Republicans threaten to subpoena IRS over expanded ObamaCare subsidies

Republican lawmakers are threatening to subpoena Internal Revenue Service documents over claims that the administration improperly expanded the availability of subsidies under the federal health care overhaul.

IRS representatives say the agency has been cooperative. But in a Jan. 29 letter, Reps. Darrell Issa, R-Calif., and Dave Camp, R-Mich., called for "unredacted" documents to be submitted by Feb. 5.

Their concern stems from an IRS decision in May 2012 to extend ObamaCare subsidies to people enrolled in federal government-run exchanges.

The Republicans have claimed that the law permits subsidies only for those enrolled in state-run exchanges -- or marketplaces where tightly regulated insurance plans will be sold starting next year. Because many states have so far refused to set up the exchanges, allowing subsidies in those states is a decision likely to cost billions.

The Republicans claim the IRS had "no authority" to make the decision. Further, Issa says he's asked the IRS for documents four separate times relating to how the government is crafting the law but has been ignored.

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Issa's office has sent letters to outgoing Treasury Secretary Timothy Geithner, Acting Treasury Secretary Neal Wolin and Acting IRS Commissioner Steve Miller. In the letters -- which started being sent last August -- two House committees requested all legal analyses by the IRS which authorizes the agency to grant premium-assistance tax credits in federal exchanges. They also want all documents and correspondence between the IRS and White House employees or any other federal agency referring to or relating to the IRS rule.

The Patient Protection and Affordable Care Act is expected to extend health coverage to more than 30 million Americans. Opponents have complained about compliance costs and accused the government of delaying the release of vital details and rules needed to move forward on the exchanges.

The Treasury Department, though, is defending its decision. An October 2012 letter said the government is allowed to provide subsidies to "individuals who enroll in coverage through either a state-run or a federally-facilitated exchange." The department said nothing in the law suggests "Congress intended ... to limit the availability of the tax credit."

The Treasury Department further told that they have responded to requests and provided the October 2012 letter that seemed to answer many of the questions asked. The department also said it's had numerous conversations with Issa's office on the issue. The letter stops short of providing final wording on the law because it is subject to ongoing litigation in federal court.

On Sept. 19, 2012, Oklahoma's attorney general amended an existing civil lawsuit challenging the Treasury Department's regulations. The suit challenges the IRS' attempt to impose penalties on employers and individuals for not providing or obtaining insurance. The  suit claims the law doesn't allow for penalties in states, like Oklahoma, that don't set up state exchanges.

"We disagree strongly with these claims, and we intend to defend the lawsuit vigorously," Alastair Fitzpayner, Assistant Secretary for Legislative Affairs wrote in his letter to Issa.

The next step, Issa's office says, will be issuing a subpoena for the documents if his office does not receive what it wants.