IRS moves to share taxpayer information under ObamaCare

The IRS has finalized its rule for disclosing taxpayer information under provisions of ObamaCare.

The agency will share personal information such as income and tax filing status with states and other agencies to confirm whether or not people are eligible for tax credits to buy health insurance in new state-based marketplaces.

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Republicans and critics of the healthcare reform law have questioned the tax agency’s ability to effectively safeguard Americans’ personal information when it is shared with outside officials. They have worried that people could have their identities stolen or have sensitive details made public.

Critics have also pointed to recent revelations that the agency had subjected conservative groups and others to extra scrutiny.

As part of the Affordable Care Act, the IRS is required to confirm whether people are eligible to receive tax credits or other special assistance to buy health insurance. Government officials will use tax return data to check household income and make sure it matches what applicants have declared.

In a letter on Monday, Senate Minority Leader Mitch McConnell (R-Ky.) asked the Department of Health and Human Services (HHS) to delay the law because of concerns that Americans’ personal and financial data could be at risk.
 
He cited delays in assuring that "data thieves" will not be able to access an HHS-run data hub that will be used to process applications for insurance and subsidies to cover the cost. The department's current schedule calls for a final security authorization to be issued just a day before the Oct. 1 opening of the insurance exchanges.

Earlier this month, House Ways and Means Committee Chairman Dave Camp (R-Mich.) said that Americans would be at “even greater risk” of having their identities stolen thanks to the law.

Supporters of the administration have countered that the charge is just the latest in a long-running Republican attempt to discredit the healthcare law.

The IRS already shares taxpayer information with other federal agencies to determine whether Americans are eligible for programs like Medicaid. Additionally, there are legal penalties already on the books for the improper use or release of tax return information.

That should be enough to satisfy concerns about privacy, supporters have said.

Earlier this month, acting head of the IRS Danny Werfel told a House panel that the agency has "all kinds of safeguards and procedures" whenever it shares taxpayer information outside the IRS. 

Before leaving town for the August recess, the House voted to prevent the IRS from implementing any part the law. The legislation stands little chance in the Democratic-controlled Senate and President Obama has threatened to veto the bill, should it ever reach his desk.

— This story was updated at 11:48 a.m.