Obamacare

[FEDUKE404]

About those penalties

I will do my best NOT to make this sound political in nature:

It is my understanding there are already a large number of employers (mostly of the union type and/or associated with certain politicians' favoritism) that are exempt from paying the "tax" if not participating in an appropriate medical plan.

How does that impact preparers who would encounter such an employee as a client??

And to JohnH re retirement. A very wise observation!

FE

[AZ-Tax]

Answers

I suppose IRS can now proceed with hiring more agents to enforce the new tax.

This brings all kinds of questions, though.
1. Will everybody have to file a tax return even if under minimum income requirements in order to affirm/swear/aver that they are covered?
2. Will IRS agents swoop down among the homeless living under bridges to compel them to file returns and pay the tax?
3. Will circular 230 include penalties for preparers who may have missed asking the right questions?
4. Will I benefit from the so called Affordable Health Care Act?
5. Will you?

Answers (more hiring of agents leads to lower unemployment)
1. Don't know but is it possible they would be on medicaid
2. From what I read, no.
3. Have to wait and see
4. Dont know your situation.
5. YES, and so will approx 25 of my clients who have pre-existing conditions.

[kpangelinan]

I suppose IRS can now proceed with hiring more agents to enforce the new tax.

This brings all kinds of questions, though.
1. Will everybody have to file a tax return even if under minimum income requirements in order to affirm/swear/aver that they are covered?
2. Will IRS agents swoop down among the homeless living under bridges to compel them to file returns and pay the tax?
3. Will circular 230 include penalties for preparers who may have missed asking the right questions?
4. Will I benefit from the so called Affordable Health Care Act?
5. Will you?

All good questions and why the transition is going to be ridiculous I think.

You could say the insurance mandate is a tax on those who earn income above the filing requirement, except that the tax won't be imposed if you buy insurance. Thus, rather than a tax on inaction, now it is a tax on earning income, with an exception for those who buy something.

That, however, is not what the Supreme Court said. The Court specifically said that nothing in the Constitution prevents Congress from imposing a tax on not taking any action, as long as it is a tax and not a violation of any law.

In other words, as long as it is just a tax on not taking any action, it is OK. If not taking any action violates the law, it is not OK.

Thus, if the government wants us to eat broccoli because it is good for us, they can’t pass a law that makes it a crime not to eat broccoli. But they can tax us for not eating broccoli.

This is a great way to look at it! I'd like to steal this statement. It's good.

Did Mr Justice Roberts define what "federal tax burden" really means?
Income tax only liability? Income tax plus AMT? That total less applicable credits?

Hmmm, wait a minute YOUR name is Roberts, too! (grin

It's going to be crazy.

[Burke]

Did Mr Justice Roberts define what "federal tax burden" really means?Income tax only liability? Income tax plus AMT? That total less applicable credits?

I would assume that he meant net income tax liability including AMT whether it was involved or not. And, that if one had no income tax liability, but DID have a Soc Sec tax liability ( I have those clients), it would not apply either. It remains to be seen how credits would factor in. However, this would be determined NOT by the Supremes but by IRS regs, don't you think?

[Roberts]

This is not a partisan comment, but neither is it tax-related. I state it only to educate readers of history and not slant the dialogue.

I assume you are referring to the recent Presidential proclamation which essentially brought the "Dream Act" for immigrants into reality.

No. I was referring to National Defense Authorization Act which had bi-partisan support, the Kill List (which has bi-partisan support), the Patriot Act (which has bi-partisan support) and the War Powers resolution (that had bi-partisan support 2x).

[Gary2]

For what it's worth:

In Massachusetts, where the health care reform is often cited as a model for the federal version:

1. There are income thresholds below which the mandate penalty doesn't apply. Off the top of my head, it's 150% of the poverty level for the family size.
2. There is a three month per year grace period that isn't penalized. This helps people just moving to the state as well as people who were laid off and needed the time either to get a new job or get their MassHealth application processed.
3. Although getting accepted into MassHealth was a bureaucratic pain when it first started, I see more and more people who haven't had any trouble either getting accepted or staying on it. I personally just attribute this to the state agency just going through the initial growing pains and learning curve.
4. Applying and being denied MassHealth also mitigates the penalty. I haven't seen enough people in this category to know the precise details.
5. My stock line for explaining the motivation to people is that it helps get people who used to go to emergency rooms to be able to go to regular doctors, saving the state money. The money collected from people who do wind up paying the penalty helps over the MassHealth costs (from covering more people for more things). At least that's the theory, and it's a reasonable theory on the surface. No comment on whether it works in practice, but I will opine that health care costs are so complicated that trying to correlate a single aspect of reform to the average costs is just bad logic.
6. It's not unusual to see people who consciously choose to pay the penalty instead of insurance. The MA penalty is calculated by the state as 50% of what the state thinks the individual could have paid.
7. The last point reminds me (and it's too hard to edit on my iPod) that there are additional exemptions from the penalty, besides the poverty rate. The poverty rate exemption just shows that people not required to file due to low income won't be subject to the penalty regardless. The other common exemption is that if the state tables for your cost of insurance based on your county is higher than the state calculates you can afford (again based on family size), then the penalty is waived. Other exemptions include religious waivers, and employer options that don't exactly meet the rules but are close enough.

[ChEAr$]

Waving at waivers

How about over 1,800 employers have thus far obtained the waiver. Employers like
McDonalds, Darden restaurants (Red Lobster & Olive Garden), AARP, and " countless labor unions. The United Federation of Teachers Welfare Fund, with 351,000 people, was also a waiver recipient. " according to Michelle Malkin. And some states, also.

Most of the employers in that 1,800 are not small businesses, nor have less than 50 employees.

[Bees Knees]

The motives behind the law and fairness of it are irrelevant. There are all kinds of things society may feel we should do. We should buy a home. We should give money to charity. We should buy a new car and get rid of that clunker. We should buy an electric car. We should go to college. We should raise children. We should get a job, even if it doesn’t pay much and we lose our welfare benefits. We should buy health insurance.

The Court is saying the government cannot pass a law that forces us to buy a home, give to charity, buy a new car, buy an electric car, go to college, raise kids, get a job, or buy health insurance. The government can, however, encourage us to do the above by lowering or raising our taxes depending on how we respond to the above governmental directives.

There really is nothing new here. The government has been conducting social engineering ever since the passage of the 16th Amendment authorizing the government to tax our income. Nothing in that Amendment says the tax has to be equally applied to each citizen.

[Jesse]

Just sayin' -

according to Michelle Malkin

I'd definitely do a little research before I took her word, I bet you're only getting 1/2 the story at best.

[ChEAr$]

I'd definitely do a little research before I took her word, I bet you're only getting 1/2 the story at best.

Ah, you mean the real number is twice the 8,000? I wouldn't doubt it.

[JohnH]

What's more important in determining who gets waivers - the size of the employer or the size of the company's political contributions?

[Jesse]

Ah, you mean the real number is twice the 8,000? I wouldn't doubt it.

I doubt that too. Michelle Malkin is as reliable as Ed Schultz. Ed probably says there are no waivers.

I think, but I'm not 100% sure, that these companies were given "waivers" to bring the policies into compliance by 2014.

It would be wonderful if these people could actually get together, even if that does mean compromise, and work for the good of the people instead of just to line their pockets and that goes for BOTH sides!

[kpangelinan]

I doubt that too. Michelle Malkin is as reliable as Ed Schultz. Ed probably says there are no waivers.

I think, but I'm not 100% sure, that these companies were given "waivers" to bring the policies into compliance by 2014.

It would be wonderful if these people could actually get together, even if that does mean compromise, and work for the good of the people instead of just to line their pockets and that goes for BOTH sides!

I've seen Pelosi mention waivers she's given to companies within her state.....I wonder if they contribute to her campaign........nah!

[Uncle Sam]

Obamacare

Let's divert slightly from health insurance.
A client called today asking about something I wasn't prepared for and would like some clue.

He claims "he heard from his doctor" that if after 2013 a person sells a residence that would otherwise qualify for the $ 250,000 exclusion - that under this Obamacare monstrosity, there would be a 3% tax. (on what I don't know - I know no other details).
Is there any truth to this? What are the true facts to put this in proper perspective?
Thanks all.

[Bees Knees]

Let's divert slightly from health insurance.
A client called today asking about something I wasn't prepared for and would like some clue.

He claims "he heard from his doctor" that if after 2013 a person sells a residence that would otherwise qualify for the $ 250,000 exclusion - that under this Obamacare monstrosity, there would be a 3% tax. (on what I don't know - I know no other details).
Is there any truth to this? What are the true facts to put this in proper perspective?
Thanks all.

See my post on this subject here: http://www.thetaxbook.com/forums/sho...ighlight=Bogus