Citing “confidentiality interests,” the Treasury Department has turned
down a request from Republicans on the House Oversight and Government Reform
Committee for documents related to an Internal Revenue Service rule that
opponents say improperly allows tax credits on health insurance exchanges run by
the federal government.
Alastair M. Fitzpayne, assistant secretary for legislative affairs at the
Treasury Department, in an Oct. 25 letter said the department had concerns about
the scope of the request.
At the same time, Fitzpayne offered to meet with committee staff to find out
if there were ways the department could satisfy the request without compromising
“These materials implicate longstanding Executive Branch confidentiality
interests,” Fitzpayne wrote. “It is well-established that agency staff and
counsel must have the ability to engage in free, full and unfettered discussions
and debate about important policy and legal matters.”
He added, “Accordingly, as the Executive Branch has long maintained, public
discourse of such material could have a significant chilling effect on agency
staff and could inhibit their ability to fulfill their statutory
In an Oct. 18 letter, House Oversight Committee Chairman Darrell Issa
(R-Calif.), along with Reps. Trey Gowdy (R-S.C.) and Scott DesJarlais (R-Tenn.),
reiterated an earlier committee request for Treasury and IRS documents (206
Specifically, the GOP members sought information about the decision by the
IRS to publish a proposed rule under the Affordable Care Act in August 2011 that
authorized subsidies, or premium tax credits, to help people purchase health
insurance on so-called federally facilitated exchanges (FFEs). The FFEs will be
set up in states that choose not create their own insurance exchanges.
Critics of the rule, which the IRS published in final form in May 2012 (97
HCDR, 5/21/12), contend that Section 1311 of the ACA authorizes tax credits only
on exchanges “created by a state.”
A particular concern of opponents of the IRS rule is that under the ACA small
employers can be subject to penalties if they do not offer health insurance and
their employees obtain premium tax credits on health insurance exchanges,
including those established by the federal government.
Fitzpayne, in his letter to the oversight panel members, said Treasury's
Office of Tax Policy and the IRS Office of Chief Counsel “interpreted the
statutory language in context and consistent with the purpose and structure of
the ACA as a whole, pursuant to longstanding and well-established principles of
At a hearing of the House Oversight Committee in August, IRS Commissioner
Douglas H. Shulman testified that the IRS rule was proper under a comprehensive
reading of the ACA (149 HCDR, 8/3/12).
Also at the hearing, Washington and Lee University law professor Timothy
Jost, who supports the ACA and rule, argued that Congress added a technical
corrections provision to the ACA which included definitions allowing tax credits
The issue is also pending in a federal court lawsuit. In September, the
Oklahoma state attorney general added a claim challenging the IRS rule to an
existing lawsuit challenging the ACA which is pending in U.S. District Court for
the Eastern District of Oklahoma (183 HCDR, 9/21/12).
Gowdy is chairman of the Oversight subcommittee on Health Care, District of
Columbia, Census and the National Archives. In June, DesJarlais sponsored a
joint resolution (H.J. Res. 112) that would repeal the rule.
By Ralph Lindeman
The letter from the Treasury Department is at http://oversight.house.gov/wp-content/uploads/2012/10/10-25-2012-Final-Issa-Letter.pdf.