IRS May Withhold Tax Refunds to Enforce Health-Care Law

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[From the Wall Street Journal Online]

MARTIN VAUGHAN

WASHINGTON?The Internal Revenue Service won't audit you to make sure you have purchased health insurance under provisions of the new health-care law?but it may withhold your tax refund if you can't demonstrate that you are insured, an IRS official said Thursday.

Steven T. Miller, IRS Deputy Commissioner for Services and Enforcement, made the comments during a hearing of the Senate Finance Committee. He echoed earlier comments by IRS Commissioner Doug Shulman that questions about health coverage won't in and of themselves lead to an IRS audit.

"There are tools we can use. We obviously will be notifying folks [for whom there is no record of health insurance] that we have these questions," said Mr. Miller. "We have a refund offset mechanism in order to enforce that provision."

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http://online.wsj.com/article/SB10001424052702304510004575186082454662468.html?mod=dist_smartbrief

 

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Re: IRS May Withhold Tax Refunds to Enforce Health-Care Law

From Post #1:

Under the new law, insurance providers will be required to provide a 1099 information return to the taxpayer and the IRS demonstrating that the individual is covered. The IRS will use document matching to identify people without coverage, and will notify those taxpayers that they may owe penalties.



The law doesn't authorize the IRS to impose liens or levies to collect the penalties. But it doesn't prevent the IRS from reducing a tax refund to collect the penalty, Mr. Miller said.