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    Exception for Affordable Care Act

    My client informed me that it is "against his Christian beliefs to purchase Obamacare". Does that qualify for an exception? He said he cannot afford regular insurance. So they have none. So it is not medical treatment or medical insurance that he is against but against Obamacare.
    He owes money at the end of the year but he will only pay his income taxes. He will mark it to apply to Federal income taxes due and that will leave the penalty still there.

    Any suggestions??

    Linda EA

    #2
    Originally posted by oceanlovin'ea View Post
    My client informed me that it is "against his Christian beliefs to purchase Obamacare". Does that qualify for an exception? He said he cannot afford regular insurance. So they have none. So it is not medical treatment or medical insurance that he is against but against Obamacare.
    He owes money at the end of the year but he will only pay his income taxes. He will mark it to apply to Federal income taxes due and that will leave the penalty still there.

    Any suggestions??

    Linda EA
    WOW... don't think it will fly.... I believe you should file return with penalty and leave the client to his own whims.

    How about "Unaffordable" as a reason?
    This post is for discussion purposes only and should be verified with other sources before actual use.

    Many times I post additional info on the post, Click on "message board" for updated content.

    Comment


      #3
      In one of the seminars I attended, it was brought out that a person could designate how the money he sends in is to be applied. For example, a person could owe on several years taxes, but wish to apply a payment he sent in to 2013 instead of the oldest year. They have to apply it to where you designate on your check. So you can designate that the amount is to be applied to balance due on income taxes and that is where it would have to be applied.

      Unaffordable will work. Insurance is unaffordable to him even though he never checked out the marketplace.

      Linda, EA

      Comment


        #4
        If you prepare it as unaffordable then he is good to go..... right?

        Premium credits can be substantial...... ????? Pennies on the Dollar...... ?????
        Last edited by BOB W; 04-27-2015, 11:00 AM.
        This post is for discussion purposes only and should be verified with other sources before actual use.

        Many times I post additional info on the post, Click on "message board" for updated content.

        Comment


          #5
          Originally posted by oceanlovin'ea View Post
          Unaffordable will work. Insurance is unaffordable to him even though he never checked out the marketplace.
          The definition of unaffordable is cost of bronze plan less any applicable credits being over 8% of AGI.

          Comment


            #6
            Thank you

            Originally posted by kathyc2 View Post
            The definition of unaffordable is cost of bronze plan less any applicable credits being over 8% of AGI.
            I knew there had to be some criteria, and not just "hey we need an excuse," but I was too lazy to look. This whole deal has been such a flat tire. Sorry, did I say that out loud?
            If you loan someone $20 and never see them again, it was probably worth it.

            Comment


              #7
              Off track

              Sometimes we allow the topic to drift away from the original post to the extent that we don't address the question.

              As I understand it, the OP asked for grounds on religious beliefs (not affordability), and also asked how to allow for
              the taxpayer's refusal to pay. FWIW, affordability is something we can deal with as preparers (sorta), religious
              beliefs is not something we cannot, unless client is a member of a group exempted by the court decision.

              I don't believe in Obamacare either for any number of reasons, but none of them have anything to do with religion.

              There is movement among some organized groups to absolutely refuse to pay the penalty. I don't believe we as
              preparers can prepare a return without the penalty when there is no exemption. Then, how do we (as preparers)
              comply with the client's wish? Depends upon whether there is a refund or not.

              1. If a refund, the penalty will be absorbed and reduce the refund. I don't think we can leave the penalty off, but
              if the clients wants to prepare his own paper return and leave the penalty line blank there is nothing to stop him
              from this option.
              2. If client has to pay, the penalty will be part of the amount to pay. I think we can file the return electronically with
              the penalty calculated and give the client a 1040-V voucher. He/she can then shortchange the payment by the
              amount of the penalty and expect to get a bunch of nasty letters to which he can appeal based on beliefs. If this
              course of action is followed, we can tell the client that we won't be able to defend.
              3. The above assumes there will be either a refund or amount due. Does not address the situation where the refund
              is small when the penalty is left out, but becomes a balance due when the penalty is applied. Sort of a "twilight
              zone" situation.

              Comment


                #8
                People who fall into this "refusing to pay the penalty" category have the potential to be put into the same classification as tax protesters in general. Personally, I won't get involved in that sort of stuff because the hassle isn't worth it - certainly not worth the fee to prepare a return. So if I had a client who didn't meet a clearly defined category to exempt the penalty, but he/she didn't want to pay, I'd hand them a properly prepared paper return and then let them do what they want with it.
                "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

                Comment


                  #9
                  What I was told at a seminar was you can write all day long what you want it applied to, but they will apply it to your tax return.... Its up to the IRS how to apply it at a micro level... ACA penalty first (which is noncollectable) and then the rest to the actual income tax.

                  Good luck


                  Chris

                  Comment


                    #10
                    Found this

                    Originally posted by oceanlovin'ea View Post
                    My client informed me that it is "against his Christian beliefs to purchase Obamacare". Does that qualify for an exception? He said he cannot afford regular insurance. So they have none. So it is not medical treatment or medical insurance that he is against but against Obamacare.
                    Well, ok, I decided laziness was a tool of the devil and looked around a little. Here's straight from the horse's mouth on religious objections. Looks like he'd have to be opposed to insurance in general, not ObamaCare specifically.

                    If you don't have health coverage, you may have to pay a fee. You can get an exemption in certain cases. Most people must have qualifying health coverage or pay a fee for the months they don’t have insurance. But if you qualify for a health coverage exemption you don’t have to pay the fee


                    If you don't have health coverage, you may have to pay a fee. You can get an exemption in certain cases. Most people must have qualifying health coverage or pay a fee for the months they don’t have insurance. But if you qualify for a health coverage exemption you don’t have to pay the fee
                    If you loan someone $20 and never see them again, it was probably worth it.

                    Comment


                      #11
                      Links are good info. Had an OMG moment when I saw the 5/1/14 date, but checked and my guy didn't enroll (in Medicare) until 6/1/14. I had thought it was 3 mos.

                      Comment


                        #12
                        There have been a few of those moments

                        Originally posted by Burke View Post
                        Links are good info. Had an OMG moment when I saw the 5/1/14 date, but checked and my guy didn't enroll (in Medicare) until 6/1/14. I had thought it was 3 mos.
                        I had an OMG moment last week when I had to change insurance coverage because what I had was apparently not up to snuff, and my deductible went up and so did my premiums (44%). I don't think that word "affordable" means what they think it means.
                        If you loan someone $20 and never see them again, it was probably worth it.

                        Comment


                          #13
                          Originally posted by oceanlovin'ea View Post
                          My client informed me that it is "against his Christian beliefs to purchase Obamacare". Does that qualify for an exception? He said he cannot afford regular insurance. So they have none. So it is not medical treatment or medical insurance that he is against but against Obamacare.
                          He owes money at the end of the year but he will only pay his income taxes. He will mark it to apply to Federal income taxes due and that will leave the penalty still there.

                          Any suggestions??

                          Linda EA
                          This could be an old wives tale (new wives tale?) but I thought that taxpayers who don’t pay their ACA penalty are not subject to levies, liens, or criminal prosecution and that unless there were a refund or the taxpayer voluntarily paid the portion of the balance due attributable to the penalty it would just remain a liability until the taxpayer had some refund due. Thus, as long as there is never an overpayment of any kind, the IRS cannot collect it.

                          Am I misinterpreting §5000A(g)(2)(B) at the bottom of this page:

                          Doug

                          Comment


                            #14
                            Originally posted by dtlee View Post
                            This could be an old wives tale (new wives tale?) but I thought that taxpayers who don’t pay their ACA penalty are not subject to levies, liens, or criminal prosecution and that unless there were a refund or the taxpayer voluntarily paid the portion of the balance due attributable to the penalty it would just remain a liability until the taxpayer had some refund due. Thus, as long as there is never an overpayment of any kind, the IRS cannot collect it.

                            Am I misinterpreting §5000A(g)(2)(B) at the bottom of this page:

                            https://www.law.cornell.edu/uscode/text/26/5000A
                            On this page,



                            they say
                            29. What happens if I owe an individual shared responsibility payment, but I cannot afford to make the payment when filing my tax return?

                            The IRS routinely works with taxpayers who owe amounts they cannot afford to pay. The law prohibits the IRS from using liens or levies to collect any individual shared responsibility payment. However, if you owe a shared responsibility payment, the IRS may offset that liability against any tax refund that may be due to you.
                            Doug

                            Comment

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