By Jay Heflin - 03/18/10 06:23 PM EDT
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.
They’re portraying the legislation as a massive expansion of the
unpopular tax-collection agency that will unleash an army of new tax
“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
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.”
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
“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.