The National Center for Professional Education provided one of the clearest explanations regarding ACA compliance and the recent Executive Order:
The instructions for individual taxpayers involving the ACA has been to indicate on their Form 1040 filing whether they had health insurance, an exemption from coverage or made a shared responsibility payment. In recent years, tax returns silent in that regard were still processed.This year the IRS put in place system changes that would reject tax returns during processing in instances where the taxpayer didn’t provide that information.
The recent Executive Order directed federal agencies to exercise authority and discretion available to them to educe potential burden. Consistent with that, the IRS has decided to make changes that would continue to allow electronic and paper returns to be accepted for processing in instances where a taxpayer doesn’t indicate their coverage status.
However, legislative provisions of the ACA law are still in force until changed by the Congress, and taxpayer remain required to follow the law and pay what they may owe.
Processing silent returns means that taxpayer returns are not systemically rejected, allowing them to be processed and minimizing burden on taxpayers, including those expecting a refund When the IRS has questions about a tax return, taxpayers may receive follow-up questions and correspondence at a future date, after the filing process is completed.
As an #EnrolledAgent I must comply both with U.S. Treasury Circular 230 and with existing law. The recent Executive Order does not change existing law. So, while the IRS may process returns that are silent on (do not answer) the healthcare coverage question, I cannot legally file a return that does not answer the question. If I am preparing your return, I will be asking for proof of healthcare coverage for all members of the household and calculating the Shared Responsibility Payment as necessary.