IRS to Block/Suspend Some 2017 Tax Returns

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The IRS says that it will block or suspend processing of 2017 income tax returns that do not comply with the Affordable Care Act (Obamacare) rules requiring filers to disclose their health insurance status.

The new move to tighten Americans’ compliance with the Affordable Care Act comes even as the Trump administration takes steps to undercut it.

“Taxpayers remain obligated to follow the law and pay what they may owe at the point of filing,” the IRS said in a description of the new policy.

The ACA requires most people to have some form of health insurance coverage or pay a tax penalty. The penalty is the higher of 2.5 percent of adjusted gross income or $695 per adult and $347.50 per child under age 18.

The IRS, in an online notification to tax professionals, said that in the upcoming tax filing season “the IRS will not accept electronically filed tax returns where the taxpayer does not address the health coverage requirements of the Affordable Care Act.”

“Returns filed on paper that do not address the health coverage requirements may be suspended pending the receipt of additional information and any refunds may be delayed,” the IRS said.

Income tax returns contain a box that asks filers if they had health coverage during the year. If they indicate they did not have coverage, filers must indicate on what grounds they are exempt from the mandate or pay the penalty for not complying.

There are several possible exemptions from the mandate, including lacking access to affordable health coverage, being homeless, getting evicted, experiencing domestic violence, experiencing the death of a family member and filing for bankruptcy.