IRS failed to account for $67 million in ‘indirect’ Obamacare implementation costs

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A report issued by the Treasury Inspector General for Tax Administration (TIGTA) reveals just how unprepared the Internal Revenue Service is to manage the costs of implementing Obamacare.

The IRS is one of the key agencies responsible for the implementation and enforcement of Obamacare. From Fiscal Year 2010 to FY 2012 the IRS received $488 million from the Health Insurance Reform Implementation Fund (HIRIF) — managed by the Department of Health and Human Services — to cover costs incurred to implement the president’s signature health care law.

According to TIGTA, some of the IRS’s Obamacare implementation costs were inaccurate or not properly tracked.

“Specifically, we found that costs charged to HIRIF funding relating to direct labor were sometimes inaccurate and not always substantiated by reliable supporting documentation,” the TIGTA audit reads.

“We also found that the IRS did not track all costs associated with implementation of the ACA, including costs not applied to the HIRIF,” the audit continued. “Specifically, the IRS did not account for or attempt to quantify approximately $67 million of indirect ACA costs incurred for FYs 2010 through 2012.  Indirect costs include, for example, providing employees with workspace and information technology support.”

According to the report, “This lack of complete information on ACA implementation costs limits the IRS’s ability to accurately report to stakeholders the total resources it applied to the ACA implementation and fully estimate the resources needed in the future for this effort.“

The TIGTA notes that, while Obamacare implementation is ongoing, the IRS does not expect to be receiving anymore funding from HIRIF.

“It therefore continues to remain critical that the IRS develop complete and reliable estimates for all costs associated with the implementation of the ACA and accurately track and report on actual costs devoted to this effort,” the report reads.

The TIGTA offered three recommendations focused on limited errors and improving documentation requirements, all three of which the IRS agreed with.

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