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Tax Returns Lacking ACA Coverage will not be Rejected

March 2017

The IRS has announced that it will continue to process individual returns that do not report the taxpayer’s health coverage status under the Affordable Care Act (ACA). The IRS will accept returns that fail to indicate coverage, an exemption or a shared responsibility payment. The IRS had planned to reject these returns (known as "silent returns") this filing season after having accepted them in past years. Taxpayers may, however, be contacted later, the IRS cautioned.

The IRS left open the question of whether it would revise other aspects of ACA compliance during the balance of this filing season. The IRS announcement on processing silent returns began with the statement, without elaboration: "The IRS is currently reviewing the January 20, 2017, Executive Order on the ACA to determine the implications. Taxpayers should continue to file their tax returns as they normally would."

Executive order. Shortly after taking office, President Trump announced that it is the policy of his administration to seek "prompt repeal" of the ACA. In Executive Order 13765, the President instructed the heads of federal agencies "to waive, defer, grant exemptions from or delay the implementation of any provision or requirement of the ACA that would impose any cost, fee, tax, penalty, or regulatory burden on individuals."

Return processing. Processing silent returns means that returns are not systemically rejected by the IRS at the time of filing, allowing the returns to be processed and minimizing burden on taxpayers, including those expecting a refund,” the agency reported.

Follow-up. Taxpayers may receive follow-up questions and correspondence at a future date, about their coverage status, after the filing process is completed, the IRS reported. The IRS also emphasized that its revised treatment does not change the underlying legislative provisions of the ACA that remain in force at this time, including penalty payments, until changed by Congress.

For more information on tax return preparation, please contact our professionals at 315.701.6350.




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