Representative Scott DesJarlais, M.D. (TN-04), along with Chairman of the House Oversight Committee Darrell Issa (CA-49) and Subcommittee Chairman of the Health Care, District of Columbia, Census and National Archives Chairman Trey Gowdy (SC-04), sent a letter to IRS Commissioner Douglas Shulman and Secretary of the Treasury Timothy Geithner, following up on a August 20^th letter requesting documents and communications stemming from a finalized IRS rule related to Obamacare.  This legality of this rule, which may increase federal spending by $500 billion over the next decade, has been challenged by several independent academic and legal experts.

Obamacare creates “premium assistance tax credits” for individuals who enroll in health care “exchanges established by [a] State.” As part of its implementation of Obamacare, the IRS issued a final rule that extended these premium assistance tax credits to individuals purchasing insurance in exchanges established by the federal government—not the state exchanges specified in the statutory language of the law.

The Committee’s August 20th letter sought relevant documents and communications related to IRS’s and Treasury’s process for producing the controversial rule. On October 12, 2012, Treasury sent a reply to the Committee on behalf of IRS. However, Treasury’s response failed to include a single document, memorandum, communication, or email created before the publication of the proposed rule on August 17, 2011.  According to the Committee’s letter, “Treasury did not provide a single piece of evidence to support its claim that IRS complied with the standard process when issuing this rule.  Thus, we must conclude that you are either willfully misleading the Committee or that you are purposefully withholding information that is essential to the Committee’s oversight effort.” 

“While I believe that this IRS rule is a blatant end-around Congress that lacks any supportive legislative history, I had hoped the IRS and Treasury would be able to give explicit details on their collaboration and a legal basis for promulgating this rule,” said Rep. DesJarlais. “Unfortunately, the response we received only mentioned the ‘standard process’ of developing such rules, and failed to provide any actual evidence to this end.”

Rep. DesJarlais continued, “It is my hope that both the IRS and Treasury will honor our initial request and provide us with all documentation. Their continued avoidance of our reasonable request only reaffirms my belief that the IRS and the Treasury’s actions constituted a rewriting of a law masqueraded as a rule - violating the constitutional authority bestowed to Congress.”