Treasury Inspector General for Tax Administration
October 24, 2011
TIGTA - 2011-70
Contact: Karen Kraushaar
WASHINGTON--The Internal Revenue Service (IRS) has successfully developed a plan to implement the new tax law provisions included in the Affordable Care Act (ACA), according to a report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).
The ACA became effective in March 2010 and contains $438 billion in revenue provisions that are in the form of new taxes and fees. At least 42 of the ACA provisions add to or amend the Internal Revenue Code, and at least eight require the IRS to build new processes that do not exist in current tax administration. These provisions provide incentives and tax breaks to individuals and small businesses to offset health care expenses. They also impose penalties, administered through the tax code, for individuals and businesses that do not obtain health coverage for themselves or their employees. Other provisions raise revenue to help pay for the overall cost of health insurance reform. TIGTA conducted an audit to assess the IRS Modernization and Information Technology Services (MITS) organization’s planning efforts in implementing the law.
TIGTA auditors found that, early on, the MITS organization realized the vastness of the information technology work required by the ACA. In an effort to meet this challenge, the MITS organization created, staffed, and received funding for a new office called the Associate Chief Information Officer Affordable Care Act Program Management Office (PMO). In addition, the MITS organization obtained approval of the PMO’s charter and prepared a governance plan. This PMO is responsible for ensuring the proper implementation of ACA information technology changes.
“The new Affordable Care Act provisions represent the largest set of tax law changes in 20 years,” said J. Russell George, Treasury Inspector General for Tax Administration. “I commend the IRS for its successful creation of a plan to implement them,” George added.
TIGTA recommended that MITS ensure that the PMO governance plan is updated to include escalation procedures to timely address unresolved issues and critical decisions. IRS management agreed with TIGTA’s recommendation and plans to update the governance plan.
Read the report.
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