Lungren introduces bill to repeal hidden Obamacare tax authority

Rep. Dan Lungren (R-CA) is introducing legislation to repeal vast new authority for the IRS hidden deep in President Obama’s health care law.

Lungren said the Obamacare requirement in question would put an “unprecedented burden” on small businesses in his district, according to his prepared remarks. Calling his bill the Small Business Paperwork Mandate Elimination Act, Lungren is proposing to rescind the requirement.

At issue is section 9006 in the health care law. As reported by The Daily Caller, that provision will require many businesses for the first time to report to the IRS every expense they incur over $600. The section’s purpose is to squeeze more and more tax dollars from businesses to eliminate the so-called “tax gap” – bureaucratese for every red cent Americans owe the IRS but don’t pay up come April 15.

Lungren noted that experts estimated the provision would increase tax revenues by $17 billion annually.

Right now, businesses must report the wages they pay employees. But they are exempt from reporting payments to other businesses and for merchandise.

Even small businesses can easily incur thousands of business expenses over $600 each year. Critics say the requirement will inundate businesses with new red tape and cost them huge sums preparing paperwork.

“This is an enormous and costly new paperwork burden that likely hit about every business, regardless of how small,” Sen. Kit Bond (R-MO) said in a December floor statement about the section.

A Democratic aide who spoke on the condition of anonymity said Sen. Max Baucus (D-MT), chairman of the pivotal finance committee, was a key backer of including the section in the health care law.

The aide defended the provision as a “voluntary” way of increasing tax revenues without raising tax rates, adding that then President George W. Bush’s administration supported the requirement.

“Voluntary information reporting improves tax compliance without raising taxes on small businesses, which is why Presidents . . . Bush and Obama both proposed similar policies to this one,” the aide said.