GOP targets IRS in latest health battle

Lawmakers say they aren’t sure the IRS can handle the increased workload it will have if healthcare reform becomes law.

The IRS would be charged with administering and collecting penalties on taxpayers who do not buy health insurance, but many think the understaffed agency will have big problems meeting that heavy mandate.

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Republicans also believe they’ve found a new line of attack on the healthcare bill Democrats hope to move through the House on Sunday.

They’re portraying the legislation as a massive expansion of the unpopular tax-collection agency that will unleash an army of new tax collectors.

“This is a vast expanse of power,” said Rep. Charles Boustany Jr. (R-La.) during a Thursday call organized by Republicans on the Ways and Means Committee.

He said the IRS provisions in the healthcare bill “dangerously expand, in an ominous way, the tentacles of the IRS and its reach into every American family.”

Taxpayers could be required to buy insurance under President Barack Obama’s reform proposal by 2014 or face penalties of roughly $325 per individual that the IRS would administer and collect.

That will take a lot of work for an agency that already faces huge demands.

The IRS retrieved $2.35 trillion in 2009 by processing 236 million tax returns. It also is working to reduce a $345 billion gap in the taxes it collects and should collect.

The IRS is also doing this work on a computer system that officials say is in desperate need of modernization.

Assuming the healthcare legislation becomes law, the Congressional Budget Office expects the IRS will need roughly $10 billion over the next 10 years to meet its new responsibilities.

Democrats acknowledge the subject must be looked at before 2014.

“It is something that will have to be examined,” said Rep. Richard Neal (Mass.), the senior Democrat on the House Ways and Means Subcommittee on Select Revenue Measures.

National Treasury Employee Union (NTEU) President Colleen Kelly has called for increased funds if the healthcare mandate becomes law.

“Should the IRS be given additional responsibilities under health reform legislation, NTEU would advocate for adequate resources and staffing to handle any new increased responsibilities,” she told The Hill in a statement.  

“IRS employees did an exemplary job handling additional work that was associated with the stimulus legislation,” she added.

Rep. John Lewis (D-Ga.), chairman of the Ways and Means Oversight subcommittee, which has jurisdiction over the IRS, agrees with Kelly.

“When the bill is passed, we’re going to have the [IRS] commissioner for a hearing,” he told The Hill. “If they need more resources in terms of personnel and funding, we will be prepared to make it available.”

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Lewis has invited IRS Commissioner Doug Shulman to discuss IRS operations on Mar.  25.

Sen. Chuck Grassley (R-Iowa) has raised questions over whether the IRS can fulfill its new duties.

Grassley recently used a report from the National Taxpayer Advocate, the IRS’s official watchdog, to highlight the risk of giving the IRS authority over the healthcare mandate.

“The advocate says if the burden of administering new such programs is ‘excessive, it could impair the IRS’s ability to deliver on its core tax-collection mission,’ ” he said in prepared remarks.

“[The advocate] goes on to say, ‘Implementing these provisions without adequate notice and resources will strain IRS systems and will likely lead the agency to divert resources from its core functions.’

Other Republicans have questioned whether it is good policy to have the IRS collect more personal information about taxpayers.

At a hearing earlier this week, Boustany said giving the IRS authority over the healthcare mandate could be a catastrophe waiting to happen. 

“This is an unprecedented new role for the IRS — one that will inject the IRS even further into the personal lives of American families,” he said in prepared remarks.

A recent report from the Treasury Inspector General for Tax Administration (TIGTA) stated the IRS “needs to do a better job of ensuring that sensitive personal and financial information provided by more than 130 million taxpayers is adequately protected.”

But some lawmakers say these worries are misplaced.

“There is all kinds of information that is collected on tax forms,” Rep. Anthony Weiner (D-N.Y.) told The Hill. “I don’t expect people to go out and be doing widespread audits on that [healthcare mandate] any more that I expect them to go out and see how many dependents you have.”


Vicki Needham contributed to this story.