December 16,2009

Grassley, Cornyn Express “Extreme Disappointment” With IRS Oversight Board Response to Huge Challenge of IRS’ Administering of Health Care Reform

WASHINGTON – Sen. Chuck Grassley and Sen. John Cornyn today expressed “extreme disappointment” with the IRS oversight board’s lack of engagement in addressing the challenges facing the agency under the trillion-dollar health care reform legislation facing imminent enactment.

“It’s hard to tell exactly what the IRS oversight board does if it won’t look out for the taxpayers facing a big increase in their dealings with the IRS,” Grassley said. “A lot of people already have enough trouble dealing with the IRS when problems come up. The agency has trouble administering the existing health care tax credit. So 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. Unfortunately, the IRS oversight board is sitting by instead of trying to help the public.”

“As the Democrats’ massive Health Care bill continues to barrel through the Senate, we are left with more questions than answers about how the IRS will be able to implement the billions of dollars of new taxes, fees, and federal mandates that are included in the 2,076-page proposal. The non-partisan Congressional Budget Office tells us the IRS budget will need to be almost doubled just to administer the Democrats’ current proposal,” Cornyn said. “This means even more auditors, agents, and bureaucratic red tape for many Americans already frustrated in their everyday dealings with the IRS.”

Under health care reform legislation, the IRS would have to administer several new and very controversial provisions including the individual mandate, employer free-rider penalty, the premium subsidy for low-income individuals, the small business tax credits, working with exchanges to verify income information and figuring how to calculate and collect several new excise taxes. The Congressional Budget Office says administrative costs to the IRS probably would be between $5 billion and $10 billion over 10 years. For fiscal year 2010 Congress appropriated around $12 billion to run the IRS. The Administration and Democratic congressional leaders have not provided estimates of the administrative costs, despite requests from Grassley.

Grassley is ranking member and Cornyn is a member of the Committee on Finance, with exclusive jurisdiction over tax policy. The senators today wrote to the IRS oversight board chairman in response to his letter of Nov. 5, 2009, in response to the senators’ letter of October 29, 2009.

The text of the senators’ letter today follows here. The text of the earlier letters is available at