Tax scams are targeting uninsured, IRS warns

PHOTOGRAPHER: COURTESY PHOTO

In some cases, the IRS says, unscrupulous tax preparers tell clients to pay the penalties directly to them, and they keep the money.

WASHINGTON — The Internal Revenue Service is warning consumers about tax scams involving the Affordable Care Act and penalties imposed under the law on people who go without health insurance.

In some cases, the agency said, unscrupulous tax preparers tell clients to pay the penalties directly to them, and they keep the money.

Most people do not owe the payment at all because they have health coverage, such as Medicaid or employer-sponsored insurance, or qualify for one of many available exemptions.

“However,” the IRS said, “if you owe a payment, remember that it should be made only with your tax return or in response to a letter from the IRS. The payment should never be made directly to an individual or return preparer.”

The creators of these schemes have been “targeting taxpayers with limited English proficiency and, in particular, those who primarily speak Spanish,” the tax agency said last week.

to a tax preparer because of their immigration status, the agency said.

The health law requires most Americans to have health insurance. For those who flout the requirement, the penalty may be $695 or more this year. For many people, the last day to sign up for insurance is Sunday, when the third annual open enrollment season ends.

Unauthorized immigrants are not required to have insurance, though they are often required to pay taxes, and many do so. “If you are not a U.S. citizen or national, and are not lawfully present in the United States,” the IRS declared, “you are exempt from the individual shared responsibility provision and do not need to make a payment.”

Ana Cecilia Lopez, a tax lawyer in Bellingham, Washington, said many tax preparers did not ask enough questions to determine their clients’ citizenship status — a crucial factor in deciding if they owe a penalty or are exempt under the Affordable Care Act.

“Some tax preparers are not asking even the most basic questions about a person’s legal status,” Lopez said. “They just ask: ‘Did you receive insurance? Did your employer give you insurance? No. Did you get health insurance on your own? No. OK, now you owe this penalty.’”

Unauthorized immigrants appear to be particularly vulnerable. They are sometimes told that they must make penalty payments directly