Mounting scandals at the Internal Revenue Service are jeopardizing critical funding for the agency as it gears up to play a big role in President Barack Obama’s health care law.
President Obama sought a significant budget increase for the IRS for next year. Congressional Republicans, however, see management problems at the IRS as an opportunity to limit the agency’s funding just as it is trying to put in place the massive new law.
In May the IRS was found to have targeted conservative groups filing for tax exempt status. It was also recently discovered that the agency was spending lavishly on conferences and other expenses (see a prior post https://affordablebookkeepingandpayroll.com/?p=1668 for more information on this). The Justice Department is investigating the targeting of conservative groups, and much of the top leadership at the IRS has been replaced. New acting IRS commissioner, Danny Werfel is conducting an internal review of the agency. These investigations are occurring as the IRS prepares to assist with the Affordable Care Act implementation, and the ensuing changes to the tax code.
President Obama’s proposed budget of about $440 million would go toward implementing the health care law, which would include hiring nearly 2,000 employees. Under the new law, nearly everyone in the U.S. will be required to have health insurance, or face penalties. The IRS will collect those penalties.
There is concern amidst these recent scandals that the IRS is not capable of managing its new responsibility in regard to overseeing the Affordable Care Act. We’ll have to see what happens in the upcoming months.
Candy
