The Internal Revenue Service will have to work hard to protect the federal tax data sent to the exchanges.
That new challenge is hitting the IRS as tight budgets have forced the agency to implement a hiring freeze, reduce customer service and enforcement activities, and make employees take three unpaid furlough days.
J. Russell George, the inspector general for tax administration at the U.S. Treasury Department, has included those observations in an assessment of the challenges that will face the IRS in fiscal year 2014, which started Oct. 1.
George, who prepared a similar assessment a year ago, addressed the new report to the Treasury Secretary Jack Lew.
A year ago, George ranked PPACA implementation fourth on a list of the top 10 IRS vulnerabilities. He ranked security for taxpayer data and employees first, tax compliance initiatives second, and modernization third.
This year, only security for taxpayer data and employees ranks higher than PPACA implementation.