IRS agents won’t audit, impose penalties under health reform

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IRS agents will not perform audits or impose penalties on people who fail to buy health insurance, a key official in the agency told members of Congress.

Steven Miller, a deputy IRS commissioner, told a U.S. House Ways and Means subcommittee that the federal agency will not garnish wages, but will send out notices notifying Americans that if they don’t buy health insurance, starting in 2014, they could face penalties.

The Patient Protection and Affordable Care Act, the landmark health reform legislation passed in March 2010, calls for those not buying individual insurance coverage to pay the federal government either $95 or 1% of their taxable income for 2014.

“We will not use levies, liens or criminal prosecutions if taxpayers have unpaid amounts related to the individual-coverage provision,” Miller said. “There will not be revenue agents involved in this. These will not be audits.”

He said IRS auditors will compare individual tax returns with information compiled by insurers, then will send letters to taxpayers “who appear to have overpaid, underpaid and/or were not eligible for an exemption.”

Miller rejected the concern of Republicans on the committee, who said they feared a planned increase in IRS agents was designed to give the agency the staffing to force greater compliance under the health reform law.

 

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