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So when does the IRS make laws? re: obamacare

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rudder

Lifer
Nov 9, 2000
19,434
84
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So with obamacare came exchanges. Obamacare was written in such a way that only state run exhanges were allowed to pay subsidies. the IRS said that not allowing the federal exchange to pay subsidies was an unintentional omission from the law.

Some argue that the omission was intentional so the governors of states not setting up exchanges would be in the hot seat if they did not set up an exchange within their state. This omission prevents the IRS from collecting the $2000 per worker fines for companies that choose to not use the federal exchange if their state does not have one. At least 30 states will not create exchanges.

So the IRS bypassed congress and changed the law.

So the authors of the obamacare bill say the intent to have that provision for IRS to fine was there. But it wasn't in the bill that was passed.

I would give you a link, but MSM is apparently ignoring this huge deal.

for the link freaks here you go:

http://oversight.house.gov/hearing/irs-enforcing-obamacares-new-rules-and-taxes/

The IRS will be answering questions on how they feel it was in their right to re-write a law.
 

Lithium381

Lifer
May 12, 2001
12,458
2
0
is this how they asked questions and requested documents from Eric Holder? Wonder if Obama is going to initiate executive privilege on this one, too
 

rudder

Lifer
Nov 9, 2000
19,434
84
91
Wonder if Obama is going to initiate executive privilege on this one, too
This small tid bit could crush obamacare. Either the administration does a run around congress and changes the PPACA or there will be a lot of companies not paying for insurance and not getting fined by the IRS.

I guess Nanxy Pelosi should have let everyone read the bill in its entirety before if was voted into law.
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
Staff member
Oct 30, 2000
42,591
5
0
Congress knew that there were a lot of TBDs to be filled in.
 

Wreckem

Diamond Member
Sep 23, 2006
9,316
765
126
Because the body of administrative law likely allows them to do it. Or thats what they are trying to do. Interpret the body of admin law to allow them to do this.
 

rudder

Lifer
Nov 9, 2000
19,434
84
91
Because the body of administrative law likely allows them to do it. Or thats what they are trying to do. Interpret the body of admin law to allow them to do this.
This item was left out intentionally (according to some pundits... I can share the link to the 443 page transcript of testimony if you want to check it out.) There is no administrative interpretation that allows the IRS to change the PPACA. The IRS simply changed the law that congress enacted.

I think some democrats are trying to claim it was a drafting error and the intent was there. The supreme court has already ruled in other cases that such drafting errors are not justification enough to rewrite the statute. Again supposedly some democrats in 2009 testimony admitted this was left out on purpose.

(it is buried in here somewhere http://www.finance.senate.gov/hearings/hearing/download/?id=c6a0c668-37d9-4955-861c-50959b0a8392 )
 

Pr0d1gy

Diamond Member
Jan 30, 2005
7,775
0
76
You mean our government agencies are above the law and can do whatever they feel like? No way....



:p
 

Fern

Elite Member
Super Moderator
Sep 30, 2003
26,907
173
106
It is just a schedule of when the IRS is going to have to answer questions to Darrell Issa about they rewrite of the law they did.

Here is a little more info

http://taxprof.typepad.com/taxprof_blog/2012/07/adler-cannon.html
Thanks. This is indeed interesting.

I've only read a few brief legal blurbs about this, but it looks like Obamacare may have some serious statutory flaws, particularly the reference in section 1401 to section 1311 (when a tax credit is permitted).

I'm curious to see how the IRS thinks they can overcome such shortfalls with regulations/rulings. They have never fared well attempting to do so when the statute is so clear on its face. Of course, until this is looked by more (legal) people it's hard to know what might be really 'clear' about the statute in the first place.

But if it truly is a problem, good luck getting a technical corrections bill passed.

Fern
 
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Jhhnn

No Lifer
Nov 11, 1999
62,009
14,176
136
So with obamacare came exchanges. Obamacare was written in such a way that only state run exhanges were allowed to pay subsidies. the IRS said that not allowing the federal exchange to pay subsidies was an unintentional omission from the law.

Some argue that the omission was intentional so the governors of states not setting up exchanges would be in the hot seat if they did not set up an exchange within their state. This omission prevents the IRS from collecting the $2000 per worker fines for companies that choose to not use the federal exchange if their state does not have one. At least 30 states will not create exchanges.

So the IRS bypassed congress and changed the law.

So the authors of the obamacare bill say the intent to have that provision for IRS to fine was there. But it wasn't in the bill that was passed.

I would give you a link, but MSM is apparently ignoring this huge deal.

for the link freaks here you go:

http://oversight.house.gov/hearing/irs-enforcing-obamacares-new-rules-and-taxes/

The IRS will be answering questions on how they feel it was in their right to re-write a law.
30 states? Really? That's more frothy conjecture than anything else.

It is just a schedule of when the IRS is going to have to answer questions to Darrell Issa about they rewrite of the law they did.

Here is a little more info

http://taxprof.typepad.com/taxprof_blog/2012/07/adler-cannon.html
Issa, the grand witch hunt inquisitor, huh?

Obviously, those who feel that they're negatively affected are free to sue, other than the people who'd benefit from exchanges that their state govts refuse to set up... In states where the electorate is most strongly indoctrinated, they'll keep right on getting screwed, proud to be ignorant the whole while.
 

sactoking

Diamond Member
Sep 24, 2007
6,918
1,750
136
Yeah, pretty much everyone I've spoken to has said this is a non-issue, and I speak to people who are in charge of putting this thing together.

§1401(b)(2)(A) refers to tax credits for someone in an Exchange "established by the State under 1311 of the Patient Protection and Affordable Care Act". People have looked at that and said "Hey, if my state doesn't establish an Exchange and the Fed does it then it's not a state Exchange under §1311 and credits don't apply!"

The problem is that §1311(b)(1) says that "[e]ach State shall... establish an American Health Benefit Exchange for the State". The key here is shall; in legislative construction that means a mandate. Technically a state cannot opt to forgo the Exchange without being in violation of the ACA. Since that is a non-negotiable legislative item it is not improper for the remainder of the text of the bill to be written using language that presumes compliance. In this case, since states MUST create an Exchange, for §1401(b)(2)(A) to presume that a state Exchange is in existence and not contemplate a Federal exchange is, in fact, the proper construction of the law.

Also, this can't be legally challenged until 2014. Since it is a tax provision the most direct route to a challenge will be in January 2014 when someone whose employer drops coverage gets a subsidy on the individual exchange, the Fed charges the subsidy back to the employer, and then the employer sues under the premise that the employee wasn't entitled to the subsidy. The public relations backlash over that will be quite horrible.
 

DucatiMonster696

Diamond Member
Aug 13, 2009
4,269
1
71
This small tid bit could crush obamacare. Either the administration does a run around congress and changes the PPACA or there will be a lot of companies not paying for insurance and not getting fined by the IRS.

I guess Nanny Pelosi should have let everyone read the bill in its entirety before if was voted into law.
FTFY
 

Jhhnn

No Lifer
Nov 11, 1999
62,009
14,176
136
Yeah, pretty much everyone I've spoken to has said this is a non-issue, and I speak to people who are in charge of putting this thing together.

§1401(b)(2)(A) refers to tax credits for someone in an Exchange "established by the State under 1311 of the Patient Protection and Affordable Care Act". People have looked at that and said "Hey, if my state doesn't establish an Exchange and the Fed does it then it's not a state Exchange under §1311 and credits don't apply!"

The problem is that §1311(b)(1) says that "[e]ach State shall... establish an American Health Benefit Exchange for the State". The key here is shall; in legislative construction that means a mandate. Technically a state cannot opt to forgo the Exchange without being in violation of the ACA. Since that is a non-negotiable legislative item it is not improper for the remainder of the text of the bill to be written using language that presumes compliance. In this case, since states MUST create an Exchange, for §1401(b)(2)(A) to presume that a state Exchange is in existence and not contemplate a Federal exchange is, in fact, the proper construction of the law.

Also, this can't be legally challenged until 2014. Since it is a tax provision the most direct route to a challenge will be in January 2014 when someone whose employer drops coverage gets a subsidy on the individual exchange, the Fed charges the subsidy back to the employer, and then the employer sues under the premise that the employee wasn't entitled to the subsidy. The public relations backlash over that will be quite horrible.
There you go, pissing in their punchbowl, again.

And they were frothing up such a nice head on it, too...
 

sactoking

Diamond Member
Sep 24, 2007
6,918
1,750
136
An (sloppy) example of my previous post would be language like this:

Every person in this State wishing to operate a motor vehicle on a public roadway must first obtain an Operator's License from the Department of Motor Vehicles. Any person so Licensed must also maintain a policy of liability insurance with minimum coverages of at least $15,000 per person and $30,000 per occurrence for personal injury and $10,000 per occurrence for property damage.
In that example (that I made up) you have a similar logical fallacy: the law says you have to be licensed to drive and if you are licensed you have to have insurance, but if you drive without a license you don't have to have insurance. I would venture that 100 times out of 100 a court would look at that and say the intent was clear and violating the licensure law does not grant carte blanche to violate the insurance law.
 
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