IRS and line 61 form 1040

[veritas]

https://www.google.com/amp/www.latimes.com/business/hiltzik/la-fi-hiltzik-irs-obamacare-20170215-story,amp.html

[Roland Slugg]

Veritas's link is to an article in the Los Angeles Times. The headline reads: "Trump's IRS stages a stealth attack on Obamacare." Then in the first few paragraphs the columnist uses all of the following words and phrases: "undermining the Affordable Care Act," "cripple ACA," "open hostility to Obamacare," and "kicking a leg out from the regulatory stool supporting the act."

Aahhh, isn't it refreshing to read such objective, unbiased ... "reporting."

The article goes on to say that the IRS won't reject tax returns that don't check one of the boxes on line 61 regarding health care coverage. It had planned to reject e-filed returns on that basis but has rescinded that plan. (It wasn't clear what IRS had intended to do with paper-filed returns that didn't answer that question.) The rest of the article is actually quite forthright and factual, until you get to this: "The agency hasn’t announced its rule change publicly." Is that so? It took me about 30 seconds to find this, right on the IRS's web site, which, as far as I know, is accessible by the public:

https://www.irs.gov/affordable-care-act/individuals-and-families/individual-shared-responsibility-provision

[JohnH]

Sounds like the article or the scope of the writer's info is dated. This line 61 issue has been under discussion on this and the Unofficial ATX Forum for about a week now. (at least since Drake announced a change to their software on 2/10/17 - as far as I know they were the first to bring anyone's attention to the change in IRS position)

[FEDUKE404]

How to report ACA lack of coverage

Well, the original "news article" was from the La La Land Times

So, in all seriousness, what is TODAY'S option for line 61 and a client who did not have qualifying health care insurance for the first four months of 2016 and no exceptions apply?

(My tax software will probably have a hissy fit, and is it acceptable just to "check the box" to make the penalty go away? Sounds like not a good place for a professional tax person to be in. . .)

FE

[mactoolsix]

We are continuing as if the ruling never happened. The result of the ruling is that the IRS is taking the position (possibly early) that they will not be responsible for the "collection" of the shared responsibility payment. Well, in reality they couldn't forcibly collect it anyway.

As for the taxpayers, as of today they possibly still owe the amount whether or not they chose to pay it is their choice. My job is simply to tell them the correct amount.

[JohnH]

I haven't had one yet who was assessed the MEC penalty, but based on last years' experience I think I will see a small number of them. My only recommendation will be that they get an extension to see if there's any more clarity in the coming months. Most of them won't extend if they have a net refund after the penalty, but that really doesn't matter to me. I just want it clear that I've done my job in giving them all their options. If they choose to do something unwise, that will be their decision and they will have to accept the outcome.

There are predictions all over the place on whether there will be true penalty relief for 2016, but the fact is nobody really knows. Given the political situation, we are in uncharted territory here and it could go a number of different ways. One of those ways could be some sort of legislation that stops the penalty in its tracks as of the day of passage, but is not retroactive. I'm not going to be the preparer that failed to advise his client of the opportunity to take advantage of that situation.