There is much discussion of the individual mandate provision in the health care bill that the House passed on Sunday. Much of that discussion centers around the legality of the provision.
The Joint Committee on Taxation explained the provision in its technical explanation publication of the bill released yesterday. There is a lot of disinformation out there regarding this provision pertaining to what the IRS would do to those who don’t purchase health insurance so here is the JCT’s explanation of the IRS’s power to enforce the penalty for not purchasing health insurance.
The penalty applies to any period the individual does not maintain minimum essential coverage and is determined monthly. The penalty is assessed through the Code and accounted for as an additional amount of Federal tax owed. However, it is not subject to the enforcement provisions of subtitle F of the Code. The use of liens and seizures otherwise authorized for collection of taxes does not apply to the collection of this penalty. Non-compliance with the personal responsibility requirement to have health coverage is not subject to criminal or civil penalties under the Code and interest does not accrue for failure to pay such assessments in a timely manner.
Footnote from JCT regarding subtitle F: IRS authority to assess and collect taxes is generally provided in subtitle F, “Procedure and Administration” in the Code. That subtitle establishes the rules governing both how taxpayers are required to report information to the IRS and pay their taxes as well as their rights. It also establishes the duties and authority of the IRS to enforce the Code, including civil and criminal penalties.
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