The Treasury Department has now weighed in amid conservative media titan Matt Drudge’s claims that he recently paid the Obamacare penalty he dubbed a “liberty tax.”
In summary, Drudge apparently volunteered to fork over money to the IRS far earlier than he needed to. And he did it before the rules for doing so were final. TPM reported on Friday that was one of the possibilities from the facts Drudge laid out last week.
The department confirmed to TPM on Monday that instructions to pay the individual mandate penalty are still forthcoming. The IRS is still working on proposed regulations. On top of that, Treasury said that Americans who file quarterly estimated taxes — as Drudge said he did — are not required to include payments for the penalty.
That means Drudge likely gave the IRS an amount of money, which he has described as his penalty, but which he lacked the full information to pay.
And in a twist on Monday night, the IRS released a new explainer with some examples for calculating the penalty — three days after Drudge said he paid it.
The questions about Drudge’s payment began on Friday when he tweeted: “Just paid the Obamacare penalty for not ‘getting covered’… I’M CALLING IT A LIBERTY TAX!”
The problem was that the penalty under Obamacare for going without health insurance in 2014 will not be due until 2015.
In his subsequent tweets explaining the discrepancy, Drudge indicated that he made the payment as part of a 2014 quarterly estimated tax filing, which people who are self-employed or run small businesses generally make. Drudge implied he’d included extra money in that filing to cover the mandate penalty.
Drudge was under no obligation to pay the penalty in that filing. The deadline to sign up for health coverage and avoid the penalty, March 31, hasn’t even passed — though Drudge has sworn to opt out of Obamacare for life.
In an email to TPM on Monday, Drudge pointed to the worksheet for estimated tax filings published by the IRS. He said he interpreted a line in the worksheet, which says that those filing “may want to consider” the penalty when estimating taxes, as a recommendation to pay it.
The worksheet instructed: “When you file your 2014 tax return in 2015, you will need to … make a payment if you do not have coverage.” It provided no explanation for calculating the penalty. On Monday, the Treasury Department told TPM that those instructions were still forthcoming. The department also said Americans making the estimated tax payments were not required to include in in the quarterly filings.
“Who said anything about ‘required’ ??,” Drudge told TPM in an email. “IRS tax forms recommend you begin paying the tax in estimates for 2014, which is what I did. I will not be getting Obamacare.”
So Drudge doesn’t appear to have been fibbing about paying what he described as the penalty, which TPM openly wondered about on Friday. Instead he did something perhaps more inexplicable: voluntarily handing over money to the IRS when he didn’t need to.
Multiple tax experts have also since explained that the estimated tax filing doesn’t even have a way to designate a specific sum as satisfying the penalty.
So as one tax expert put it to the Huffington Post: “For whatever reason, Matt Drudge has decided to give the government an interest-free loan.”