The Internal Revenue Service’s Office of Appeals is already making initial preparations to deal with appeals from taxpayers as a result of various provisions of the health care reform law that are scheduled to take effect in the years ahead.

The Patient Protection and Affordable Care Act was signed into law in March 2010, but many of its most far-reaching provisions are not set to take effect until 2014, including controversial requirements for individuals to buy health insurance coverage and large businesses to provide it to their employees.

Other requirements impose taxes on medical device makers and the operators of tanning salons. The IRS has been tasked with overseeing a number of requirements, including the provision of tax credits to help individuals and small businesses pay for health insurance coverage. Some of those tax credits have already gone into effect, although their popularity has fallen short of initial projections due to stiff requirements and the complexity of applying for them.

A new report from the Treasury Inspector General for Tax Administration found that the IRS is preparing for appeals to various provisions of the law, although it believes the health care reform law’s impact on the IRS’s Office of Appeals will be minimal until after next year.

The Affordable Care Act contains $438 billion in revenue provisions in the form of new taxes and fees, the report noted, and at least 42 of the ACA’s provisions add to or amend the Tax Code.

The IRS ACA Office determined that the new law’s impact on Appeals would be minimal until after Calendar Year 2013, according to the report, but the Office of Appeals expects that the new law will result in new Appeals cases over the next several years. 

TIGTA auditors found that the Appeals Office has taken some initial actions to begin preparing for the new health care law, including detailing some Appeals staff to the IRS’s ACA Office and creating an internal Web site with links to IRS ACA-related training, guidance, and other resources.

“Because of the potential for the ACA to affect most taxpayers, effective planning is critical to ensuring Appeals’ readiness to prepare for this legislation and resolve taxpayer requests in a timely and effective manner,” said TIGTA Inspector General J. Russell George in a statement.

As the Appeals office moves forward with its planning efforts, TIGTA said it believes management at the office should develop a more formal approach to its ACA planning activities to ensure they are ready to resolve taxpayer requests of ACA-related issues in a timely and effective manner. This should include outlining the key objectives and tasks that need to be addressed to prepare for the ACA-related impact on Appeals, establishing who should be responsible for conducting these activities, and developing timelines for completing these actions over the next several years.

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