ObamaCare Tax Credits Will Create Mess for IRS

Former IRS commissioner testifies about potential problems

The U.S. health care law's process for providing insurance subsidies to middle-income families will produce a "needless administrative and compliance quagmire," a former Internal Revenue Service commissioner will tell a congressional committee today.

The subsidies, structured as tax credits, are the main method in the 2010 law of helping Americans obtain health insurance. They will be delivered through exchanges—government-run markets that will connect people with insurance and cover part of the cost through federal payments to insurers. The exchanges will be operated by states and the Department of Health and Human Services.

Such exchanges "will be starting from scratch—with no experienced workforce, no tested technology and no history of dealing properly with confidential taxpayer information," former IRS Commissioner Fred Goldberg will say, according to his written testimony to a panel of the House Ways and Means Committee.