One plus for taxpayers is that the IRS doesn’t have some of its usual tools to enforce the law. Congress prohibited the tax agency from using liens and levies to make people pay the individual mandate. The IRS can still reduce refunds.
The IRS is also going to be shorthanded this year, which will mean less customer service and less enforcement.
The administration says the Obamacare changes shouldn’t complicate things for most taxpayers and is directing people to the IRS and Health and Human Services websites for information.
“For the vast majority of Americans, tax filing under the Affordable Care Act will be as simple as checking a box to show they had health coverage all year,” Treasury Secretary Jacob J. Lew said in a statement. “We are working to ensure that whatever their experience, consumers can easily access clear information since this is the first year they will see certain changes to their tax returns.”
Budget Cuts
The IRS budget is $10.9 billion this year, down 3 percent from last year and 12 percent below what the administration requested.
The tax agency also must continue working on a problem it has struggled with for several years -- criminals who steal others’ refunds through identity theft.
That’s especially an issue early in the tax season, when criminals can file tax returns and get refunds before legitimate taxpayers even know what happened.
The IRS has taken steps to address identity fraud, including on the number of refunds that can be sent to a single bank account or prepaid debit card.
“They have a much better handle on it, but it is still a problem,” said Edward Karl, vice president for taxes at the American Institute of Certified Public Accountants.