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Health care bill gives IRS added power

March 19, 2010

As the health care reform vote comes down to the wire, the gloves are coming off on Capitol Hill.

As Democrats seemed to be gaining ground in their effort to get the latest version of the reform measure passed on Sunday, the Republicans launched a new assault, warning of increased involvement of another widely distrusted federal agency, the IRS.

"This dangerously expands IRS authority," said Representative David Camp (R., Mich.), ranking Republican on the Ways and Means Committee, in the latest effort to derail the proposal. "Most Americans will find it shocking and troubling." 

Under the bill, taxpayers could be required by 2014 to buy insurance or face penalties of roughly $325 per person. Collection of those penalties would fall to the IRS.

"This is a vast expanse of power," said Rep. Charles Boustany, Jr. (R-La.) during a conference call with reporters. Provisions in the bill "dangerously expand, in an ominous way, the tentacles of the IRS and its reach into every American family," said Boustany. "This is an unprecedented new role for the IRS, one that will inject the IRS even further into the personal lives of American families."

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The dangers that Camp, Boustany and their colleagues see are detailed in a nine-page report produced by the Republicans on the tax-writing panel. It examines, among other things, the amount of tax to be collected under the bill and the required data reporting.

The report also warns of IRS expansion, increased audits, confiscated refunds and additional, but still nebulous, expansions of IRS powers.

No money yet: The Republican analysis also notes that the bill does not provide the roughly $10 billion over the next decade that the Congressional Budget Office figures the IRS will need to enforce the penalty provisions.

Neither is there anything in H.R. 4872, the Health Care and Education Affordability Reconciliation Act of 2010, giving the agency authority to hire nearly 17,000 additional agents to fulfill any new health care related responsibilities.

Democrats concede that the role of the IRS and how to pay for any new responsibilities must be assessed before 2014 if the bill becomes law. 

But by combining the two biggest government bogeymen of the day, health care reform and the IRS, opponents of the measure have guaranteed that pressure will remain on those who are considering supporting the bill.

Read more: If you need some weekend reading, check out the full text of H.R. 4872. That's what Representatives supposedly will be doing before they vote on the bill Sunday.

This is the budget reconciliation measure that amends the Senate's health care proposal, bringing it more in line with earlier House provisions.

You also can check out the summary of the bill from the Democratic majority on Ways and Means, the Congressional Budget Office cost estimate and the GOP report on expanded IRS powers under the measure.

Additional media and blog coverage of the GOP report can be found at TaxProf Blog, The Hill newspaper's On the Money blog, Going Concern, Wall Street Journal and Capital Public Radio.

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Comments
  • We are headed in the wrong direction if this occurs, alot of my clients are in states like MD where they have been required to pay for health insurance for years and we have to constanty find them affordable coverage, so now in addition to getting fined, the IRS will do a tax intercept too. This is bad.

  • I have to say this is shoking information about the health care bill and the IRS. I didn’t know that the health care bill would make the IRS so powerfull. I wonder how much more power the IRS will have because of the healthcare bill? I guess we will find out in 2012.

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