Joint Staff Report: Administration Conducted Inadequate Review of Key Issues Prior to Expanding Health Law’s Taxes and Subsidies

February 5, 2014

Key Findings:

-          IRS and Treasury officials expressed concern that there was no authority to interpret federal exchanges as an “Exchange established by the State,” as was necessary to expand the subsidies.

-          The only written explanation by the IRS and Treasury before publishing the rule was a single paragraph with a single reason. The single reason was the entire basis for the IRS’ decision to expand subsides prior to the proposed rule.

-          IRS and Treasury have not provided evidence that they seriously considered the letters and comments made by at least 35 members of Congress who commented on the rule. Officials also did not consider the possibility that the tax credits were intentionally targeted to encourage states to establish their own exchanges.