Treasury Department Upholds Health Care Tax Credit Rule

The Treasury Department, in an October 25 letter to House lawmakers, defended its final regulations to implement a health care tax credit under Sec. 1311 of the Patient Protection and Affordable Care Act (ACA). Treasury Assistant Secretary for Legislative Affairs Alastair M. Fitzpayne responded to a request from House Oversight and Government Reform Committee Chairman Darrell Issa, D-Calif., to explain whether the credit applies to taxpayers who purchase health insurance through insurance exchanges operated by the federal government.

“Treasury regulations implementing Sec. 36B of the code provide that individuals who enrolled in coverage through either a state-run or federally-facilitated exchange are eligible for premium tax credits,” Fitzpayne wrote in the letter.

Issa requested that the Treasury provide additional documents related to its legal interpretation of Code Sec. 36B. Fitzpayne denied that request, maintaining that public disclosure of the Treasury and IRS staff and counsel discussions could inhibit their ability to fulfill their statutory responsibilities. In addition, Fitzpayne wrote that the Treasury regulations promulgated under Code Sec. 36B are the subject of an existing civil lawsuit in the Eastern District of Oklahoma. Questions about the permissibility of the Treasury’s statutory interpretation should be resolved through the judicial process, Fitzpayne wrote.

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