TAX ADMINISTRTAION NEWS

  1. If Only Folks Had Remained Silent on Silent Returns:

Affordable Care Act’s (ACA) is still fully in effect. The IRS’s announcement on silent returns means that they will continue to accept e-filed tax returns that are “silent” on whether or not a taxpayer was insured under employer coverage, met the personal mandate requirement or paid the personal shared responsibility payment (for the 2016 tax year- the penalty is equal to 2.5% of your adjusted gross income, or $695 per adult and $347.50 per child, up to a maximum of $2085- whichever is higher).

The agency originally intended to block these e-filed returns. However, IRS stated that the agency will continue to process these returns to minimize any burden on taxpayers (including taxpayers expecting a refund). The agency’s action appears to be consistent with President Trump’s executive order addressing the act of minimizing the economic burden of ACA’s appeal. However, IRS has indicated that should questions arise relating to a tax return, Taxpayers may receive follow-up questions and correspondence at a future date after the filing process has been completed.

In short, neither the executive order nor the IRS announcement affects the practical requirements of ACA. That will require a change of law enacted by Congress and signed by the President.

2. Of Passports and Debt Collection:

The IRS has informed us that two provisions of the EXPIRE Act will be raising their ugly heads here soon. The Department of State should be ready (the IRS is ready set to go) to enforce the new rules on revoking passports from taxpayers with “serious delinquent debt”, defined as at least $50,000 of accumulative assessed tax debts, including interest and penalties. Additionally, the taxpayer will have has to issue appropriate liens. If the taxpayer is working on an installment agreement or offer-in-compromise, it is our understanding that the IRS will not be sending those names to the Department of State. Once the taxpayer is on the passport revocation list at the State Department, to be removed taxpayers must:

  • Pay in full
  • Enter into a payment agreement
  • Win a section 6330 hearing; or
  • Win innocent spouse relief.

In April, the IRS will begin releasing inactive debts to private debt collection companies. These releases will be phased in very gradually over a six-month period. Taxpayers will receive a letter from both the IRS and the companies explained the situation. If there is a power-of-attorney on record, the practitioner will also receive the letters.