IRS on track to enforce taxes and penalties from healthcare law

The IRS appears to be meeting the technological challenges sparked by the overhaul of the U.S. healthcare system, a new federal audit has found.

The Treasury Department’s inspector general for tax administration reports that the agency is systematically dealing with the more than 40 changes that the healthcare law, signed in March 2010, makes to the tax code.


At least eight of the modifications, which include penalties for those who do not acquire healthcare coverage and incentives for those who do, are forcing the IRS to craft entirely new processes to administer the law. In all, the overhaul contains $438 billion in new taxes and fees, the audit found. 

“The new Affordable Care Act provisions represent the largest set of tax law changes in 20 years,” Russell George, the tax administration inspector general, said in a statement. “I commend the IRS for its successful creation of a plan to implement them.”

The audit reports that the IRS, realizing the task before them, created a new office within its information technology apparatus in June 2010 to concentrate solely on the implementation of the healthcare law.

With certain planks of the overhaul going live last year, the inspector general also found that the agency moved quickly to secure staffers to deal with the many interdependent projects it takes to administer the new tax provisions.

The new law, the audit stated, required the IRS “to receive new types of data and accurately calculate the advanced premium assistance credit for individuals and the new penalty provisions affecting individuals and employers, as well as detecting fraudulent claims.”

Last summer, the IRS got the authority to hire up to 355 new employees by the end of 2010 to help implement the healthcare overhaul. And as of April, 368 agency staffers assigned to the healthcare law were working within the IRS information technology offices.

The audit did recommend that the IRS more clearly spell out procedures for dealing with unresolved issues that pop up with the healthcare law, which the agency agreed to do.