“Among the questions [Administration] officials expect people to have about [Obamacare] are…How can they fill out their tax forms correctly?” –The Washington Post, article on March 22, 2010, the day Obamacare was signed into law
Of all the provisions in Obamacare the Internal Revenue Service (IRS) oversees, the most far-reaching is the mandate for all Americans to purchase government-approved health insurance. Unprecedented in its scope—forcing all Americans to buy a product, and taxing them due to their very existence if they do not—the mandate will require Americans to submit their insurance information to the IRS.
Section 1502 of Obamacare includes pages of requirements that insurers will have to submit to the IRS documenting people’s health coverage, including individuals’ names, Social Security numbers, whether or not the health plan is “government-approved” coverage complying with the mandate, and “such other information as the [Treasury] Secretary (i.e., the IRS) may require.” Individuals will also get copies of these forms, and have to submit them to the government with their tax returns.
The IRS has yet to release the official copy of the mandate compliance form, but Americans for Tax Reform (ATR) prepared a projection of what the form might look like. Sadly, the ATR estimate of a one-page mandate form may actually underestimate the scope of the paperwork involved. Consider Massachusetts’s real-life example of the paperwork burdens necessary to ensure compliance with the mandate:
A new three-page schedule had to be completed and filed with…the state tax return. In addition, a 10-page booklet with instructions and worksheets accompanies the other instructions and worksheets for the state income tax return.
If the IRS mandate form is three pages long, it will be longer than form 1040, which most Americans use to file their taxes.
Most Americans find completing their taxes every year difficult enough as it is. According to the National Taxpayer Advocate’s annual report:
Individuals and businesses spend about 6.1 billion hours a year complying with the filing requirements of the Internal Revenue code. If tax compliance were an industry, it would be one of the largest in the United States. To consume 6.1 billion hours, the “tax industry” requires the equivalent of more than three million full-time workers.
Given the onerous paperwork burdens our country already faces thanks to the tax code, Americans do not need or want to face more bureaucratic hassles to provide personal health information to the IRS.