actively pursue. That was also compounded by the issue of whether the software would allow filing of "silent" returns without rejection, if I recall correctly.

I think it's a good thing that IRS has come out with its position before the filing season starts.

[Edsel]

Part of our ability to comply with these bold directives depends upon our clients' ability to receive 1095s on a timely basis.  Last year, after the big insurance companies had 4 years to comply with this by January 31, they whined to the IRS that they weren't ready.  So the IRS announced their deadline had been extended to March 15th.

This extended the coalition between powerful institutions to heap misery on the rest of us trying to comply.  Ask ourselves how much time we have to spend cleaning up the mess behind brokerage houses, financial custodians, etc. when they issue errant 1099s, and we all know they have the resources to do their job right.  Yet when it comes to compliance, these huge companies lead a charmed life, as I have not been aware of a single incident where these companies ever receive a penalty or have to be accountable for their train wrecks.

If their position on ACA enforcement has indeed changed, it could very well be that the fate of the ACA has only become more permanent than was perceived a year ago.

 

[jklcpa]

1 hour ago, Edsel said:

depends upon our clients' ability to receive 1095s on a timely basis. 

added something to this:  depends upon our clients' ability to receive ACCURATE 1095s on a timely basis. 

How many of us had to wait for clients to get these forms corrected?  Some here, I am sure.  Luckily I had only one, and the process of getting this corrected form caused a lengthy delay in filing an otherwise very basic return. 

I was bothered when I found out that the national marketplace sub'ed out that job of investigating and calculating corrected amounts or other reported data, and then that  information was transferred back to the marketplace to issue the corrected form.  Now with the Equifax debacle and hacking, it all bothers me a lot more.