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Side Effects: IRS Could Eat Your Refund

Posted By Vivek Rajasekhar On April 20, 2010 @ 4:00 pm In Obamacare | Comments Disabled

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Obamacare requires all individuals to carry health insurance for themselves and their families.  Those who don’t will have to pay a penalty.  And the IRS is the agency charged with making sure the uninsured pony up.

Just how will the IRS do that?  It’s not something lawmakers got around to actually, you know, writing down in any detail in that big bill.  That’s even harder to do than reading that monster.  But now that they’ve made Obamacare the law of the land, they’re starting to take an interest in the question. No doubt some are blaming the daily eruptions on congressional staff.

The Senate Finance Committee recently held a hearing to explore what the IRS might do to enforce the congressional mandate to buy health insurance.  One answer headlined the Wall Street Journal’s report on the hearing: IRS May Withhold Tax Refunds to Enforce Health Care Law [2].

Steven T. Miller, IRS Deputy Commissioner for Services and Enforcement, explained that, though “The Internal Revenue Service won’t audit you to make sure you have purchased health insurance under provisions of the new health-care law…it may withhold your tax refund if you can’t demonstrate that you are insured.”

According to the Journal, if the IRS does not receive notification that a taxpayer has insurance, the agency will notify the taxpayer that he or she must pay a tax penalty.  Then, if the penalty payment does not arrive, the IRS may withhold tax refunds due to the filer.  But ,then, what happens if the taxpayer doesn’t have a refund coming?

Of course, as Obamacare increases the tax agency’s power, it will also increase its payroll. Heritage Tax Policy Analyst Curtis Dubay noted on FOX Business Network: [3]

[The IRS will]… be in charge of enforcing the individual mandate that we all have health insurance.  They’re also going to be in charge of making sure businesses provide health insurance for employees. So they’re going to have to add lots more workers.

In Washington, it seems, you can’t spell health insurance without I-R-S.  That’s a shame, because Congress could have dramatically expanded private health insurance without resorting to an unconstitutional mandate.  To learn about far better alternatives (hint: auto enrollment in employer-based insurance and a universal tax credit system, for starters), go here [4].

Vivek Rajasekhar currently is a member of the Young Leaders Program at the Heritage Foundation. For more information on interning at Heritage, please visit: http://www.heritage.org/About/Internships-Young-Leaders/The-Heritage-Foundation-Internship-Program [5]


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/04/20/side-effects-irs-could-eat-your-refund/

URLs in this post:

[1] Image: http://www.foundry.org/tag/side-effects/

[2] IRS May Withhold Tax Refunds to Enforce Health Care Law: http://online.wsj.com/article/SB10001424052702304510004575186082454662468.html?mod=WSJ_latestheadlines

[3] noted on FOX Business Network: : http://www.heritage.org/Multimedia/Video/2010/04/Dubay-on-FBN-4-5-10

[4] here: http://www.hcs.harvard.edu/%7Ehhpr/currentissue/223-233%20Health%20Highlights_Moffit_edited.pdf

[5] http://www.heritage.org/About/Internships-Young-Leaders/The-Heritage-Foundation-Internship-Program: http://www.heritage.org/About/Internships-Young-Leaders/The-Heritage-Foundation-Internship-Program

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