Critical Condition

House GOP: Obamacare’s IRS Connection

As the health-care debate enters its final hours, the biggest specter for House Democrats may not be Nancy Pelosi, but the Internal Revenue Service. GOP leaders tell National Review Online that they’ll spend the next few days hammering on-the-fence Democrats for supporting, via the health-care bill, new funds and responsibilities for the much-despised IRS.

“One of the things Democratic members of the House, particularly those in moderate districts who are on the fence about voting for the health care bill, haven’t thought through is the massive expansion of the IRS in the Democrats’ health care bill,” says a House GOP aide. “Do they really think the American people are going to like a bill giving more power and money to agency as unpopular as the IRS?  This is something that you will definitely hear House Republicans talk more about going forward.” Press conferences are already scheduled on the topic for later today.

According to the House GOP’s analysis of CBO scores, Obamacare will dole out as much as $10 billion, or about $1 billion per year, to the IRS:

New revenue is needed so the IRS can implement the new policies established by the bill and to carry out new responsibilities, including enforcing the individual mandate by reviewing insurance policies held by Americans, employer penalties and other new taxes.  The IRS will have lots to do to implement and enforce the new taxes and mandates included in the bill.  In fact, the Senate Democrats’ bill references or amends the Internal Revenue Code 180 times.

While it is not possible to predict with certainty how many new IRS employees and agents will hire to complete all these new responsibilities, it is possible to compare current staffing levels and make an estimate.  Take for example the IRS’ Taxpayer Services Division.  Based on the current cost to employ this division’s workforce, an additional $1 billion per year would mean 12,500 new employees at the IRS.  That’s more than 12,000 IRS employees that will be examining taxpayer records to enforce the government’s definition of “affordable” and “acceptable” insurance coverage, and working to comply with the bill to get people into government-run insurance.

What will all these new IRS employees do?  The bill gives the IRS many new powers and tasks the IRS with the responsibility to enforce the mandates on individuals to purchase insurance the government deems acceptable as well as employer mandates to provide insurance the government deems affordable.  In short, the Democrats’ bill will give the IRS sweeping new powers and require the IRS to become a much more intrusive force in every American’s life. 

The House GOP also claims that the IRS will be the “primary agency” for enforcing Obamacare, should it pass:

If any American is not covered by “acceptable” insurance or misreports that they have acceptable coverage when they do not have such coverage the IRS will come knocking with steep taxes and potentially heavy penalties in hand.  If employers do not provide coverage or if they provide coverage that the government considers “unaffordable” the IRS will be at the employer’s door with taxes and possible penalties.

Should the IRS be the primary agency to determine who gets help with premiums and to enforce the complex requirements of this massive 2,000 plus page bill?  Should tax collectors track people down that thought they had “acceptable” coverage because their insurer told them it was when it wasn’t?

And not only will Obamacare fund the IRS, but it could give the agency ‘big brother’ power, according to the House GOP’s memo:

Massive Amounts of Personal Data Will Be Sent to the IRS.  Names and addresses of those covered under insurance plans, dates they were covered under “minimum essential coverage” during the year, whether the coverage is inside or outside of the Exchange, how much of the premium was subsidized based on income, and whatever else the Secretary of Treasury decides to include will be sent to the IRS.

Who will have access to this data and for what reasons can it be accessed?  Could the Secretary also require taxpayers to disclose additional information about their utilization of their health insurance?

The Power to Tax Our Health Care.  The Senate Democrats’ bill just doesn’t tax individuals and employers if they don’t comply with the complex mandates in the bill.  The bill sends the IRS out to tax the very products Americans use to maintain and restore their own health.  New taxes on medical devices, on prescription drugs, and on health insurance itself are all targets of the bill.  And, with $10 billion in new enforcement resources, you can bet the IRS will be taking its full share out of the pockets of every American who uses any of these products or services.

For more on this issue, visit here and here.

Robert Costa was formerly the Washington editor for National Review.
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