WASHINGTON, DC – At a tax day hearing of the Senate Finance Committee on Internal Revenue Service (IRS) issues, U.S. Senator Pat Roberts today questioned the witnesses regarding the role of the IRS in enforcing the individual mandates of the new health care reform law and the effects of the new law’s tax provisions on small businesses.

“During the health care debate, I cautioned Americans that the bill would expand the reach of the IRS as they attempt to enforce the many tax provisions in the bill,” Roberts said. “I raised concerns that the IRS does not have the resources to effectively carry out their primary mission of tax collection, let alone administering and enforcing the requirement that individual’s prove to the IRS that they have health insurance or pay a penalty to the IRS for failure to obtain insurance.”

The witnesses at the hearing included: Steven T. Miller, Deputy Commissioner for Services and Enforcement, IRS and Nina Olson, National Taxpayer Advocate, IRS.

The health care reform bill creates a mandate that individuals purchase health insurance and imposes a penalty, collected by the IRS, for those who fail to obtain and prove to the IRS that they have obtained insurance.

In recent public comments, IRS Commissioner Douglas Shulman has said that with respect to the IRS ... “we do not have authority -- first of all, there's no criminal sanctions for not paying this. And there's no ability to levy a bank account or do seizure or some of the other tools. And so our role is going to be straightforward. It's going to be administering the tax provisions.”

Senator Roberts’ concerns about the IRS role in the individual mandate centers on how individuals will prove they have insurance.

Roberts also asked the witnesses how the IRS would cross-check or verify the proof of insurance information submitted by the taxpayer with the information from the insurance provider.

“Massachusetts has an additional 3 page tax form with a ten page instruction booklet to address this problem,” Roberts said. “Is that what’s coming for everyone?

Roberts went on to say, “what will happen if an individual does not purchase insurance and is therefore required to pay a penalty, initially as little as $95 but increasing up to $695 per person a year. How will the IRS collect that penalty?

“What if an individual doesn’t have a tax liability,” Roberts said, “doesn’t need to file a return, but is required to pay the penalty for not having insurance? How will the IRS enforce this provision?”

In addition, Roberts raised concerns about the costs to small businesses. Under the health care bill, small businesses are eligible for a tax credit to provide health insurance for employees.

Roberts said, “what will be the costs to these small businesses after the tax credit phases out after just two years?”

Senator Roberts opposed the health care reform bill.

Senator Roberts is a member of the Senate Committee on Health, Education, Labor and Pensions and the Senate Committee on Finance. He is Co-Chairman of the Senate Rural Health Caucus.

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