Posts Tagged - ‘irs’

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IRS’ Affordable Health Insurance Reform Implementation in Danger

Wednesday, October 27th, 2010

Image: numberstumper under CC 3.0

Understandably, most people aren’t huge fans of the IRS. For the most part, Americans communicate with them when they’re taking money out of their pockets during tax season. However, a provision of the new healthcare reform law has the Internal Revenue Service actually attempting to give money back!

The law is meant to make affordable health insurance more widely available through tax credits to small businesses that provide coverage to their employees. Doing so will require more manpower and resources for implementation and enforcement of the program. Some Republican candidates are considering defunding the IRS and other agencies involved to stifle healthcare reform, since it is predicted to take $5 to $10 billion for each agency to fully implement it.

Congress has the power to do so, and does not require President Obama to sign off on a repeal he would be guaranteed to veto. Ironically, one of the most business-friendly provisions may suffer as a result.

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Healthcare Reform Complicates Tax Reporting

Thursday, July 8th, 2010

As most know, the healthcare reform law includes an affordable individual health insurance mandate, intended to bring more people into the pool and make health care less expensive for all.

According to the provision, the IRS is responsible for enforcement of the medical insurance mandate. Non-exempt individuals or employers who violate it will charged penalties on their tax returns. However, there are doubts that the Internal Revenue Service is up to the task.

The requirement also creates more complications for business and nonprofit accountants when filing tax returns. In an attempt to reduce underreporting of income (which would reduce federal funding for medical insurance reform), they will now be responsible with keeping records of the 1099 forms they will have to have for all transactions over $6,000, as of 2012.

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Will Your Tax Refund Be Garnished For Health Insurance Penalties?

Thursday, April 8th, 2010

(Image: alykat under CC 3.0)

There are varying opinions regarding how the health insurance mandate will be enforced. The Internal Revenue Service is entrusted with the task. However, high-ranking IRS officials have stated that they do not intend to pursue criminal charges against those who fail to buy a health insurance plan or pay a penalty, nor will they garnish wages or seize assets. Despite accusations that they will hire several thousand new agents for enforcement purposes, the IRS denies that that will happen.

One of the tactics they are considering: taking the fine out of your annual income tax refund. The penalties, which could be up to 2% of a person’s income by 2016, would only be subtracted from refunds as a last resort, if someone fails to pay beforehand. Those with incomes which make them eligible for subsidies will receive tax credits to reduce their obligation. Critics believe that the enforcement of the individual health insurance mandate has almost no teeth. This move is an exception, but may be an unpleasant surprise to those unprepared.

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What Will Happen To You For Defying Health Insurance Mandate?

Tuesday, April 6th, 2010
(Image: mdid under CC 3.0)

One of the most controversial aspects of healthcare reform is the insurance mandate. In effect, it requires all individuals and employers to buy a health insurance plan. But what happens if a person decides not to buy health coverage?

The Internal Revenue Service will be responsible for tracking compliance; your health insurance status will be asked for in your annual tax return. They will also be responsible for levying fines, although IRS commissioner Douglas Shulman claims that the enforcement measures won’t be too punitive. Individuals will be responsible for sending the determined amount to the IRS, but they won’t face criminal charges or have their assets seized, as can be done in tax evasion.

The IRS also claims that efficient technology will prevent them from having to hire a significant amount of new employees in order to handle the issue.

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