"Alan" <
temp...@vacationmail.com> wrote in message
news:jt1u0e$pp1$1...@dont-email.me...
> On 6/25/12, the subject titled article appeared in Tax Analysts Tax Notes,
> a subscription only tax journal. The article is an analysis of the IRS
> collection process to see how the IRS could actually enforce the
> individual mandate in the health care law by collecting the penalty (or
> tax if you prefer that word). The two authors (both law professors)
> conclude that the restrictions placed on the IRS by the health care law
> make it impossible for the IRS to use the normal tools available to them
> to collect taxes and penalties. The only possible way for the IRS to
> collect the penalty is the offset (withholding all or part of any refund).
>
> I am posting this because the article contains an excellect explanation of
> the IRS collection process that any lay person could understand.
>
> The authors made the article available on the Tax Law Blog. You can find
> it here:
>
>
http://taxprof.typepad.com/files/135tn1633-1.pdf
It's an excellent explanation, but it's not geared to lay persons. It's too
long, and understanding the article means piecing all the disparate parts in
the argument together.
Can wages be garnished? They garnish wages to pay child support. I suppose
garnishing wages is a type of lien, but am not sure and am no legal expert.
The article does not contain the word "garnish".
The article says
BEGIN QUOTE page 8-9
Currently, most individual taxpayers regularly overpay their income taxes
through overwithholding, so as a practical matter, this may not be a
significant constraint.82
However, taxpayers have a significant amount of control over the payments
they make to the IRS. Thus, it would seem that a conscientious taxpayer has
the ability to avoid this enforcement tool altogether through careful tax
planning.
END QUOTE
This means taxpayers can increase their exemptions so that they owe money
with their tax return, and then they can avoid paying the penalty.
However, can a levy be imposed on the penalty+interest of the penalty? For
failure to pay there is a maximum 25% penalty plus interest.
Many taxpayers receive some credit, like the child tax credit, solar
credits, eitc, child and dependent care credit. The individual mandate
penalty will reduce these credits. Also, if they don't get credits one
year, then can get refundable/nonrefundable credits in a future year, and
the individual mandate penalty from prior years got negate these credits.