* More than 40 tax code changes in health care overhaul
* New IRS chief tries to reassure lawmakers
By Patrick Temple-West and Kim Dixon
WASHINGTON, June 7 The U.S. Internal Revenue
Service, under political fire and distracted by leadership
changes, faces a big job and tight deadlines in months ahead as
one of the main federal agencies implementing President Barack
Obama's new healthcare law.
More than 40 tax code changes were part of 2010's Affordable
Care Act (ACA), the president's signature domestic policy
achievement. Some changes are already in place, but several take
effect in January 2014 and the IRS is still figuring them out.
The task grew more complicated in the past month as the IRS
also faced sharp criticism over agents targeting conservative
political groups for scrutiny; revelations of costly
conferences; and turmoil among senior personnel.
On May 15, Obama fired acting Commissioner Steve Miller
after Cincinnati IRS agents applied extra scrutiny to tax-exempt
status applications from groups with words such as 'Tea Party'
in their names. Miller was replaced by White House budget
official, Danny Werfel.
On Wednesday the IRS suspended Fred Schindler, director of
oversight for implementation of the Affordable Care Act.
Congressional sources said Schindler faces allegations that he
accepted free gifts and food at a costly 2010 IRS conference in
On Thursday, J. Russell George, the U.S. Treasury
Department's Inspector General for Tax Administration, whose
office has played a central role in bringing allegations against
the IRS, warned at a hearing of what lies ahead for the agency.
"The IRS is about to engage in one of the most comprehensive
and unprecedented aspects of its activities in terms of
implementing the Affordable Care Act," he said.
For a factbox of the health care law's tax provisions, see:
SEVERAL BIG JOBS
Under the health care law, the IRS is charged with
collecting tax penalties from employers who fail to provide
insurance coverage and individuals who fail to get coverage.
Some businesses trying to implement the healthcare law are
worried that the upheaval at the agency, said Seth Perretta, a
partner at law firm Crowell & Moring LLP. "You can't help but be
nervous because so much has to get done before 2014," he said.
The IRS must also finish writing certain legal definitions
such as what "minimum value" means for employers' health plans.
Some worker advocacy groups are concerned the IRS might rule
for a minimum value that is too low, leaving workers unable to
waive a bare-bone employer health plan for a federal tax credit
to buy insurance on a new state exchange. Stakeholders have
until July 2 to send comments to the IRS.
The IRS is also finalizing rules for "minimum essential
coverage." Most Americans will face a tax penalty to IRS for
failing to obtain health insurance that meets the minimum
The IRS is also expected to issue guidance soon on new forms
employers and employees must fill out for healthcare purposes.
Werfel on Thursday at a hearing sought to reassure lawmakers
on the IRS's ability to meet its healthcare challenges. "We're
on a path to hit the rest of our key milestones," he said.
(Editing by Kevin Drawbaugh and David Gregorio)