Obamacare Will Swamp the IRS — Real Health Care Reform Healthshare

Obamacare Will Swamp the IRS

Many people have heard there will be 20 new taxes under Obamacare. But the actual amount of new taxes and regulations is 47.


These include penalties on employers who don’t offer the right coverage to their employees, higher income taxes for certain employees, and the elimination of certain tax deductions people use. But of course there are many more we don’t have space for here.


The Real Problem with 47 New Taxes and Regulations


The IRS won’t be able to keep up with all the new audits that will be required on these new taxes and regulations, according to the Treasury Inspector General for Tax Administration, J. Russell George.


Mr. George testified to the House Appropriations Committee on March 5, 2013, stating, “It is unprecedented in recent history, the amount of responsibility the IRS is being given in an area that most people don’t think of as an IRS function.”


He explained that U.S. citizens will practically overrun walk-in and call-in tax centers with questions about new tax penalties and credits. “This is going to lead to problems, sir,” he stated.


Mr. George continued, “They have to determine what enforcement mechanisms they’ll employ…how they go about determining who to audit and who not to.”


In other words, this large increase in their workload will lower the IRS’s ability to pursue tax fraud. They’ll have to calculate the costs and benefits of auditing various people and simply make a choice, allowing some to go free and some to be prosecuted. So some fraudsters will go free because the IRS doesn’t have enough time.


The Truth of the Testimony–and Why it Matters


Mr. George intimately understands the IRS’s workload, because he oversees 800 agents who provide independent oversight of the IRS.


It’s not easy to investigate about 100,000 IRS employees. Among other duties, his people investigate IRS employees who ask for bribes or who misuse citizens’ private information. Also, Mr. George reports directly to Congress, to our lawmakers, who depend on him to understand the state of affairs at the IRS.


If Mr. George believes that these new taxes are too much for the IRS to handle, that raises an important question: how can Obamacare work if the IRS can’t even keep track of collecting taxes to fund it?


Preparing for the Future


I’ll be paying close attention to how this plays out. And, while the government determines how to solve their problems, I am holding on to my grandfathered HSA plan for as long as possible, legally saving money and watching it grow tax-free for medical emergencies and for retirement.


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