When Americans hear about the unraveling IRS scandal, they might not automatically think of their health care. But they should. The health care law was allowed to stand by the U.S. Supreme Court only because it was determined to be a tax. Enter the IRS.
The IRS now has an Affordable Care Act office, headed by the person who led the IRS’s tax-exempt office. The tax-exempt office is where targeting of non-profit groups, based on politics, took place. But the ACA office cannot actually be found on the IRS organization chart. According to one report, the office “is probably some sort of cross-divisional coordinator role within IRS. Assuming it does exist on some (non-public) detailed organizational chart, it probably consists of a handful of staff directly under the Commissioner tasked with making sure all the different parts of [the health care law] that the IRS has to implement fit together.”
The IRS’s substantial role in implementation
Doubts are growing about the IRS’s competency to implement key parts of the President’s health care law. Soon taxpayers will be subject to the agency’s dangerous and intrusive new powers:
- IRS agents verifying who purchased government approved health coverage;
- IRS taxing uninsured Americans who fail to buy government approved health coverage;
- IRS confiscating tax refunds and overpayments;
- IRS assessing interest and late payment penalties in addition to the tax levied on Americans who fail to buy government-mandated health insurance;
- IRS intensifying tax return scrutiny;
- IRS hiring an army of new agents, examiners, and support staff to investigate Americans.
Health insurance form nightmare
When applying for insurance under the President’s health care law, people will have to give even more information to the government. For single people, the form begins at five pages, and for families it starts at 12 pages. In order to see if an individual or family qualifies for tax credits, all income information will have to be released. People will need their tax returns, pay stubs, and other financial records in order to fill out the application. To find out who can buy insurance, and how much subsidy help they get, the exchange has to consult a data hub. That data hub isn’t finalized yet, but is expected to merge income information from the IRS, disability information from the Social Security Administration, citizenship information from the Department of Homeland Security, and income determinations for Medicaid coverage.
Administration wants more taxpayer money to hire IRS army
The health care law mandates the IRS implement more than 40 new tax provisions. The Treasury Inspector General questioned if the IRS properly estimated how many employees it needed to oversee a law containing “the largest set of tax law changes in more than 20 years.” Even the IRS’s National Taxpayer Advocate once warned she was “concerned about [the IRS’s] ability to administer the new health care credits and penalty taxes in a fair and compassionate way.”
To enforce the tax provisions, CBO warned the IRS needed more money. Last year, the Obama Administration secretly transferred $500 million to the IRS to help the agency hide the law’s ballooning implementation costs. In February 2013, Treasury Secretary Jack Lew told the Senate Finance Committee that the IRS has about 700 full time equivalent staff working on the health care law. According to GAO estimates, the IRS will spend approximately $881 million to implement the law through 2013. The IRS’s fiscal year 2014 budget requested a $439.6 million funding increase and a battalion of 1,954 employees to work on the health law.
Dysfunctional IRS managing personal financial information
Since the IRS assesses a tax for each month a person fails to maintain government-approved health insurance, the agency must collect a tremendous amount of data from insurance companies in order to track and monitor compliance. At a minimum, the IRS will have to know:
- The insurance policy costs and benefit structure;
- The individuals covered under the insurance plan;
- The insurance plan coverage timeframe;
- The household income reported to the insurance company;
- If the individual’s employer offered health insurance coverage.
If a person is offered insurance by his or her employer, then the IRS will also have to know:
- How many people the business employs;
- The employer-sponsored insurance plan’s costs and benefit structure;
- The people covered under the employer-sponsored plan;
- The insurance policy’s coverage period.
To get this information, the IRS will create new forms and filing procedures. The agency also must develop systems that sort, store, integrate, and apply the data to an individual taxpayer. They will be the keeper, every year, of individuals’ insurance status.
IRS run amuck: Agents improperly seized confidential medical records
Adding fuel to the fire, last week reports surfaced that “an unnamed health care provider in California is suing the IRS … alleging that they improperly seized some 60 million medical records of 10 million Americans, including medical records of all California state judges.” These allegations raise further concerns that the American people simply cannot trust the IRS to manage its health care law responsibilities.