Failure To Demonstrate Insurance Coverage In 2014 Could Hinder Tax Refund
"The Internal Revenue Service won't audit you to make sure you have purchased health insurance under provisions of the new health-care law-but it may withhold your tax refund if you can't demonstrate that you are insured, an IRS official said Thursday," The Wall Street Journal reports. "There are tools we can use. We obviously will be notifying folks [for whom there is no record of health insurance] that we have these questions," Steven T. Miller, IRS deputy commissioner for services and enforcement, said during a Senate Finance Committee hearing, the Journal reported. "We have a refund offset mechanism in order to enforce that provision." Under the new health law, penalities for failure to buy health insurance would begin in 2014.
Senate Finance Committee Republicans "questioned whether the IRS will even have the ability to make sure the insurance mandate is enforced." But, as the new law is written, insurance providers will be required to provide documentation to both the taxpayer and the IRS to show that individual has coverage. "The IRS will use document matching to identify people without coverage, and will notify those taxpayers that they may owe penalties." The law does not permit the IRS to issue liens or levies for penalty collection, but Miller said it also does not stop the IRS from cutting a tax refund to obtain penalties (Vaughan, 4/15).
Related KHN Coverage: True Or False: Seven Concerns About The New Health Law (KHN Staff, 4/6)
Meanwhile, Kaiser Health News provides a touch of health policy humor with "Tax Day," a political cartoon by John Deering.This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.