Healthcare Reform: Can the IRS Handle Healthcare Reform? How Will the IRS Enforce It?

If you have had a discussion with your fellow Americans about healthcare reform, you probably know by now that there is no better way to get into a heated debate than to mention the health insurance mandate, the requirement that Americans be able to show proof of health insurance or face a penalty if they can’t. An even quicker way to get into a heated debate is to mention that the IRS is going to be involve in enforcing the health insurance mandate. After all, how many Americans trust the IRS with their taxes let alone their health insurance?

Well, an interesting article in USA Today delves into the question of how the IRS may be involved in healthcare reform and IRS may try to enforce the health insurance mandate. It’s probably not going to set your mind at ease about the situation, but we thought it was a good read. As one excerpt puts it:

Starting in 2014, the agency will have another task: making sure all Americans have health insurance. Under the law, Americans who can afford health insurance but refuse to buy it will face a fine of up to $695 or 2.5% of their income, whichever is higher. More than 4 million Americans could be subject to penalties of up to $1,000 by 2016 if they fail to obtain health insurance, the Congressional Budget Office said last week.

The IRS will be the enforcer — sort of.

While the IRS can impose liens or levies, seize property or seek jail time against people who don’t pay taxes, it’s barred from taking such actions against taxpayers who ignore the insurance mandate. In the arsenal instead: the ability to withhold refunds from taxpayers who decline to pay the penalty, IRS Commissioner Doug Shulman said this month.

Still, compliance with the health reform law will be largely voluntary, says Timothy Jost, a law professor at Washington and Lee University. “By taking criminal sanctions and liens and levies off the table, the IRS’ hands are tied, to a considerable extent.”

The IRS is “being put in a position where it will be sending notices that will annoy people” and not much else, says James Maule, professor of law at Villanova University and author of the tax blog MauledAgain. “It’s basically designed for failure.”

For the full article, visit USA Today.

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4. Healthcare Reform: Immediate Changes in Medicaid
5. Healthcare Reform: Health Insurance and Preventive Healthcare Services