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THE IRS’S ROLE IN THE NEW HEALTH CARE LAW AND HOW IT IMPACTS YOU

The Supreme Court in its 5 to 4 ruling upheld the new law that requires most Americans to get health insurance.

 

The majority decision said that Congress has the power to enforce this requirement under its authority to impose taxes. The decision called the penalty portion of the law a tax and noted that these taxes will be collected by the IRS. Those taxpayers who don’t get qualified health insurance but will be required to pay the penalty (the tax) starting in the tax year 2014, unless they are exempt because of low income, religious beliefs, or because they are members of America Indian Tribes.

 

The penalty will be fully phased in by 2016, when it will be $695.00 for each uninsured adult or 2.5% of family income whichever is greater up to $12,500.00. The Congressional Budget Office is estimated that 4 million people will pay the penalty that year. The law does limit 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 your bank account, or garnish your wages to collect it. Of course, that’s the state of the law today. What additional penalties or abilities the IRS will receive in the future remains to be seen.

 

Len Stauffenger’s practice is limited to helping taxpayers resolve their IRS problems. For a Free consultation call him at 1-877-349-8297.