Health Care Reform

Ways and Means Democrats and IRS Debunk GOP Health Reform Myths

WASHINGTON, D.C–(ENEWSPF)–March 25, 2010. During an Oversight Subcommittee hearing today, Ways and Means Committee Member Ron Kind (D-WI) questioned Internal Revenue Service (IRS) Commissioner Douglas Shulman on the role the IRS would have implementing comprehensive health reform.

The answers provided by Commissioner Shulman debunked a number of myths from Republican Members of Congress who have suggested that the IRS would assume an intrusive, burdensome relationship with taxpayers as they implement health reform.

To the contrary, Commissioner Shulman said the IRS would not proceed with audits of taxpayers to verify they have insurance. That role will be filled by the Department of Health and Human Services (HHS) and insurance companies, which will provide standard forms to the IRS so they can, in turn, deliver about $500 billion in tax relief to help middle class families and small businesses pay for health insurance.

An unofficial transcript of the exchange follows:

Representative Kind: Dr. Boustany raised the issue of the health reform bill and I think there is a lot of misinformation, a lot of misperception, about the role that IRS will play in the implementation of the recently passed health care bill.

So let me ask you a series of questions and as much as you can just answer them yes or no to clarify some questions that I have about the exact role that the IRS will play.

Representative Kind: The health care bill that was just signed by the President will not fundamentally alter the relationship between the IRS with the American taxpayer, will it?

IRS Commissioner Shulman: No.

Representative Kind: You said that right now you are moving forward doing calculations of costs and staffing needs that the IRS has but you haven’t made any of those final determinations yet have you?

IRS Commissioner Shulman: That is correct.

Representative Kind: And IRS agents are not going to go out and auditing taxpayers to verify if they have obtained acceptable health insurance, will they?

IRS Commissioner Shulman: No.

Representative Kind: In fact it’s going to be the insurance companies that will merely be certifying whether or not an individual has obtained health care coverage and they will be certifying that to the IRS?

IRS Commissioner Shulman: Yes, it’s probably worth me being very clear because I think there have been some misconceptions out there. The way we envision this working is that HHS, the Department of Health and Human Services and the exchanges will be working with the insurance companies to determine what is acceptable coverage.

All that will happen with the IRS is similar to a current 1099 where a bank sends IRS a statement that says ‘here’s the interest’ someone owes and they send it to the taxpayer. We expect to get a simple form that we won’t look behind that says this person has acceptable health coverage. There are not going to be any discussions about health coverage with an IRS employee.

Representative Kind: In fact I envision that the major role the IRS will play is trying to get information into the individuals’ hands and businesses about the various tax incentives that the health reform bill has and how they can best access those incentives and utilize them, is that correct?

IRS Commissioner Shulman: Yes, I mean, the role of the IRS is going to be again, the tax portions of this, not the health portions of this, and what we are going to try to do is make sure that people are educated, that there is information, we process payments quickly. We also will make sure there is no fraud and abuse in the system as we always do.

Representative Kind: So the IRS is still going to pick up the phone and answer questions in regards to the tax incentives in the health care bill?

IRS Commissioner Shulman: Yes

Representative Kind: And I assume that the IRS will try to build some type of online education service too for people to access as far as what they are eligible for?

IRS Commissioner Shulman: Absolutely.

Representative Kind: And that you will probably be performing some additional outreach services with businesses and taxpayers about the health care bill?

IRS Commissioner Shulman: Absolutely.

Representative Kind: And as you indicated earlier to Mr. Etheridge, you are already moving forward on a 35% tax credit that small businesses are going to be getting this year already with enactment of the health care bill?

IRS Commissioner Shulman: That is our first move.

Representative Kind: And no taxpayer is going to be subject to any IRS liens or levies, or jail time, for failing to disclose insurance requirements to the IRS?

IRS Commissioner Shulman: That is what the legislation calls for, yes.

Representative Kind: And as soon as your internal review is done, I assume you will come back and report to Congress what type of resources you’ll need for staffing or for additional funds in order to implement the health care bill?

IRS Commissioner Shulman: Yes, I do want to be clear as I was with Mr. Boustany, we will need resources to implement the tax provisions of this legislation and we will look forward to working with Committee to make sure we have the proper resources to serve the American people.