CPA received notice today from the IRS regarding President Trump’s Executive Order dated January 20, 2017. The IRS places CPA on notice that it has announced that it will no longer require taxpayers to fill out the Obamacare line 61 on tax forms that ask whether taxpayers had health insurance throughout the year, and penalizes them if they did not. The line was added to enforce the individual mandate.
Under the healthcare law, the IRS would reject tax returns if taxpayers didn’t have insurance unless they were exempt. If the line was left empty on their tax return, it was labeled a “silent return” and rejected. The agency now says that it will process returns regardless of the health insurance line.
As a CPA I have to point out that the legislative provisions of the ACA law are still in force until changed by the Congress, and taxpayers remain required to follow the law and pay what they may owe.
Processing silent returns mean that taxpayer returns are not systemically rejected by the IRS at the time of filing, allowing the returns to be processed and minimizing the burden on taxpayers, including those expecting a refund. When the IRS has questions about a tax return, taxpayers may receive follow-up questions and correspondence at a future date, after the filing process is completed. This is similar to how the IRS handled this in previous years, and this reflects the normal IRS post-filing compliance procedures that we follow.
IRS Extends Due Date for Employers and Providers to Issue Health Coverage Forms to Individuals
On November 18, 2016, the IRS extended the 2017 due date for providing 2016 health coverage information forms to individuals. Insurers, self-insuring employers, other coverage providers, and applicable large employers now have until March 2, 2017, to provide Forms 1095-B or 1095-C to individuals, which is a 30-day extension from the original due date of January 31.
The due dates for filing 2016 information returns with the IRS remain unchanged for 2017. The 2017 due dates are February 28 for paper filers and March 31 for electronic filers.
Due to these extensions, individuals may not receive Forms 1095-B or 1095-C by the time they are ready to file their 2016 individual income tax return. While the information on these forms may assist in preparing a return, the forms are not required to file. Your CPA can prepare and file their returns using other information about their health insurance and do not have to wait for Forms 1095-B or 1095-C to file.