The IRS will also decide who is, and who is not, eligible for Obamacare’s subsidies. The law authorizes the IRS to share confidential taxpayer information with the Department of Health and Human Services for the purpose of determining those subsidies. And since subsidies don’t just apply to a relatively small number of the nation’s poorest citizens — under the law, they can go to a family of four with a household income of nearly $90,000 — they will affect a huge segment of the population.
In addition, the IRS will keep track of even the smallest changes in Americans’ financial condition. Did you get a raise recently? You’ll need to notify the IRS; it might affect your subsidy status. Have your hours been reduced at work? Notify the IRS. Change jobs? Same.
Last August, IRS official Nina Olson testified before Congress on the changes Obamacare will bring to Americans’ dealings with the nation’s tax collector. “Do you believe that most Americans are going to update the IRS or state exchanges when they change jobs, get married, move states, whatever?” Michigan Republican Rep. Tim Walberg asked Olson.
“I think it’s going to be a very great learning curve,” Olson answered. If Americans don’t keep the IRS up to date on their financial status, they might incur penalties, which the IRS will collect by withholding income tax refunds. “I think it will be a surprise to taxpayers if they don’t update their information,” Olson said.