HEALTH CARE Thoughts: IRS resources
HEALTH CARE thoughts: The Taxpayer Advocate and others are unhappy
National Taxpayer Advocate Nina Olson is reported to be unhappy about the major IRS role in the new health care regime. Olsen believes the IRS is already overworked (she used “overtaxed” in her annual report issued this month, a great pun) and needs more money and time in order to do the job.
“Obamacare” (PPACA) requires the IRS to create an entirely new enforcement and penalty system, while the Service struggles to deal with such programs as the new home buyers credit, not to mention the regular work burying the agency.
Estimates of resource needs vary, and nothing is very concrete yet, but certainly a substantial increase in manpower and infrastructure will be necessary, very soon (and the IRS never moves very fast).
Then it gets worse.
Obamacare includes various add-ons, one of which will require additional Forms 1099 for supplies purchased to be filed by millions of businesses and entities and then sent to hundreds of thousands of businesses and entities and copied to the IRS so everything can be matched. This is supposed to minimize the “tax gap” and cut down tax evasion.
(For example, I will have to send a 1099 every year to Staples.)
Problem is, Congress clearly does not understand how tax evasion really occurs and this will distract the IRS from more important work, and clog the processing capabilities for an eternity.
(I am quite certain Staples is already reporting my purchases.)
In a strange twist, credit card purchases are apparently exempt. This could be because credit cards will be traced via another route (worrisome) but more likely because some bank lobbyists got inside the sausage factory (so I could eliminate the 1099 to Staples by using my credit card).
The story of the health care reform bill is just getting started, and lots of problems are ahead.
Tom aka Rusty Rustbelt
Rdan here…Linda Beale adds a comment I lifted from an e-mail:
Its no secret that the IRS Is overtaxed—its becoming the primary agency for all kinds of jobs—tax collection, sure, but also health, social security, environmental, aging generally…..
and as for the 1099s, yes, that is another paperwork mountain that will go to the IRS. Fine if it is all computerized and matched, but that may be a big if.
The problem with most enforcement, these days, is that it takes quite an effort to do anything to catch up with all the effort that is being put into nonenforcement.
Linda M. Beale
Credit card recipts are being tracked because the banks will report the total volume in and out to businesses to the IRS. IT will apply to 20k or 200 transactions. This starts in 2011.
Actually now I suspect that some businesses in S La wish they had had this because with no tax returns no money from BP. So for a small business with things like staples etc a credit card is the way to go now. (Plus a little float in addition). I maintain that a small business not doing its accounting with quicken or the like today probably needs to move. Then for the business 1099 it is only the ITN that is needed, the rest should already be in the program.
The whole point of the IRS is to minimize the administrative costs of Medicare, Medicaid, ObamaCare, etc so the left can continue to lie that government run healthcare ONLY requires spending 1% on administrative costs.
There are so many off balance sheet transactions going on in the U.S. government. It would make the management of Enron proud!
I’m also willing to bet if you do not pay the tax for not purchasing a government approved health care plan they will send in the military. There fore we need to include the expenses of sending out the SWAT team as part of ObamaCare administrative expenses. Then you have the ObamaCare administrative expense of the court system to take the time to send the people engaging in civil disobedience to jail. Then there are ObamaCare administrative expenses to operate the jail. Lots of hidden fees in ObamaCare. Enough that would make the airline industry proud (although most of their fees are a result of regulation).
Warning: Graphic video not for the faint of heart or animal lovers!
http://www.youtube.com/watch?v=RbwSwvUaRqc
That’s why the Health Care Reform is still still fundamentally flawed. The Health Care Bill mandates health care coverage for the uninsured. Creates more regulatory functions etc so “American People” can all be “covered”
The resultant product from Congress… Nancy Pelosi… “Let’s Pass It so you can see what’s in it!!!” The original good idea to cover the uninsured becomes a little monster and grows everyday as we find out more about it!
Why can’t government create a clear, unburdened law that actually accomplishes what it set up to do. There is no insurance portability, there is no relaxation of interstate health insurance(still non-competitive at national level), no support for existing public hospital system… no support for reasonable tort reform… That’s just scratching the surface on what should be done.
The end result was another tax. Another tax that puts nothing but more burden on small businesses and individuals. (And IRS as this article points out) A 1099 tax rule that’s essentially unenforcible unless you want to put everyone in jail. I think every transaction greater than $100 (I might be wrong-my CPA still trying to understand the law) you need to give a 1099 form to the seller to fillout for the transaction to be legal. How can any business, individuals, survive?(yes-if you buy anything from ebay-you better get the seller/buyer a 1099 form)
This is not a partisan issue. I think the city of Bell is a very good example. We essentially have a close loop system where public good is regulated to death. We need 100 legislators to manage 1000 regulators whom regulate one poor soul for compliance. If you don’t produce, we tax you some more, and by the way, please fill out this triplicate 1099 form. Just remember, put your social security number down so everyone can see and if you don’t have one, just make sure you get a EIN from IRS…
What is the solution? I really think government needs to clean up it own act. Eliminate waste, and that means eliminate all these duplicate, triplicate, quadplicate overlapping regulatory agencies. Or more simply yet, introduce term limits in Congress… I think that will be the most simple, elegant bipartisan solution to corruption in government.