Conservative commentator Rush Limbaugh says he’s discovered a sure-fire way to skirt Obamacare’s penalties for failing to obtain health coverage next year – but you’d have to give up a fat tax refund.
The fine for failing to obtain insurance under the so-called “individual mandate,” which starts at $95 or one percent of taxable income next year, will automatically be collected by the IRS from tax refunds. But if you make sure you don’t get a refund, the agency won’t be able to collect the penalty, Limbaugh told listeners.
“[I]f you structure your taxes so that you do not get a refund, you do not have to buy insurance and you do not have to pay a fine ‘cause they can’t collect it from you if you don’t have a refund due — and that is just another nail in the coffin of Obamacare imploding on itself,” Limbaugh said on his show Thursday night, according to a transcript.
Problems have plagued the website for individuals to sign up for coverage since it went live on Oct. 1 , a controversy now consuming Obama administration officials.
Experts say Limbaugh is correct on one point: The IRS lacks teeth in enforcing the individual mandate. The Affordable Care Act prohibits it from using liens or levies to collect the penalties, tools the agency regularly employs to collect other unpaid taxes. Nor can it criminally prosecute anyone for failing to pay up.
“One would need to make sure that he/she is not due a refund … [T]he point Limbaugh makes about refund filers, while a bit coarse, is true,” said Robert Kerr, senior director of government relations at the National Association of Enrolled Agents.
But the fines can build up, with interest, so ignoring the penalties could come back to haunt negligent taxpayers, some experts said.
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