The future of the Affordable Care Act and what changes will be made by the new administration are still uncertain. But on January 20, 2017, President Trump released an executive order directing federal agencies to reduce the financial burden on taxpayers of complying with the ACA Individual Mandate. Many are left wondering what this means exactly.

Silent Returns

This was to be the first year the IRS would begin rejecting tax returns in instances where a taxpayer did not provide “essential minimum coverage” information on their return, also known as a “silent return.” But in response to the new executive order, the IRS has decided to continue to allow electronic and paper returns to be accepted for processing when a taxpayer does not indicate their coverage status. These silent returns will not be systemically rejected by the IRS at the time of filing, which meets the executive order by allowing returns to be processed and minimizing the burden on taxpayers, including those expecting a refund.

Penalties Applied After Filing

In short, this means taxpayers have the option to submit a silent return (by not disclosing their health insurance coverage information) and still receive a refund, if applicable. However, it also means they may possibly have a penalty applied to them at some point after filing. The IRS is reminding taxpayers that the ACA is the law and taxpayers are still required to follow it and pay any ACA penalties they may owe for not maintaining health insurance coverage during 2016.

Follow-Up Questions

If the IRS has any questions regarding a silent return, a taxpayer may receive follow-up questions and correspondence at a future date after the filing process has been completed. As in previous years, this situation will be handled during the IRS’ normal post-filing compliance procedures.

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