The latest Bloomberg Businessweek includes a short article that seems to solicit sympathy for the Internal Revenue Service, which faces the herculean task of enforcing the penalty — or tax — associated with the federal health care law.
All told, the IRS has to enforce 47 tax provisions under Obamacare. That may not sound too terrible for an agency that’s supposed to administer a tax code four times as long as War and Peace. Then again, the IRS is already struggling to keep up with its regular duties. Every year an estimated $385 billion in taxes goes uncollected because of tax evasion, according to the agency’s own figures. Often when Congress calls for a change, the IRS’s computer programmers botch it; glitches affect millions of taxpayers annually.
Adding Obamacare to the IRS’s plate is a “tremendous burden” that “I don’t think they are capable of meeting right now,” complains Chuck Grassley of Iowa, the senior Republican on the Senate Finance Committee.
Congress prohibited the IRS from using liens or wage garnishments against individuals who flout the mandate. So the only way for the agency to levy the penalty—$695 annually, or 2.5 percent of household income, whichever is higher—is to withhold a tax refund, collected by about 80 percent of households every year. As for the other 20 percent, the IRS declined to answer questions about how it would enforce the new law.
Putting all of this into place is expected to cost $881 million through 2013, according to the Treasury Department.
Rather than force the IRS to undergo this fate, perhaps we ought to just repeal the convoluted law.
