Tax Scrutiny Part III
Thursday, January 20, 2011
The IRS National Taxpayer Advocate recently released its annual
report to Congress. In addition to addressing time and money
spent complying with the enormous tax code, the report also
acknowledges that it's a challenge for the IRS to administer
benefits programs, including the new health care law.
The report notes that the IRS's mission has been to
collect taxes, but in recent years Congress has made the IRS
administer an "increasing number of social benefits programs,
including Economic Stimulus Payments, the First-Time Homebuyer
Credit, and the Making Work Pay Credit. The recent directive to
administer major aspects of the new health care law will add
significantly to the IRS's workload."
The IRS must administer four major parts of the new health care
law, including penalties for individuals who fail to get insurance,
penalties for small businesses that fail to provide insurance,
premium assistance credits and a small business tax credit.
The report says the IRS is capable of administering health care
provisions, but with a caveat. It states that it's
"essential that the IRS revise its current mission statement to
also reflect its role as social benefits administrator. As a
result, the IRS can propose separate budget requests for benefits
programs rather than having to divert resources from traditional
enforcement activities. The IRS should also consider realigning its
organizational structure to effectively administer these programs
in an effective and efficient manner. Such restructuring
should involve the creation of a program office to work social
program issues exclusively."
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