TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Sunday, October 27, 2013

Rush Limbaugh’s Guide to Dodging ObamaCare Tax Penalty

Politico, Rush Limbaugh’s Guide to Dodging Obamacare Tax Penalty:

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. ...

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.

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Rush Limbaugh is under the illusion that we still live in a country under the rule of statutory law. By the time the IRS and the courts finish addressing all of these "glitches" (of timing, enforcement, not enforcement, elegibility, not elegibility, etc.) some other way will be "found" to produce the fines, scratch, the taxes in the "spirit" of what was in someone's mind at some time.

Posted by: MG | Oct 27, 2013 8:14:37 AM

Question: If a taxpayer is due a refund, and has it applied to the following year, will the IRS snatch it?

Posted by: Joe Reisman | Oct 28, 2013 5:54:37 AM