February 15, 2017 / 5:31 PM / 10 months ago

U.S. tax agency backs off tougher planned Obamacare oversight

WASHINGTON (Reuters) - The U.S. Internal Revenue Service said on Wednesday it will not reject tax filings that do not indicate whether the taxpayer had health coverage or paid a penalty set under Obamacare, setting aside a tougher planned oversight of the health law.

FILE PHOTO - The federal government forms for applying for health coverage are seen at a rally held by supporters of the Affordable Care Act, widely referred to as "Obamacare", outside the Jackson-Hinds Comprehensive Health Center in Jackson, Mississippi, U.S. on October 4, 2013. REUTERS/Jonathan Bachman/File Photo

Republican President Donald Trump, who has pledged to dismantle the 2010 Affordable Care Act, signed an order on Jan. 20, his first day in office, to freeze regulations and take other steps to weaken the law, which is known as Obamacare.

Republicans, who have the majority in Congress, are trying to craft a replacement for the law enacted by former Democratic president Barack Obama.

Twenty million Americans gained health insurance under the law, whose so-called individual mandate requires Americans to carry health insurance or face a penalty.

The IRS said in a statement that in recent years, tax returns that did not include information about health coverage were processed.

That was set to change for the 2016 tax year and system changes had been put in place to reject returns lacking that information, but the agency now will continue processing returns as in previous years, it said.

Citing Trump’s executive order, the statement said the IRS would continue to allow electronic and paper returns to be accepted for processing “in instances where a taxpayer doesn’t indicate their coverage status.”

“Processing silent returns means that taxpayer returns are not systemically rejected, allowing them to be processed and minimizing burden on taxpayers, including those expecting a refund,” it said.

Republicans have opposed Obamacare as federal overreach and Tom Price, a vocal opponent of Obamacare, was sworn in last week as U.S. secretary of health.

Price, a member of the House of Representatives since 2005 who chaired the budget committee, offered legislation in 2015 to repeal Obamacare and replace it with age-adjusted tax credits for the purchase of health insurance.

Reporting by Washington Newsroom; Editing by Bill Trott

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