IRS Will Not Waive Penalities for Individual and Employer Mandates Under ACA

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DONT MESS WITH THE IRS WHEN IT COMES TO THE INDIVIDUAL MANDATE

In a series of information letters, the IRS indicates that it won't waive individual and employer mandate penalties under the Affordable Care Act (ACA) despite President Trump's Jan. 20 executive order directing agencies to reduce potential burdens imposed by the law.

These letters were created in response to questions from individual taxpayers. Please remember that these letters can only be relied on by the taxpayer to whom they are issued, but are a good indication of the IRS’ position on particular issues.

EMPLOYER MANDATE: In Information Letters 2017-010 and 2017-0013, the IRS explains that nothing in the ACA allows the agency to waive employer shared-responsibility payments; taxpayers remain subject to the law and must pay what they owe.  The letters emphasize that no waivers are available under the law, including for financial or religious reasons.

They also note that the executive order directing agency heads with responsibility under the ACA to minimize the law’s “unwarranted economic and regulatory burdens”  did not change the ACA, and that the ACA remains in force until changed by Congress.

The IRS expects to publish guidance describing employer assessment procedures before sending letters in 2017 to employers with potential assessment liability for 2015, according to IRS FAQs. The IRS has not yet announced when letters for 2016 assessments will be issued.

INDIVIDUAL MANDATE: In Information letter s 2017-011 and 2017-0017, the IRS addresses whether an individual taxpayer must be covered by health insurance at a certain benefit level in 2017 in order to avoid having to make a shared-responsibility payment . The letters explain that individuals who go without health coverage but don’t qualify for an ACA coverage exemption should make an individual mandate penalty payment when filing their 2017 personal tax return.

For a copies of the letters, click on the links below:

IRS Information Letter 2017-0010: https://www.irs.gov/pub/irs-wd/17-0010.pdf

IRS Information Letter 2017-0013: https://www.irs.gov/pub/irs-wd/17-0013.pdf

IRs Information Letter 2017-0011: https://www.irs.gov/pub/irs-wd/17-0011.pdf

IRS Information Letter 2017-0017: https://www.irs.gov/pub/irs-wd/17-0017.pdf

IRS FAQs: https://www.irs.gov/affordable-care-act/employers/questions-and-answers-on-employer-shared-responsibility-provisions-under-the-affordable-care-act

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