IRS Will Continue to Accept Individual Tax Returns “Silent” on ACA

JESS LEDONNE

Becoming the first agency to take action in response to President Trump’s Executive Order directing federal agencies “minimize…the economic and regulatory burdens of the Act”, the IRS has told tax preparers that it will not automatically reject individual returns that do not state whether or not the filer had health coverage.

Although at first blush accepting these such “silent” returns would appear to be a loosening of the enforcement of the ACA’s individual mandate, this is not actually a change in policy as the agency accepted and processed over 4 million silent returns last year.

The information, coming in an email correspondence and not formal rule or release, stated that the IRS would “continue to allow electronic and paper returns to be accepted for processing in instances where a taxpayer doesn’t indicate their coverage status.” The email went on to confirm that this did not impact taxpayers’ responsibility to obtain health insurance or to pay a penalty, even reiterating that the ACA is “still in force” and that “taxpayers remain required to follow the law and pay what they may owe.” Therefore, although these silent returns won’t be automatically rejected, they may eventually lead to questions, audits, or eventual penalties.

Ultimately, experts seem to agree that the decision to continue to accept returns with no health coverage information will not have much of an impact on the ACA’s individual mandate requirements, but rather is the IRS confirming that they will continue to do what they’ve previously done.