The Internal Revenue
Service (“IRS”) has issued an update in response to President Trump’s Executive
Order signed January 20, 2017, requiring federal agencies to exercise discretion
to minimize the regulatory burdens of the Affordable Care Act (“ACA”) on
taxpayers. In the IRS’s statement issued on February 15, 2017, they indicated that although
they are currently reviewing the January 20, 2017 Executive Order to determine the
implications, they stated that taxpayers should continue to file their tax
returns as they normally would as legislative provisions of the ACA remain in
force unless changed by Congress.
What does this mean for you?
Taxpayers remain required
to follow the law with respect to the individual shared-responsibility
provisions. The individual
shared-responsibility provisions require that each member of your family do at
least one of the following:
·
Have
qualifying health coverage called minimum essential coverage.
·
Qualify
for a health coverage exemption.
·
Make
a shared-responsibility payment with his/her federal
income tax return for the months that he/she did not have coverage or an
exemption.
Further, your
responsibility includes, but is not limited to, retaining the required
documentation under the individual mandate of the ACA to support that you, your
spouse (if filing jointly), and anyone you could or did claim as a dependent,
have maintained the minimum essential coverage for each and every month during
the tax year.
What are your options for completing your
2016 individual federal tax return?
The IRS has put
in place a system change in response to the Executive Order to help ease
the filing burden for 2016 tax returns by allowing processing of electronic and
paper tax returns even in instances where the taxpayer does not indicate their
health coverage status on line 61 of IRS Form 1040. This system change is only
designed to prevent the tax returns from being automatically rejected. Keep in
mind that this system change does not alter the underlying requirements with
respect to the individual shared-responsibility provisions imposed on
taxpayers.
We understand that there
may be confusion with respect to the ACA given the Executive Order. However, in the absence of further guidance and legislative changes,
provisions of the ACA are still in force until changed by Congress. This means
that taxpayers are still required to follow the law and pay what they owe.
Shawn M. Williams, CPA, LLC recommends to its clients that the required information related to the individual shared-responsibility provisions be included at the time the return is filed to avoid receiving follow-up correspondence and action from the IRS.
