IRS Getting Ready To Collect More Taxes for Obamacare

David Williams

August 21, 2012

Let’s be honest, government comes up short in most things it does.  Whether we’re talking about the quality of education, our roads and in just a few years, our health care system, time and time again the government fails to deliver and meet the needs of the American people.  However, there’s one sector of government that is an outlier from the rest of the programs the government commands where the government is relatively efficient – or as efficient as a government can be.  The bad news is that the efficiency is in tax collection.

This revelation may be somewhat intuitive because even if government has no interest in doing anything else well, it must ensure it has a revenue source to continue its spending propensity.

Given this reality, we shouldn’t be surprised to learn that IRS Commissioner Douglas Shulman recently announced that the IRS will have its greedy hands prepared and ready to take more taxpayer dollars come 2014.  Specifically thanks to Obamacare, the new source of revenue will be extracted from those that refuse to succumb to the government’s requirement that all Americans have health insurance.

In a recent article, The Fiscal Times reported that Commissioner Shulman remarked that “We [the IRS] feel very comfortable that the part of the Affordable Care Act [Obamacare], which we’re responsible for, will be implemented well and on time.”  The article continues to offer an additional insight from Shulman, “People have my personal commitment and the agency’s broad commitment that we will do it in a way that minimizes burden on businesses and individuals and respects taxpayers’ rights.”

While we can appreciate the dedication of this a civil servant and in no way seek to question his intentions, we can – and must – challenge the damaging law that Congress has tasked the IRS and other agencies with carrying out.  Perhaps the IRS will implement the additional tax collection as stipulated by Obamacare in the least costly way that “minimizes burden.”  However even this action will not be enough to ameliorate the tremendous harm of Obamacare – specifically the very existence of its tax provision – will have on individuals, families and businesses alike.

Despite what Commissioner Shulman and others may boast about the agency’s readiness to begin collection of taxes because of Obamacare, there’s reason to believe that the additional requirements that this legislation imposes on the IRS may ironically impede its ability to collect taxes.

Taxpayer advocate, Nina Olson, offers insight into why the demands of Obamacare placed on the IRS may just be the tipping point that lowers its “efficiency” to the poor level of performance of other government agencies.  Olson notes, “The combination of the expanding IRS workload and its shrinking resources is the most serious problem facing the U.S. taxpayers.  Because of this imbalance between responsibilities and resources, the IRS is now unable to answer roughly one-third of the tens of millions of calls it receives from taxpayers each year, or to process timely about half the correspondence it receives from taxpayers in response to tax adjustment notices.”

Ms. Olson’s observations certainly do not bode well for the IRS and its ability to collect taxes.   This will certainly place the Obama Administration in quite a precarious position.  In addition to the havoc our President’s signature legislative “success” will wreak on our economy, this same victory may just be what also puts our IRS over the edge or at least force it into a very precarious position.

While at first glance this may seem to be a very attractive outcome, this situation would only harm taxpayers more.  Recognizing the IRS’s new found difficulty to collect revenues, the agency will just increase its size and the government workforce.  This action will prompt even more money to be taken from our paychecks as the government will demand so much more in order to pay for the new employees.

This is a vicious cycle to be sure.  The only way to end it is by Congress repealing Obamacare and passing legislation that will overhaul and simplify our tax code.