A 2.3 percent excise tax on medical devices that took effect in January has failed to live up to expectations, and an audit blames the Internal Revenue Service (IRS) for botching its implementation.
A report by the Treasury Inspector General for Tax Administration (TIGTA) says the tax has so far brought in only $913.4 million out of a projected $1.2 billion for the first two quarters of 2014. J. Russell George, the inspector general, says the IRS needs to do a better job of identifying medical device manufacturers and then insuring that they pay the excise tax on all sales of medical devices.
The IRS blames this — and all its other woes — on insufficient funding from Congress, which cut the agency's budget from $12 billion in 2013 to $11.2 billion this year. Some in the House of Representatives counter that, while the IRS shouts underfunding, it still somehow is able to find $63 million to award in bonuses.
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