[SES1066]

Actually as long as they do not have a tax refund coming, they do not even have to pay the penalty.

I do not think that this is correct. As a seasonal paid tax preparer, we are seeing guidance that taxpayers, lacking proof of coverage, will have the penalty added to their 'tax burden' like early withdrawls from a TIRA and the 'SE' tax. So the computation of penalty will be done in the tax season of 2015 for failure to carry insurance in all of 2014 regardless of refund or balance due status.

I believe that this is similar to the current Massachusetts "RomneyCare" setup but obviously the bells and whistles of the IRS still are being built as we speak. I will note that I am seeing many employers and payroll companies (like ADP) already putting the "DD" line indicator for health insurance coverage on this year's W2s. Precursor to the nightmare to come!

[microgood]

I do not think that this is correct. As a seasonal paid tax preparer, we are seeing guidance that taxpayers, lacking proof of coverage, will have the penalty added to their 'tax burden' like early withdrawls from a TIRA and the 'SE' tax. So the computation of penalty will be done in the tax season of 2015 for failure to carry insurance in all of 2014 regardless of refund or balance due status.

It would not surprise me if the IRS tries to collect it like other taxes because they routinely ignore laws passed by Congress. But according to ACA, they cannot put a lien on you or take any criminal action against you for the ACA penalty. They can only get it from a refund due to you. What the IRS often does is what they want until someone actually sues them to change their behavior.

Another example of the ignoring ACA is that for states not implementing the exchanges and forcing the Feds to do it for them, the subsidies provided for those with lower incomes are not allowed - it is only allowed for the states the implement the exchanges. The IRS, however, is going to allow the subsidies in these cases as well until they are sued and told they cannot.