House Small Business Committee Chairman Sam Graves (R-MO) today pressed the Internal Revenue Service (IRS) to address the complexity of the agency’s recently released Obamacare compliance forms for small businesses, and asked what is being done to educate and help small businesses with these requirements.

 “In mid-September, the Internal Revenue Service (IRS) published numerous draft forms and instructions for compliance with the tax provisions of the Affordable Care Act.  These documents are lengthy, complex and confusing to tax preparers who serve America’s small businesses,” the letter states.

The letter from Chairman Graves specifically inquires about two complicated and lengthy forms that millions of small businesses may encounter for the first time in tax preparations.  Form 8965 is required for those claiming an exemption, and includes 15 pages of forms, instructions and worksheets.

“As you know, the Congressional Budget Office estimated that 30 million people could be subject to the individual mandate penalty, and 23 million of them may qualify for an exemption.   This means that millions of small business owners may be forced to rely on these forms and instructions to determine whether they are entitled to an exemption and to claim it,” Graves states in the letter. “In addition, we are told that the Department of Health and Human Services (HHS) will issue some or all of the hardship exemptions.   The forms mention those exemptions and that HHS or the exchanges will issue them, but do not explain when taxpayers must apply for them, when or how that decision will be communicated, what appeals process will be used, and how long the exemption will be effective.”

Similarly, Form 8962, which is required for taxpayers who wish to claim a premium tax credit, is 12 pages of forms, worksheets and instructions.  

Graves concluded, “Most small businesses do not have tax advisors, attorneys or accountants on their staff.  They must rely on outside assistance to navigate these complicated tax rules.  On all of the above issues, is the IRS working with HHS to educate small business owners about these new forms and issues?   What steps has the IRS undertaken to listen to the concerns of small business owners and their tax preparers?”

In his letter, Graves requests a response by October 22, 2014, to allow small businesses the necessary time for tax preparations. The full Graves letter to the IRS is available HERE.

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