The Punishment for Ignoring Obamacare Penalty Might Surprise You

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Now that April 15th is on the horizon, many taxpayers are bracing themselves for the inevitable penalty that will hit them if they don’t sign up for Obamacare. It’s estimated that at least 3 million households may have to pony up 1% of their income, or $95 per adult, if they don’t have insurance; a number which is poised to expand to 2.5% for the 2016 tax year.

However, for all its bluster and intimidating language, the Affordable Care Act might not have any teeth. Recently, a tax expert writing for Forbes noticed that Obamacare, while far-reaching and burdensome in terms of what it demands from the American people, offers little to no repercussion for anyone who would be tempted to avoid it.

It seems that when the bill was first being drafted and it came time to outline the penalties for failing to comply, somebody got cold feet.

Nobody has a clue what’s really going to happen. You see, when the Act became news in 2010, rumors were flying about what would happen if you didn’t pay the penalty. It was politically tricky. The consequences needed to be enough to make you want to conform with the Act but not so onerous that Congress would be loathe to vote for it.

The final language in the Act declared that the penalty “shall be paid upon notice and demand” which sounds really intimidating. The language went on to note that the penalty would be “collected in the same manner as an assessable penalty under subchapter B of chapter 68″ which also sounds pretty serious – especially since subchapter B references some pretty nasty penalties for otherwise not complying with other sections of the Tax Code.

So what would the penalty for noncompliance be? Jail time? Nope. The language in the Act specifically rules out jail time, saying at Section 500A(g)(2)(A):

“In the case of any failure by a taxpayer to timely pay any penalty imposed by this section, such taxpayer shall not be subject to any criminal prosecution or penalty with respect to such failure.”

Well that’s good news for anyone who wants to take a principled stand against Obamacare. At least you won’t be thrown in jail, though I’m sure there will still be some horrendous consequences for noncompliance, right?

Nope. That’s not allowed under the Act. At 500A(g)(2)(B)(i), the Treasury cannot “file notice of lien with respect to any property of a taxpayer by reason of any failure to pay the penalty imposed by this section.”

So, no liens.

Then, clearly there will be levies or seizures on your wages and account, right?

Nope. Not that either. Under 500A(g)(2)(B)(ii), the Treasury cannot “levy on any such property with respect to such failure.”

To recap then, by law, you have to pay the penalty. But if you don’t, you won’t go to jail, you won’t be liened and you won’t be levied for collection.

Well that’s interesting to say the least. The author found that the only thing that the IRS can do to you, is seize part of your tax refund, should you refuse to comply. And even then, it’s hard to say what they’re planning to do. The IRS has only said that they have the ability to garnish your refund. They’ve yet to say whether or not they’ll go through with it (garnishing a refund is easy enough though, so I assume they will).

Now I’m no tax expert, so I’m reluctant to offer this article up as “advice.” For this year, it may be wise to pay up, just to be safe. But obviously there will be plenty of people who won’t pay. If they don’t face repercussions, they may be unwittingly paving the way for a massive noncompliance movement.

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Contributed by Joshua Krause of The Daily Sheeple.

Joshua Krause is a reporter, writer and researcher at The Daily Sheeple. He was born and raised in the Bay Area and is a freelance writer and author. You can follow Joshua’s reports at Facebook or on his personal Twitter. Joshua’s website is Strange Danger .

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  • CharlesH

    We’ll see if we have a non-violent revolution coming to a family near you.

    • Why would we have one now if there hasn’t been sufficient outrage to cause one by now? Written dissent can now be considered to be the act of a domestic terrorist, subjecting oneself to the benefits of the NDAA.

    • Cranky Steven

      Non-violence through non-compliance. Think Gandhi.

  • i won’t even remotely consider discharging the false debt created by a corporate fool of USA INC, unlawfully created in the Act of 1871

    • They aren’t considering it discharging, not understanding debt…

  • Sir TuberKopf

    I suspect many of the people who can’t afford healthcare would likely be getting tax refunds, the penalty would just be deducted from refunds.

    Avoiding payment would also entail avoiding refunds.

    • Mike

      All you have to do to nullify that is zero out your w4 so you owe no taxes and get no refund. It takes a little while to get it right, but once you get it done, send a letter in with the next tax return that tells them to kiss you butt where the kill ya care act is concerned.

  • MW Hohimer

    So simple solution. Make sure you break even on your taxes. Then you can tell them to go F off.

    • Until the year comes when you don’t, if you are going to play their game. The only way to win is to not play the game.

  • Hammerun

    If you dont want to pay the penalty that wont be a problem for them.
    Do you remember them wanting to get all medical records in digital form? Guess what else is going to be digitized. No It wont be “death panels” but if you didn’t buy your mandatory obamacare, you won’t receive any obamacare.

    • That would be a benefit in itself, but if you are brought into an emergency room unconscious, by law, you will be assessed, and if you have any wounds, you’ll probably get a tetanus shot before you gain consciousness, just so they can prove they exercised due diligence.

      • Hammerun

        Theoretically for years the “poor” have had a kindaform of obamacare anyway.
        If you are hurt and have no insurance and you go to the hospital there is a series of programs available the you to get treatment and have the bill paid. The trick is you can only get it at county hospitals. A private hospital will just do a minor stabilize and shove you in a ambulance and off you go. Medicade, medical, medicare, they’ll pick up the bill. What obamacare has done is shifted the load from the latter three and gave users an obamacard and a subsidy. If you pay $100 a month and receive a subsidy, what kind of “insurance” is that?? I and my wife’s Blue Shield runs $16K annually and its a 80/20. There is people here that under no circumstances will ever buy this crap and will never comply and they will be denied any treatment.
        If you think this is extreme, it happens today, right now. Hospitals will not touch you if they don’t have confirmed payment info. They will not put themselves in a liability just to save you.

        • They are required, by law, to provide care to anyone whose condition is regarded as life-threatening by the charge physician. Once you can be transferred out of the ER or the ICU, as may be the case, that is when they can legally toss the hot potato. Sometimes it boils down to how many empty beds they have, because an occupied bed provides write offs that an empty one doesn’t. Those who are already social service recipients are carefully reviewed before bicycling them.

  • RebelPatriot

    Not only will I not pay the fine but I will also file a extention. It will collapse if everyone would do the same. What the author did not mention is that there are many exemptions for getting out of the fine.

    • Guest

      26 U.S. Code § 5000A – Requirement to maintain minimum essential coverage
      https://www.law.cornell.edu/uscode/text/26/5000A

      (e)Exemptions
      ….” if the applicable individual’s required contribution (determined on an annual basis) for coverage for the month exceeds 8 percent of such individual’s household income for the taxable year…”
      (2) Taxpayers with income below filing threshold
      (3)Members of Indian tribes
      (4)Incarcerated individuals
      (A)Religious conscience exemption

      I had health insurance that was rendered “invalid” by the psychotic dictator and I also will not submit to forced payments to one of the largest criminal cartels in the world, the insurance cartel..

      I like your idea of filing for an extension, it would be great to bog down the Gestapo IRS.

    • Why would overloading them with paperwork cause a collapse when they can just hire as many temporary clerks as they need?

      • RebelPatriot

        For one they don’t have the funding to hire as many people as they want and second they need the funds for the program to operate. Overloading them with paperwork is just a bonus, it’s the funds they need.

        • They have access to all of the money they need to hire all of the temporaries that are required to handle the paper avalanche. They’ve been doing it for longer than anyone has been filing. The reductions are propagandistic, to make us think they are becoming kinder and gentler.

  • evoval

    I pay taxes and therefore guilty of funding lawlessness!

  • Having recently discovered that my vandwelling lifestyle is categorized as homelessness, and that homelessness is a disqualifier for buying a health insurance policy, I am already in compliance. That said, the IRS can keep your refunds until the tax debt is paid, even if you do comply.

    • RebelPatriot

      Some of us never get refunds. When it’s all said and done we are paying over 50% without the obolacare tax.

      • If I were in a high enough tax bracket to be paying half of my income, I’d damn sure file and itemize deductions. I haven’t filed since the early 90’s, it not being worth the aggravation for the ROI in my time and effort.

  • allosaur

    The Obama Marxists cannot even run their tyranny with an ounce of brains. What a inept for stupid bunch of Commie clowns.

    • Baruch Obamawitz

      Marxists claim to increase economic equality in society, while obama has increased inequality. I think Obullshit qualifies as a fascist, not a communist.

  • Bill Kelly

    Only morons pay taxes. I don’t hold office, therefor i am exempt. I am a american not a U>S> citizen

  • Bill Kelly

    Agreed

  • Cranky Steven

    Huh?

  • varlog

    If they can’t seize your wages, how can the seize your tax return? Your tax return is overpayment of your taxes. If it is not going toward your taxes, then you overpaid and the overpayment is your wages that should be returned to you.

  • Rachel C

    it’s really about the healthcare that everyone can’t afford. we’re stuck in this limbo for those people are single and make more than the threshold to be eligible for medicaid. The matter becomes worse when employers who employ more than 50 full time employees are in a situation that is required to offer employee’s coverage but can’t afford to provide decent coverage with group plan premiums still being extremely high. We just got quoted for $400 PPO plan per individual that has a 3500 deductible for our out of state employees (apparently this is one of the cheaper plans). The minimum contribution in a group plan is 50% for employers and the remaining 50% has to be covered by the employee or 9.5% of his/her income, wherein the difference of the premium would have to be covered by the employer if the employee opts for the coverage but whose 9.5% income can’t cover his/her portion. THEN, we have situations where we have employees who are opting out of the coverage and then go to the marketplace where it’s cheaper(shittier benefits) but now are no longer eligible for the god damn subsidies that make it so cheap. THEN, it just really ultimately comes down to paying the penalty because paying the penalty is cheaper than paying the monthly insurance premium. Then, I’m like wtf because I’m an average citizen who doesn’t get in trouble with the law, pays her taxes and then i’m penalized for not taking a product that the government is trying to shove up my mouth. At the end, whats the point of paying for my taxes that I’m not going to get back when the government has no intention of returning it to me. I’m talking about real people with real jobs who make more than minimum wage but not the $100,000 income that the government assumes everyone is making to afford this type of coverage. How can you expect to live off of a $2,600 salary with student loan payments, car payments, insurance payments, rent, utilties, groceries, credit card bills, and barely enough left to do the extra things that you work to do. just an angry citizen.

  • GenEarly

    Chief Injustice John Roberts is a Traitor along with every single DemocRat and Chamberpot Repub. Got Rope? Lots of Rope!

  • bobmaginnis

    If you get health care for your family for 1% of your income, say $500 per year for a $50,000 home income, that would be a good deal, wouldn’t it? Is Obamacare going to turn you away at the hospita?

    • masterblaster

      The real problem is Insurance company mandated allowable profit margins and Big Pharma rapeing the US Citizen and the Medical AMA and Hospital Maffia that always gets above inflation increases. Thier prices need to be rolled back and frozen until the new working poor can afford the rates

  • Mike Hughes

    1. They cannot take you to court over PPACA fines because the PPACA prohibits all action other than deduction from refund.

    2. You are not arrested for failing to appear in court in a civil case. The worst that will happen is the entry of a default judgement.

  • masterblaster

    If everyone who actually works and pays the full boat cost of Obama Crud stops paying it would just disappear and real quick. Obama’s army of ILLEGALs (30 million) would try to revolt after they find out they have no more freebees. Walmart’s army of low paid serfs receiving welfare assistance and free OBAMA Crud would Revolt. Us real AMERICANS could just sit back and watch the DEMOCRAT EMPIRE BURN TO THE GROUND