As millions of Americans brace for tax season, the Internal Revenue Service is requesting a $2 billion boost to its budget and 9,000 new employees as it prepares to enforce Obamacare’s tax provisions.
President Obama released his $4 trillion budget proposal for fiscal year 2016 this week, which includes $13.9 billion for the Internal Revenue Service. The agency asked Congress for close to $2 billion more for operations than last year—a 16 percent increase.
The billions of dollars will help the agency bolster its staff by adding more than 9,280 full-time employees. The proposed jump in employment at the IRS is an 11 percent increase from 2015.
To enforce the 46 new tax provisions of the Affordable Care Act specifically, the IRS asked for $67 million. That will cover 483 new employees related to Obamacare’s implementation.
“As the tax law changes, the IRS must implement programs to ensure that taxpayers understand the new laws, and that the IRS can address noncompliance,” the agency’s budget proposal states.
In addition, the agency requested $301.5 million to hire close to 3,000 additional staff to assist taxpayers calling into the agency with questions. The IRS said it needs to staff to address the “increased demand” for assistance resulting from Obamacare’s implementation and managing taxpayer submissions relating to the health care law.
Though Obamacare went into effect in October 2013, this tax filing season is the first in which consumers are required to report whether they had health insurance in 2014. Those who did not have coverage—close to 6 million Americans, according to the government’s own projections—are required to pay a penalty of either $95 or 1 percent of their income.
Meanwhile, consumers who received subsidies available under the Affordable Care Act may have to “reconcile” their tax credits. Those who received a subsidy last year will be forced to return some money, as any increase in income could mean they received more in tax credits than they were entitled to.
Ed Haislmaier, a health policy expert at The Heritage Foundation, told The Daily Signal the rules for calculating tax credits available under Obamacare are a major design flaw of the law.
Haislmaier noted that any tax credit payment made during the year by the IRS to an insurer must be reconciled on the enrollee’s tax form, which is two pages and 36 lines. That form, he said, is included with the consumers’ federal income tax return.
To remedy potential changes to and the delivery of tax credits, the IRS requested more than $305.6 million, or 818 new employees, to implement technology changes.
Meanwhile, the Department of Health and Human Services announced a partnership with close to a dozen nonprofits and tax-preparation companies, including H&R Block and Jackson Hewitt, to assist with those who are confused about how Obamacare impacts their tax filings.
According to HHS, the government’s collaboration with the private sector aims to “ensure that the public understands how health care and their taxes intersect.”