Compliance Update IRS Accepting Tax Returns Without Indication of Health Insurance

February 20, 2017

The IRS has announced that it will continue to process tax filings of individuals whose returns do not indicate whether they have maintained health insurance as required under the Affordable Care Act (ACA). The announcement is in direct response to the President’s January executive order to ease the ACA’s economic and regulatory burdens.

In recent years, individuals were instructed to check a box on line 61 of Form 1040 if they had health insurance all year. Those who did not were instructed to attach an exemption form (Form 8965) or make a shared responsibility payment. Some taxpayers did not check the box on line 61 or include an exemption form. These “silent returns” were still processed and individuals could claim any refund to which they were entitled.

Prior to the issuance of the President’s order, the IRS had put in place system changes to reject silent returns starting with those filed for calendar year 2016; however, in furtherance of the President’s order the IRS will continue to process silent returns and provide any refunds due.

The fact that silent returns will not be systematically rejected at the time of filing allows them to be processed and minimizes the burden on taxpayers, including those expecting refunds. That said, taxpayers are still required to make an individual shared responsibility payment, if applicable. The announcement emphasized that the individual mandate is still in effect and subject to enforcement until changed by Congress. If the IRS has questions about a tax return, taxpayers may receive correspondence at a future date or they may experience collection activity.