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IRS chief says may face budget crunch on Obamacare rollout

John Koskinen testifies before a Senate Finance Committee confirmation hearing on his nomination to be commissioner of the Internal Revenue
John Koskinen testifies before a Senate Finance Committee confirmation hearing on his nomination to be commissioner of the Internal Revenue

By Patrick Temple-West

WASHINGTON (Reuters) - The U.S. Internal Revenue Service may need to spend money on its Obamacare implementation at the expense of other agency programs due to budget constraints, its new commissioner said on Monday.

John Koskinen, sworn in on December 23 to lead the tax agency, did not elaborate on what programs might suffer to ensure full funding for the IRS's numerous jobs in putting into effect President Barack Obama's Affordable Care Act (ACA) of 2010.

Koskinen said the IRS' role in implementing the ACA has so far been glitch-free. More work is coming for the agency in early 2015, when Americans will start reporting healthcare compliance information to the IRS, he said.

"The ACA program will be funded ... If our budget continues to shrink other things may have to go by the wayside," he told reporters at the IRS headquarters in Washington.

Known as Obamacare, the ACA includes dozens of tax code changes. IRS watchdogs have previously said the agency was struggling to keep up with its ACA responsibilities.

The IRS' budget and staffing have been cut by Congress in recent years. "I hope that one of my legacies ... as IRS commissioner will be that we put the agency's funding on a more solid basis," Koskinen said.

He joined the IRS as it recovers from its worst scandal in years. In May, an IRS official apologized for what she termed improper scrutiny of conservative political groups applying for tax-exempt status, triggering investigations.

Koskinen said another of his top priorities "is to put to rest all of the issues and concerns surrounding applications for tax-exempt status ... We hope we're in the home stretch" of the investigations. He said he will soon meet Republican lawmakers to discuss these issues.

(Editing by Kevin Drawbaugh and Cynthia Osterman)

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