IRS Is Playing By It's Own Rules

The IRS is acting like a rogue agency with little regard for the rule of law, but you already knew that. 

What may interest you is that I'm not talking about the targeting of 501(c)4's that have the word tea party, conservative, or 9/12 in their name. 

"You must mean the medias scant coverage to its theft of 60 million medical records, now the subject of a class action lawsuit." you say.

"Yup, that's not being covered a whole lot." I reply. "But that's still not what I'm concerned about." 

What is scaring me is that the press have been all but silent regarding the highly illegal IRS scheme to fund Obamacare’s federal insurance exchanges.

In states such as my dear sweet Iowa, we are still in the works for creating one of the exchanges to allow people to purchase a healthcare plan as part of the Affordable Care Act (ACA), also known as Obamacare.  Many states are outright refusing to set these state level exchanges up since the Supreme Court ruling that a states medicaid reimbursements from the federal government can not be tied to a states creation of just such an exchange or expansion of medicaid benefits. It's because of this little factoid that a year ago, the IRS finalized a regulatory ruling to the effect that it will issue tax credits through Obamacare’s federal insurance exchanges. 

Why is that such a big deal? Well, much like when Spike Lee tries to call a technical at a Knicks game, the IRS has been granted no legal authority, by the Affordable Care Act (PPACA) or any other act of Congress, to issue such credits. In fact, the ruling flouts the explicit language of Obamacare.

The ACA law stipulates that all such assistance must emanate from state-run exchanges. Even if the federal government sets up an exchange in a state that has declined to do so, it wouldn't be authorized to issue tax credits. And because 27 states have refused to set up exchanges, this restriction will cripple Obamacare. Without the ability to dole out tax credits and subsidies in more than half of the states, the Beltway bureaucrats attempting to implement the much-despised “reform” law will be hamstrung.

The estimated tab for this little administrative ruling, according to testimony given to the House ways and means committee by the president of the Tax Foundation, could be in the ballpark of $800 Billion dollars. Or, about $254 a second. Also take a moment to notice the date that this near trillion dollar abuse of power by the IRS was published. A shame that the country was distracted so on that day. Chris Mathews would call this coincidence racist.

This is obviously an unprecedented and dangerous power grab. And it gets worse, this arbitrary IRS rule will allow it to tax employers whom Congress did not authorize the agency to tax. Just as Obamacare stipulates that tax credits can only be issued through state-run exchanges, it also says that employer mandates can only originate from these entities. Therefore, the IRS isn’t legally authorized to fine non-compliant businesses in a state that has refused to set up an exchange.

Yet it clearly intends to do so. As it did with the tax-exempt applications of conservative groups and the confidential medical records of millions of U.S. citizens, the IRS plans on going rogue. Even Jar Jar Binks would hesitate to call in granting this kind of power to a group of unelected bureaucrats. And, because of the harm this feature of the rule will inflict on many businesses, it has generated several lawsuits. The most promising of these was filed last month in the U.S. District Court for the District of Columbia by a group of small businesses challenging the rule as an extralegal expansion of Obamacare.

The IRS is one of the most powerful agencies in the unelected and largely unaccountable fourth branch of the U.S. government, otherwise known as the administrative state. Most of the civil servants working in the various monuments to the bureaucracy around the country are honorable and earnest, even in Cincinnati, and in many ways there are some good aspects to Obamacare. This, along with the Tea Party scandal and leaking of medical records is more broadly symptomatic of the fundamental flaws inherent to the modern size and scope of our federal government. Its unyielding desire to have a say in every aspect of our lives comes with an insatiable need for revenue and tax collection enforcement. The result is a supremely powerful IRS. Any entity as large as the IRS will have bad apples. The problem is that the IRS’s authority empowers a bad apple to have a loud booming voice in the way that countless American taxpayers live their daily lives.