By Nicholas Bagley | The Incidental Economist
What’s the legal basis for the administration’s decision to delay the employer mandate until 2015? Can the IRS just ignore §1513(d) of the ACA, which says the mandate “shall apply to months beginning after December 31, 2013”?
Michael Cannon, among others, thinks not: “the IRS’s unilateral decision to delay the employer mandate is the latest indication that we do not live under a Rule of Law, but under a Rule of Rulers who write and rewrite laws at whim, without legitimate authority, and otherwise compel behavior to suit their ends.”
Strong words. Too strong, as it turns out. The administration hasn’t released its legal justification yet, so I’m speculating here. But the structure of Treasury’s memorandum may provide a clue to its thinking. The memo frames its discussion around Treasury’s delay of the reporting requirements associated with the employer mandate, which are found in §6055 and §6056 of the Internal Revenue Code. Per those requirements, employers must submit tax returns that report on the health-insurance coverage that they do (or don’t) offer their employees. Those returns must be submitted, per §6055 and §6056, “at such time as the Secretary may prescribe.” Delaying the reporting requirements until 2015 is arguably just a specification of the “time” at which the reports must be submitted. (The ACA does contemplate that the reporting requirements would come into force “after December 31, 2013.” But that general effective date should probably give way to the specific instruction that the Secretary can adjust the timeframe.)
So far, so good. Treasury then says that it’d be “impractical” to impose penalties for failing to adhere to the employer mandate because it won’t have the necessary information to do so. Now, that’s not a legal argument. The IRS can’t waive a tax penalty that Congress has imposed on employers just because that penalty is hard to administer.
Read the rest of this column here.
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