GOP: 80 million hours will be lost to health tax filing requirements

Congressional Republicans hammered the tax provisions of President Obama's healthcare law on Tuesday, saying compliance requirements will be a "quagmire" that will consume 80 million hours of taxpayers' time.

The tax attack is the latest front in Republicans' three-year assault on Obama's healthcare plan. It came to the forefront in July, after the Supreme Court upheld the healthcare law as a use of Congress's taxing power.

The attack didn't get much attention in August, while Congress was in recess and Mitt Romney's presidential campaign focused on Medicare, but Republicans on Tuesday quickly picked up where they left off before recess. They pressed the IRS with charges of political interference and decrying new requirements for taxpayers and businesses.

Ways and Means Committee leaders said individuals and businesses will spend nearly 80 million hours complying with the law's new mandates and tax filing requirements. 

By far the biggest piece of that total — 40 million hours — is related to new tax credits that help small businesses pay for their healthcare coverage. Republicans said the time requirements are based on IRS estimates for each regulation.

The overall effect, the GOP says, will be confusing and burdensome.

Former IRS Commissioner Fred Goldberg, who led the tax agency under the George H.W. Bush administration, said the Affordable Care Act puts tax responsibilities in the wrong place.

"I believe the ACA in its current form will be a needless administrative and compliance quagmire for millions of Americans and that the ACA's powerful financial incentives will lead to significant unintended consequences that policy makers very much want to avoid," Goldberg said at a hearing of the Ways and Means Oversight subcommittee.

Goldberg said newly created insurance exchanges should not be responsible for determining the size of subsidies to help purchase insurance.

The ACA sets up insurance exchanges in each state and authorizes a federal fallback in states that don't establish their own. Individuals and small businesses will use the exchanges to shop for plans that meet certain federal requirements, and most people who buy coverage that way will be eligible for a subsidy.

Republicans, though, say the IRS violated the text of the ACA by saying it will make subsidies available in both state-based exchanges and the federal fallback.

The statute refers to exchanges "established by the state," but the IRS says Congress clearly intended for exchanges to function the same way in every state and did not want to deny subsidies to millions of people based on their states' political choices.

Republicans have questioned whether the White House pushed the IRS to take that interpretation, but the agency has stood by its interpretation.

Steven Miller, the IRS's deputy commissioner for services and enforcement, said at Tuesday's hearing that the IRS was not swayed by politics.

"The decision ... was made by our counsel's office at the IRS, and we believe it's the correct legal interpretation," Miller said.