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IRS EXPANSION
Although it is impossible to know exactly how many new employees the IRS would have to hire
to enforce the individual mandate and other provisions of the Democrats’ health care bill, the
IRS’s own data, plus reasonable assumptions about costs and program responsibilities as
described below, suggest that the number of additional examiners, agents, and other
employees could reach 16,500.
First, assume that the IRS budget would grow by the $10 billion that CBO indicates could be
necessary.10 While there might be some early-year start-up costs to prepare for the added
workload, most of the costs would accrue in the last six years of CBO’s ten-year budget window,
when the individual mandate and other provisions, which present the bulk of the new
enforcement responsibilities, take effect. Thus, for this analysis, assume that $1 billion total will
be spent by the IRS in the first four years to prepare for the mandate with the spending increasing
to $1.5 billion per year in each of the last six years.11
Second, in the last year for which actual IRS data is available, fiscal year 2009, the IRS
employed the equivalent of 92,577 people, nearly half of whom worked directly in examinations
9 IRC sec. 6055(b)(2), as added by H.R. 3590, sec. 1502(a).
10 Congressional Budget Office, “H.R. 3590, Patient Protection and Affordable Care Act,” p. 5 (March 11, 2010).
11 One of the bills’ many shortcomings is that it does not provide for future IRS appropriations that will be necessary
to implement it. Thus, the estimates to follow could vary, up or down, depending on the actual appropriations
provided to the IRS by future Congresses.
and collections.12 In total, the IRS had payroll and benefit expenses of $8.371 billion, implying
that costs per worker were $90,427. If the $1.5 billion in annual funds are used for the payroll
and benefits of a similar mix of employees, the IRS could add more than 16,500 additional
agents, auditors, examiners, and administrative support personnel to enforce large portions of the
nation’s health insurance system.
Some might argue that figure over-estimates the number of employees that would be hired,
because it includes only payroll and benefit costs and does not include other costs that would be
incurred, including office overhead. However, note that the IRS total budget in fiscal year 2009
was $11.708 billion, meaning that, when all costs are included, IRS total spending averaged
$126,474 per employee. Thus, critics of the 16,500 figure might argue that any new employees
should be assumed to cost as much as the average member of the existing workforce and that the
$1.5 billion per year would “only” support hiring slightly more than 11,800 new IRS
employees.13 * * * *