The IRS as Insurance Regulator
As if U.S. tax forms aren't complicated enough, Congress is expected to include in its final health care reform bill a requirement that nearly all Americans have health insurance -- and prove it on their tax returns or face a fine.
The Internal Revenue Service would be tasked with enforcing this new health insurance mandate, prompting some in the tax preparation business to say this is going to add a whole new burden to the tax agency.
"Just the audits of this is going to be huge because our system is a voluntary compliance system," said Terry Jones a private certified public accountant. "The IRS can audit, of course, and this is a whole new area opening up that the IRS is going to have to be on top of."
In addition, the health care reform bill likely would require the IRS to dole out taxpayer dollars -- subsidies -- to low-income Americans to help them pay for health insurance, administer tax credits to small businesses to help them offer health insurance to workers and collect billions of dollars in new taxes on employers, insurance companies and medical device companies. . . .
One top Senate Republican says he's not convinced the IRS is up to the job and wanted some assurances before the Senate voted on the bill . But that didn't happen. . . .
Interestingly, I also saw this headline today: "3 in 10 calls to IRS expected to be ignored."
The Internal Revenue Services is warning tax filers that 3 in 10 calls to the agency will likely be ignored this year,
The IRS said in its annual report to Congress that the IRS is overwhelmed because more people are phoning the IRS with increasingly complex questions than in years past. As a result, the agency has lowered its target rate of answering calls to only 71 percent for the fiscal year 2010, down from 83 percent in fiscal year 2007.
“In other words, the IRS has set its priorities so that nearly three out of every ten calls seeking to reach an IRS telephone assistor will not get through, and callers who do receive assistance will first have to wait on hold for an average of nearly 12 minutes,” the report said.
Although a goal of 71 percent may not seem high enough to tax filers, it would be a better rate of answering calls than the IRS achieved last year.
During the fiscal year 2009 tax season the IRS reported answering only 64 percent of calls with wait times of roughly eight and a half minutes.
Things don't appear to have improved over time and with congressional intervention, either. In 1998 Congress passed legislation to help improve service for taxpayers. That year the rate of service was 69 percent, four points better than the 2009 rate.