The Internal Revenue Service is scaling back new efforts to enforce Obamacare's individual mandate to buy health insurance in response to an executive order from President Trump.
The agency confirmed to the Washington Examiner that it is no longer going to reject tax forms that don't have the box checked to attest the taxpayer has health insurance. Every tax form has a box about insurance coverage that taxpayers must check, or they have to send in the individual mandate penalty or a form claiming an exemption.
The IRS previously processed returns that left the box blank. This year, however, the IRS put in a system that rejects tax returns if they don't include that information, the agency told the Washington Examiner.
The reason is an executive order issued by President Trump that directs the government to provide relief to people burdened by Obamacare.
"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," the agency said.
The lax approach to enforcing the mandate is a bad development for insurers that have clamored for the mandate to not be cut in any repeal effort by Congress.
However, the administration introduced a sweeping rule Wednesday that shortens the open enrollment period and clamps down on when people can sign up for the law year-round, a move to appease insurers.
The mandate calls for a taxpayer to have insurance or pay a fine of $695 per person and $347 per child, or 2.5 percent of yearly household income.
However, the Affordable Care Act has exemptions for people with low income.
In 2015, about 12.7 million people got an exemption from the mandate, but about 6.5 million people paid the penalty, according to an IRS report to Congress last month. That year the penalty was $325 per adult and $162.50 per family, or 2 percent of household income.
Reason magazine first reported the IRS change.