IRS can't force Obamacare Tax

If people decide not to buy the medical coverage the government thinks they should have, there is not much the government can do about it

The law...severely limits the ability of the IRS to collect the penalties. There are no civil or criminal penalties for refusing to pay it and the IRS cannot seize bank accounts or dock wages to collect it. No interest accumulates for unpaid penalties.

So how can the IRS enforce the mandate? Scary letters and threats to withhold tax refunds.

The law allows the IRS to withhold tax refunds to collect the penalty, and most filers get refunds. This year, 77 percent of the 135 million individual income tax returns processed by the IRS qualified for a refund. The average refund: $2,707.

For those who don’t qualify for a refund, a stern letter from the IRS can be effective, even if it doesn’t come with the threat of civil or criminal penalties, said Elizabeth Maresca, a former IRS trial attorney who supervises the Tax & Consumer Litigation Clinic at the Fordham University law school.

"Most people pay because they're scared, and I don't think that's going to change," Maresca said.

It should, once word gets out that the IRS is essentially powerless to collect this penalty/tax. People can even stop the IRS from taking the money out of their refunds by the simple expedient of changing their withholding so that they come out even (or owe a little) at the end of the year


http://m.reason.com/...dqfvjp19f59fdv4

If people decide not to buy the medical coverage the government thinks they should have, there is not much the government can do about it

The law...severely limits the ability of the IRS to collect the penalties. There are no civil or criminal penalties for refusing to pay it and the IRS cannot seize bank accounts or dock wages to collect it. No interest accumulates for unpaid penalties.

So how can the IRS enforce the mandate? Scary letters and threats to withhold tax refunds.

The law allows the IRS to withhold tax refunds to collect the penalty, and most filers get refunds. This year, 77 percent of the 135 million individual income tax returns processed by the IRS qualified for a refund. The average refund: $2,707.

For those who don't qualify for a refund, a stern letter from the IRS can be effective, even if it doesn't come with the threat of civil or criminal penalties, said Elizabeth Maresca, a former IRS trial attorney who supervises the Tax & Consumer Litigation Clinic at the Fordham University law school.

"Most people pay because they're scared, and I don't think that's going to change," Maresca said.

It should, once word gets out that the IRS is essentially powerless to collect this penalty/tax. People can even stop the IRS from taking the money out of their refunds by the simple expedient of changing their withholding so that they come out even (or owe a little) at the end of the year


http://m.reason.com/...dqfvjp19f59fdv4

I've heard this before and it raises three questions that I have not found the answer to:

1 - If the tax is paid where does that money go? In principal it should go to the insurance companies because they ideally need 100% participation to provide the required policies to everybody. If some do not participate then the premium income that they need to cover claims for the insured will be inadequate. In that case insurance companies will probably get out of the business leaving the door open for a single payer plan which might be the "ultimate" plan. However, if the tax monies do not go to the insurance companies will they go back into the general fund for Congress to play with which is arguably problematic?

2 - What happens if a business does not want to cover its employees? There is a tax associated with that decision. In this case, are the rules defining allowed IRS actions the same as for individuals or are they different? If they are the same I suspect that the number of employers who drop insurance coverage would be considerably greater than currently projected.

3 - Was this "loophole" a screw up due to nobody having the time or patience to read the bill or was it purposely incorporated into the bill?

Edited by colion, 22 July 2012 - 10:46 AM.

2,700 pages of broad outline. Now we see that for every two to three pages of generalizations, ten to twenty more are being created to spell out details and regulations.

We certainly do need healthcare reform which will work towards reducing costs, not increase them. My employee healthcare insurance contributions have jumped to 5 times (400% increase) in 14 years. That is way above CPI, average raises, etc.

That doesn't sound right to me. When you do your taxes you come up to a total due. I'm guessing it would included the penalty and your other taxes. So, a person owes $X for both and that is what the IRS wants to collect. If you pay $X-penalty I think the IRS will see you owe $Y dollars not identified as the penalty.

That doesn't sound right to me.

When you do your taxes you come up to a total due. I'm guessing it would included the penalty and your other taxes. So, a person owes $X for both and that is what the IRS wants to collect.

If you pay $X-penalty I think the IRS will see you owe $Y dollars not identified as the penalty.

Google away and you will find numerous links to discussions about the fact that the IRS is not empowered under the law, in contrast to income tax, to enforce tax payments except by withholding tax refunds (so don't be dumb enough to overpay estimated tax). So why are we spending hundreds of millions to hire thousands to IRS agents to enforce Obamacare tax when it cannot be enforced? Just one of the neat things that Pelosi referred to when she said that we had to pass the bill in order to find out what was in it.

The law provides 15000 new irs agents. Even worse when they retire they then have 30000 on the payroll. Each dollar printed, about $.05 enters the economy. To pay these people one dollar they have to print $20, go from there. Your looking at 3B annual waste on salary and could be 20 times that on the negative money multiplier and the fact that is borrowed money against citizen's SS# account, never paid. On the back of the IRS lien document it starts on section , section A) is missing. Go to the statue and look up section A) it states that it applies to foreign entities only. People taking these laws into court are getting life sentences. A judge wrote the opinion that they are not administering law any longer they are administering public policy. IRS is setup to operate outside of law, there is a much more sinister plan for these IRS agents than to terrorise people with no income who cannot pay penalty now renamed tax. At 222B unfunded liability, about 3/4 B per capita, 1.7B per employed individual, CBO says obamacare adds 11T unfunded in first year alone, but they need 15000 IRS agents 3B to lose 11T in the first year. They just want you dead. A English doctor says they have already euthenized 130,000 elderly there.