Q: Is the IRS seeking more than 1,000 new workers to administer the new health care law?
A: Yes. But many of them will be needed to deliver tax credits, not dun taxpayers. IRS says it needs 291 agents to enforce the law, including 193 to "ensure accurate delivery of tax credits."
FULL QUESTION
Dear FactCheck: Can you verify this statement in the article at US News and World Report that the IRS "will need an battalion of 1,054 new auditors and staffers and new facilities at a cost to taxpayers of more than $359 million in fiscal 2012 just to watch over the initial implementation of President Obama’s healthcare reforms."
FULL ANSWER
The IRS is actually asking for more new workers than reported in an article by U.S. News and World Report — a story that has generated a lot of Internet buzz after being picked up by news outlets, such as Fox News and The Daily Caller. The IRS budget request for fiscal year 2012 shows that the agency is seeking at least 1,269 full-time equivalent employees (FTEs) at a cost of $473 million to help implement the Patient Protection and Affordable Care Act.
But many of them are needed to deliver new tax credits, not to dun taxpayers. The agency is seeking to add 291 "revenue agents" — most of them (193) to "ensure accurate delivery of tax credits." The agency’s technology staff would see the biggest increase with the addition of 537 IT program analysts and specialists.
Still, Republican Sen. John Barrasso of Wyoming mischaracterized the IRS budget request in an interview on Fox News, falsely suggesting that all of the new hires will be auditing taxpayers.
Barrasso, Feb. 16: We don’t need a thousand new IRS agents who are now going to audit Obamacare.
That’s ridiculous. Yes, the IRS budget request lists 1,054 FTEs under the category of "enforcement initiatives" — which is the number cited by U.S. News. And, yes, the IRS wants 58 agents to enforce the new tanning salon tax, which took effect in 2010. But the 1,054 figure also includes 504 new hires to "ensure accurate delivery of tax credits." The law, among other things, provides tax credits for small businesses to offer coverage to their employees, beginning in April 2010.
Here are the areas, as defined by the IRS, where the new 1,269 FTEs will be needed (see pages 21 through 66):
- Improve Taxpayer Service, 150
- Increase Coverage to Address Tax Law Changes and Other Compliance Issues, 363
- Ensure Accurate Delivery of Tax Credits, 504
- Administer New Statutory Reporting Requirements, 187
- Implement Individual Coverage Requirement and Employer Responsibility Payments, 65
Now, the 159-page budget document shows that the IRS is seeking a total of 5,112 new workers — including 1,653 that are needed to carry out the president’s fiscal year 2011 policies. That’s because Congress so far has failed to pass a budget for fiscal year 2011, which began Oct. 1, 2010. The IRS budget request does not provide any details on exactly what those 1,653 new hires would do. We asked the IRS and Treasury if any of them are needed to implement the health care law. In a Feb. 23 e-mail, Treasury spokeswoman Sandra Salstrom told us that those employees would not be needed to implement the health care law — although she wouldn’t rule it out.
Salstrom, Feb. 23: I can’t say for certain that NONE of the 1,653 FTEs under "adjustments to reach FY2011 President’s Policy Level" will be needed to implement the ACA [Affordable Care Act], but our budget experts said these are not for implementing the ACA and are instead just in general to get IRS to the staffing levels they need from 2010 to 2012.
Also, it is worth noting that the IRS isn’t the only federal agency that needs to hire new workers as a result of the health care law. The Treasury Inspector General for Tax Administration requested 29 new workers to carry out its responsibility to oversee the IRS implementation of the health care law. That will cost another $5.6 million.
On the other hand, it is likely that the IRS won’t need the 82 employees it requested to carry out a provision of the law that requires businesses to report the purchase of any goods worth more than $600. President Obama called it "a flaw in the legislation," and the Republican-controlled House appears poised to eliminate it.
As we have seen before, the increased staffing needed at the IRS to administer the many tax changes in the health care law has generated a lot of misinformation. In March 2010, we debunked Rep. Ron Paul’s false claim that the IRS would hire "16,500 armed bureaucrats" to enforce the law. We called his statement "wildly inaccurate." Now we know exactly how wild and inaccurate it is.
Update, Feb. 23: In an earlier version, we said that we would update this post if we got more information regarding the IRS request to hire an additional 1,653 FTEs to carry out the president’s fiscal year 2011 policies. We did get a response from Treasury spokeswoman Sandra Salstrom and we updated this post to reflect her comments.
— Michael Morse, Eugene Kiely and Lauren Hitt
Sources
Bedard, Paul. "Healthcare Reform Law Requires New IRS Army Of 1,054." U.S. News and World Report. 15 Feb 2011.
U.S. Treasury. "Internal Revenue Service FY 2012 Budget Request Congressional Budget Submission." 14 Feb 2011.
Patient Protection and Affordable Care Act. Pub. L. 111-148. 23 Mar 2010.
"Report: IRS to hire 1,054 new staffers for health care law." Fox News. 16 Feb 2011.
IRS. "Small Business Health Care Tax Credit for Small Employers." Updated 7 Dec 2010, accessed 18 Feb 2011.
U.S. Treasury. "FY 2012 Departmental Summary." Undated, accessed 18 Feb 2011.
White House. "State of the Union." 25 Jan 2011.
Rubin, Richard. "U.S. House May Cancel Tax-Reporting Rules in Health-Care Law Next Month." Bloomberg News. 18 Feb 2011.
IRS. "Affordable Care Act Tax Provisions." Updated 17 Feb 2011, accessed 18 Feb 2011.
Jackson, Brooks. "IRS Expansion." FactCheck.org. 30 Mar 2010.
Salstrom, Sandra, spokeswoman, Department of Treasury. E-mail sent to FactCheck.org. 23 Feb 2011.