Our chapter on bureaucracy notes that tax law is often a means to do things other than raise revenue. USA Today reports:
The IRS, which is in charge of enforcing compliance with the new insurance requirement, is accustomed to carrying big sticks. The first step it usually takes against tax scofflaws is to file public liens against them. Such a lien means the IRS has first dibs on any money you acquire, [legal scholar Andy] Grewal said.
"It puts a cloud over all your assets," he said. "If there's a public record that the IRS is after you, no one's going to lend you money."
That means no mortgage, no car loan, no credit cards — until you settle up with Uncle Sam.
Grewal said liens are usually enough to bring tax deadbeats to heel. If not, the IRS can seize assets, including your car or your house. And in extreme cases, if you willfully refuse to pay taxes, authorities can charge you criminally, put you on trial and send you to prison.
But when it passed the Affordable Care Act in 2010, Congress banned the IRS from using any of its usual techniques to force people to pay the penalty for failing to obtain health insurance.
Alice Helle, a Des Moines lawyer who has been working on Affordable Care Act issues, speculated that members of Congress had political motives for disarming the IRS on this issue.
"I think they thought, 'We're not going to throw people in jail or put a lien on their house for not having coverage,'" she said.
Helle doubts many Americans will decide to demonstrate displeasure with the Affordable Care Act by purposely refusing to have health insurance and then daring the IRS to try to punish them.