Now Comes Hard Part Of ACA – IRS Has To Enforce It!

The most difficult challenge facing the Affordable Health Care Act (ACA) remains ahead of us.  It’s not the taxing powers contained in the bill – and there are plenty.

The Associated Press reported that now that the Supreme Court has spoken – the IRS can gear up to begin enforcing the law in 2014 –

  • Issuing new regulations
  • Developing new forms
  • Writing new computer programs

The ACA is “the largest set of tax law changes in more than 20 years”, according to the Treasury Inspector General.

The biggest challenge the IRS faces is the development of an outreach program to explain all of the changes to tax professionals and taxpayers.

And, after all of this is accomplished, the IRS will have very limited powers of enforcement.

  • Verifying the validity of exemptions claimed for religious beliefs or because the tax payer is a member of an American Indian tribe, will be difficult, manual and time consuming –
    • Purely from a business point of view, it’s cheaper to approve the exemption than to investigate its legitimacy!!!
  • Once, a penalty has been assessed, it cannot be collected unless the taxpayer is owed a refund equal to or greater than the insurance penalty –
    • IRS has no powers of coercion – i.e. civil or criminal penalties –
    • It can only send a machine generated letter of rebuke –
      • sure to alter the behavior of any miscreant??

It requires a total suspension of skepticism and experience to believe that the IRS can actually police the health care decisions of tens of millions of Americans in 2014 or even 2016 –-

The complexity and confusion of implementing the ACA may actually become the chief obstacle to necessary and meaningful Tax Reform?

Raise your hand if you believe that any member of Congress actually considered that possibility before rushing headlong where no Congress had ventured in nearly a century?

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