IRS Commish - Health Insurance Mandate will be tied to Tax Refund

[thundley4]

I don't have much to add to this report from The DC except a weary "we told you so":

Individuals who don't purchase health insurance may lose their tax refunds according to IRS Commissioner Doug Shulman. After acknowledging the recently passed health-care bill limits the agency's options for enforcing the individual mandate, Shulman told reporters that the most likely way to penalize individuals that don't comply is by reducing or confiscating their tax refunds.
Speaking at the National Press Club on Monday, Shulman downplayed the IRS's role in enforcing the recent overhaul of the health insurance industry by claiming the agency would not aggressively target individuals who don't purchase coverage. He noted that the health-care bill expressly forbids the agency from freezing bank accounts, seizing assets or pursuing criminal charges, but when pressed said the IRS would most likely use tax refund offsets to penalize those that don't comply with the mandate. The IRS uses refund offsets to collect from individuals that owe the federal government a delinquent debt.

"These are not the kinds of things we send agents out about," Shulman said. "These are things where you get a letter from us. Congress was very careful to make sure there was nothing too punitive in this bill."

Many reports have claimed that enforcement of the individual mandate will be non-existent, but Shulman's answers indicate differently.

It will be interesting to see how this plays out, since countless millions of Americans look forward to their annual income tax refunds as the equivalent of a yearly bonus. Of course those who pay income tax could simply adjust their with-holdings so that there is little to refund in the first place. But the 40% or so of Americans -- most of whom are lower income -- who pay no tax, yet receive large refunds in the form of child tax credits, don't have that option. How will they will react when the government starts to delay or reduce the amount of their refunds?

Wizbang

I'll bet they don't go after those getting EITC refunds.

[IassaFTots]

Wizbang

I'll bet they don't go after those getting EITC refunds.

Well, that isn't shocking.  Weren't we just discussing this very thing last week?

[Thor]

What this will cause is that people won't be "loaning" the Government any money. Instead, when people file, they will owe the Govt some instead of getting back refunds. This COULD wreak havoc with the Government's bank account.  The law of unintended consequences. Already, I have little or nothing held out of my pay. I give the Govt as little as possible.

[JohnnyReb]

Hell hath no fury like a welfare Queen deprived of her annual tax refund welfare bonus check.

  ....oh this could be good.

[DumbAss Tanker]

Currently they'll snarf up tax refund checks for any kind of debt to the Government that's been correctly processed to the IRS, I'm pretty sure they don't make any distinction in favor of EITC on it, so at least the EITC-eligibles shouldn't be double-dipping in the public trough on that one.

[rich_t]

What this will cause is that people won't be "loaning" the Government any money. Instead, when people file, they will owe the Govt some instead of getting back refunds. This COULD wreak havoc with the Government's bank account.  The law of unintended consequences. Already, I have little or nothing held out of my pay. I give the Govt as little as possible.

Amen.

I work hard to keep my refund as low as possible if any.

I don't like giving out interest free loans to the government.