Delaware Insurance Commissioner Karen Weldin Stewart is advising consumers to beware of unscrupulous tax preparers this tax-filing season.
Stewart said Thursday that the Department of Insurance has received reports of tax preparers who are wrongly informing Delawareans without health insurance that they are subject to penalty payments under the Affordable Care Act (ACA), and that some unscrupulous preparers are actually telling clients that the payments can be paid directly to that preparer, who then pockets the money.
She said these reports follow a Jan. 26 Internal Revenue Service alert warning that preparers are targeting consumers with limited English skills, primarily Spanish speakers.
The commissioner said undocumented immigrants, who may seek legal status in the future, are particularly vulnerable to such a scam.
Stewart said that in fact, most consumers are not subject to the ACA penalty payment, also called the individual shared responsibility payment, because they have already purchased coverage, are covered through their employer or Medicaid, or qualify for an exemption. A complete list of exemptions can be found at the IRS website, at www.irs.gov/Affordable-Care-Act/Individuals-and-Families/ACA-Individual-Shared-Responsibility-Provision-Exemptions.
And for those who owe the payment but don’t pay it, the IRS will simply hold back the amount of the fee from any future tax refunds. There are no liens, levies, or criminal penalties for failing to pay the fee, according to HealthCare.gov.