On behalf of Silver Tax Group posted in Back Taxes on Friday, April 7, 2017.
We don’t yet know what ultimately will happen regarding attempts to repeal the Affordable Care Act (ACA), more commonly known as Obamacare. Repealing it may prove more difficult than many of its opponents first claimed. And as of right now, it still remains intact. However, as far as taxpayers are concerned, what is important is determining how strong will be enforcement of the ACA provisions now that we have a new presidential administration. One important provision of the ACA concerns a mandatory penalty for not having health coverage.
The ACA and silent returns
At the beginning of our current tax season, President Obama was still in office. During this time period, the IRS was rejecting “silent returns.” A silent return is one where taxpayers failed to confirm the existence of health insurance coverage. However, since President Trump has taken office, agencies have eased the burden of ACA compliance.
Whether one supports or opposes repeal of the ACA, many individuals have chosen to pay the penalty for not having insurance rather than actually purchase health insurance. With the changing of administrations, it is possible that we will see more individuals file silent returns perhaps in hope that they will not have to pay a penalty for failing to have health insurance. In fact, two large U.S. tax preparation companies have been willing to file silent returns on behalf of their clients.
Still, there are potential dangers of filing silent returns. A silent return could bring unwanted attention on oneself and ultimately result in a possible tax audit. An audit could open you up to additional fines and penalties.
What should you do?
Michigan taxpayers cope with these and many other questions every year when filing tax returns. Individuals on a tight budget may wish to try out various tax schemes in hopes of saving money. But because of the potential consequences, it is always a good idea to seek the advice of professionals regarding the best road to take.