Hello all,
When we file a tax, we have to mentioned how many month we did or didn't have health insurance and pay penalty accordingly. How IRS come to know that if we have health insurance or not. what if we are travelling to nepal and do not have health insurance. How to mentioned that we are not in USA and didn't have health insurance. Do we have to pay penalties in this case?

They have your social security info. So everything is pulled from your number.

Non of the agency or department can pull your information from your social security unless you sign the consent form or court order. It is unconstitutional and illegal for any agency, department or administration to pull your information without your consent. If they have doubt on any information you provided, they can ask for evidence or further paper work but cannot illegal searches in your social security without letting you know and without your consent. This is American privacy Act.

What if you mentioned that you have health insurance through out the year and do not pay penalties.

You can do it. A lot of people are doing that from years. If you're lucky, if you get audited or IRS will not ask you further paperwork, you will be fine. If in case you got audited or if they request further paper work that time you have to amend the tax return and have to pay the penalty with 25% interest. I am not suggesting you to do illegal thing because there is always bad consequences when you try to do anything illegal. "Just pay the penalty and stay in the safe side" my suggestion.

Do any one know who got into audit like that. If you prove that you were not in this country, then also are we suppose to have health insurance?

IRS was not stupid when they made that stupid law. so don't try to outsmart the system.
Yes they can't pull any info without your consent but your employer can and also health insurance provider can send info to IRS.
Health insurers, employers that sponsor health plans and agencies that administer government health plans will file annual reports to the IRS about who is covered under their plans. They also provide the people they insure with documentation about the coverage.

My understanding is that , your employer will send this information just like W-2 to IRS if you have insurance or not through them.

If you are self employed, and have insurance through third party markets, they are reported accordingly to IRS.

If IRS have no information about your insurance then that might be flag for them to audit you.

Remember, now a day ( after Obama CARE), we receive another form 1095 -A/B/C for tax purpose from your employer or insurance providers that clearly tells what months you had insurance.

We (file jointly) were audited once for submitting college credits and our college didn't reported to IRS our 1098-T. The college said that they made changes and didn't report to IRS if student didn't have SSN (one of us only had ITIN). Our case was closed once we send them - transkripts, amount paid to college through our bank statements and college statements and also all book costs with itemized deskriptions. It was big hassle.

Last year 2017, we had some gaps too because of employment changes But I am planning to report IRS. I don't think it is worth it. Fines increases every year for not having insurance. But if this is 1st year with some months gaps, the fine is not going to be big.
hope this helps.
IRS have the most power to get their money that you owe.

Insurance companies or healthcare provider are required to file form 1094 (1094C for 1095C or similar) with IRS as a supplement to 1095 that you receive. S001, stop giving bogus advice man. Every slips or forms that you receive for tax filing purposes has the other side of it which you don't know that goes to IRS. For instance, W2 has W3 etc. If you don't have insurance and if your income is above the poverty guideline just pay the fine. They will eventually send you a bill anyway, and rather than having to pay interest and penalties on it just pay it now. Hope this helps.

I guess you need to have at least 9 out of 12 months with insurance. You might be fine for now but they might dig in later too. It was not insurance but one time I had received one audit for year 2012 in the year 2017 for something else.

@nayapidi I do understand insurance company and employer ( if you have health coverage from employer ) also send documents to IRS, but not all those documents are tallied because there are hundred thousands tax documents IRS receive every year. That's why they randomly select taxpayer and tally those documents, that moment if the taxpayer provided information and insurance company information does not tally, IRS will open your case and send you the bill for unpaid taxes or fine with interest or they will make you amend your previously filled tax. I wasn't telling him to do that, I was just giving him true and correct information.

If you are out of US for 330 days or more in a given year, then u don’t need to pay the fee for not having the insurance.
If you have a gap of less than 3 consecutive months without insurance, you don’t need to pay the fee.

Regarding how irs knows, like others said, health isurance companies send a copy of the proof (a form)to the person and another copy to IRS. People having insurances don’t send that form to IRS as IRS gets it directly from the insurance companies.