Conscripted Benevolence: IRS Enforcing Obamacare’s Individual Mandate Under ‘Shared Responsibility’ Tax Payments

obamacare chart

The Internal Revenue Service published an update to its tax-season guidelines Tuesday that makes it clear the agency will be taking an Obamacare penalty from Americans’ Federal tax returns in 2015 if they don’t demonstrate proof of coverage under an eligible health plan.

That the Administration of Barack Obama, already fully involved in selectively enforcing his signature accomplishment, is moving forward with the individual mandate isn’t a surprise to anyone who’s been following Obamacare’s á la carte implementation.

But the IRS’s language in delineating its Health Care Tax Tips this week bears a sinister, groupthink Orwellian tone. As Americans for Tax Reform observed Tuesday, the agency “employs [the] Orwellian term ‘Shared Responsibility Payment’ to describe [the] Obamacare individual mandate tax.”

President Obama’s Internal Revenue Service today quietly released a series of Obamacare “Health Care Tax Tips” warning Americans that they must obtain “qualifying” health insurance — as defined by the federal government — or face a “shared responsibility payment” when filing their tax returns in 2015. The term “shared responsibility payment” refers to the Obamacare individual mandate tax, one of at least seven tax hikes in the healthcare law that directly hit families making less than $250,000 per year.

…Once fully phased in, the Obamacare individual mandate tax will rise steeply, to a maximum of 2.5 percent of Adjusted Gross Income or $2,085 — whichever is higher.

Here’s how the IRS phrases its directions for reporting proof of coverage:

4. Your 2014 tax return will ask if you had insurance coverage or qualified for an exemption. If not, you may owe a shared responsibility payment when you file in 2015.

This admonishment to help share the cost of a healthcare subsidy for which we are all responsible is preceded by three other “tips” — two of which amount to an IRS-sponsored sales pitch for Obamacare:

There are a few basic tips to keep in mind about the new health care law. Health insurance choices you make now may affect the income tax return you file in 2015.

1. Most people already have qualified health insurance coverage and will not need to do anything more than maintain qualified coverage throughout 2014.

2. If you do not have health insurance through your job or a government plan, you can buy it through the Health Insurance Marketplace.

3. If you buy your insurance through the Marketplace, you may be eligible for an advance premium tax credit to lower your out-of-pocket monthly premiums.

Elsewhere, the IRS explains the “shared responsibility” payment more fully, assuring taxpayers that the agency will not confiscate more than $285 from most families who file in 2014 for the Obamacare subsidy pool (although a few wealthy stragglers with bad financial planning skills are, in theory, exposed to “sharing” even higher amounts).

If you (or any of your dependents) do not maintain coverage and do not qualify for an exemption, you will need to make an individual shared responsibility payment with your return. In general, the payment amount is either a percentage of your income or a flat dollar amount, whichever is greater. You will owe 1/12th of the annual payment for each month you (or your dependents) do not have coverage and are not exempt. The annual payment amount for 2014 is the greater of:

  • 1 percent of your household income that is above the tax return threshold for your filing status, such as Married Filing Jointly or single, or
  • Your family’s flat dollar amount, which is $95 per adult and $47.50 per child, limited to a maximum of $285.

The individual shared responsibility payment is capped at the cost of the national average premium for the bronze level health plan available through the Marketplace in 2014. You will make the payment when you file your 2014 federal income tax return in 2015.

These tax tips apply to the 2014 calendar year, the first year the Obamacare penalty will be assessed. As noted earlier, anyone who’s not able to prove he’s covered will soon be forced to begin “sharing” much more than $285 a year — up to $2,085 per household or 2.5 percent of their adjusted income (whichever is higher) once the law is operating at full steam in 2016.

Personal Liberty

Ben Bullard

Reconciling the concept of individual sovereignty with conscientious participation in the modern American political process is a continuing preoccupation for staff writer Ben Bullard. A former community newspaper writer, Bullard has closely observed the manner in which well-meaning small-town politicians and policy makers often accept, unthinkingly, their increasingly marginal role in shaping the quality of their own lives, as well as those of the people whom they serve. He argues that American public policy is plagued by inscrutable and corrupt motives on a national scale, a fundamental problem which individuals, families and communities must strive to solve. This, he argues, can be achieved only as Americans rediscover the principal role each citizen plays in enriching the welfare of our Republic.

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