It’s impossible to play by the rules when you don’t know the rulebook.

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As ObamaCare’s taxes go into effect, the Internal Revenue Service’s role in enforcing the controversial health care law is getting more attention.

The reviews so far aren’t encouraging.

In mid-August, the Treasury Inspector General for Tax Administration (TIGTA) published a report critical of the IRS’s failure to accurately assess and collect ObamaCare’s medical device tax.

The most glaring problem for the agency is its failure to give proper guidance to businesses now required to pay an excise tax of up to 2.3 percent of the sales price for every medical device sold.

For context, ObamaCare’s medical device tax is estimated to raise $20 billion between 2013 and 2019.

The tax is collected by the business, and must be paid quarterly on something called a Form 720.

Since the medical device tax is new, the IRS decided to waive “failure to deposit” penalties for the first three quarters of 2013 – the year the tax became operative – if the business showed a good faith effort to comply.

However, no one apparently told the IRS staff members actually responsible for collecting the device tax revenue, because the agency “erroneously assessed 219 FTD penalties… totaling $706,753 against businesses” making good faith efforts to comply.

To its credit, the IRS reversed 133 of the 219 penalties by January 8, 2014. But it took TIGTA auditors drawing attention to the remaining 86 before the agency dropped those as well.

Besides failing to regulate coherently, the IRS also botched Form 720. In the 2013 version, there was no decimal point separating dollars from cents. Thirty-eight percent of the forms reviewed by TIGTA “contained a sales price amount with a decimal that was likely excluded, misplaced, or missed during the processing of these tax returns.”

The following example is typical.

Taxpayer A enters taxable sales as $1234567 without a comma or decimal point. During tax return processing, an IRS tax examiner enters this amount as $12,345.67; however, the actual taxable amount was $1,234,567.

Because of this and other practices traceable to the IRS, TIGTA “identified medical device excise tax discrepancies totaling almost $117.8 million…” 

The IRS is doing no better when it comes to implementing the employer mandate.

After delaying the mandate twice, the Obama administration is pushing ahead with plans to require large employers – those with 100 or more full-time employees – to offer government-defined “affordable” health insurance beginning in 2015. Failure to comply results in a $2,500 per employee penalty – now called a “tax” thanks to the Supreme Court.

But even with all the extra time to develop a reporting procedure, the IRS only recently published drafts of the forms companies must use to comply with the mandate.

Business groups are outraged.

“The IRS only released draft forms, with no instructions or technical specifications,” Christine Pollack, vice president of Government Affairs at the Retail Industry Leaders Association, said in a statement. “For the longest time, retailers have been pounding their heads, asking for this information from the IRS in order to get their systems up and running and comply with these requirements beginning this January. Yet again, it’s too little, too late for employers.”

It’s impossible to play by the rules when you don’t know the rulebook. If the TIGTA report is any indication, the IRS might try to buy itself some time by waiving penalties for non-compliance when it comes to enforcing the employer mandate. While one might justify this as an act of fairness toward firms attempting to comply with an incoherent regulation, it also highlights how easy it is to set aside the rule of law to save face politically.

From the glitch-filled rollout of Healthcare.gov to the ongoing failure to verify income statements for those claiming subsidies, ObamaCare continues to be an administrative train wreck.

And, due to its role as tax-collector-in-chief, the IRS will be at the center of the chaos.