Health Care Reform: Because the IRS Isn't Big Enough Yet

From Kaiser Health News:

Internal Revenue Service agents already try to catch tax cheats and moonshiners. Under the proposed health care legislation, they would get another assignment: checking to see whether Americans have health insurance.

The House and Senate bills require most Americans to have health insurance and to prove it on their annual federal tax return. Those who don't would pay a penalty to the IRS.

That's one of several key duties the IRS would assume under the bills that have been approved by the House and Senate and will be merged by negotiators from both chambers.

The agency also would distribute as much as $140 billion a year in new government subsidies to help small employers and as many as 19 million lower-income people buy coverage.

In addition, the IRS would collect hundreds of billions of dollars in new fees on employers, drug companies and device makers, according to the non-partisan Congressional Budget Office (CBO). 

Nor is it even clear the underperforming agency could handle the new responsibilities:

"It's hard to see how the IRS could take on the huge responsibility it would be given under pending health care legislation without some real glitches, or worse," said Sen. Charles Grassley of Iowa, the top Republican on the Senate Finance Committee who voted against the bill with every other Republican senator.

…The IRS already has trouble meeting its primary duty: collecting taxes. By the IRS's own estimates, it failed to collect about $290 billion in taxes in 2005, the latest year for which data are available. Pete Sepp, spokesman for the National Taxpayers Union, an IRS watchdog group, says the IRS might be the "logical" agency to enforce the mandate, "but that doesn't mean things will go smoothly."