IRS: Obama’s Gestapo That Enforces Obamacare And Attacks Political Enemies

WASHINGTON, D.C. – “Non-profit groups must prepare to fight back [against] the IRS on yet a second front,” warns Cleta Mitchell, a partner in the Washington-based law firm Foley & Lardner LLP, well-known for providing expert legal advise to conservative groups seeking tax-exempt status.

In discussions throughout the Capitol, Mitchell has expressed her concern new rules proposed by the IRS demonstrate once again the Obama administration is determined to keep tea-party groups from having the type of impact on the mid-term elections this November that they had in 2010, when Republicans grabbed majority control of the House of Representatives.

“This is a real assault on the First Amendment rights of American citizens, and we need to do everything we can to stop the IRS from implementing these new rules,” Mitchell says.

She is urging conservatives groups and individuals to file comments with the IRS right away, arguing it is “impractical, burdensome and unacceptable for the IRS to interject itself into the workings of every citizens group in the country.”

The legally constituted function of the IRS, Mitchell argues, is to collect tax revenues, “not to snoop and trample on First Amendment rights of the citizens.”

At stake this November is the possibility conservative tax-exempt groups campaigning for conservative Republican candidates for Congress might increase the Republican majority in the House and grab enough seats in the Senate to topple the current Democratic Party majority, she explains.

The Democrats in Congress appear this year to be particularly vulnerable given the debacle witnessed by the nation in the Obamacare implementation plus increasing economic data that shows job growth slowing, with historic numbers of Americans dropping out of the labor force.

How to file comments opposing IRS proposed rule

Conservative groups or individuals may submit comments electronically opposing the proposed rule changes at Regulations.gov, searching for the citation IRS REG-134417-13, an Internet search that yields a page entitled “Guidance for Tax-Exempt Social Welfare Organization on Candidate-Related Political Activities.”

The proposed rules can be found published in the Federal Register here, again under the title “Guidance for Tax-Exempt Social Welfare Organization on Candidate-Related Political Activities,” dated Nov. 29, 2013.

In a fact sheet Mitchell is distributing to conservatives, Mitchell is advising clients to file comments before the deadline on Feb. 27, 2014, to a series of new regulations the IRS proposes to implement with the goal of making sure conservative organizations with 501(c)4 status are prohibited before the upcoming mid-term elections in November 2014 from any activity associated with supporting a political candidate or influencing the outcome of an election.

“Conservative groups that do not submit comments to the IRS opposing these rule changes before the Feb. 27 deadline will not have standing to participate in the final rule-determination process required by law before the rules are implemented,” Mitchell explained.

Mitchell is encouraging conservative groups and individuals to insist in their filed comments that the IRS must hold public hearings in open forums around the nation before these proposed new regulations are implemented.

IRS war against conservatives

“With these new regulations,” Mitchell argued, “the goal is to restrict the free speech of conservatives in the United States. Progressives tend to focus on process issues, and these new IRS regulations are a direct attempt by the political left to rewrite the rules of political engagement unfairly in their favor.”

Last week, the IRS scandal deepened when the Washington Times reported the Justice Department selected Barbara Kay Bosserman, a DOJ trial lawyer, who had contributed to Obama’s presidential campaigns in 2008 and 2012 as well as to the Democratic Party, to lead the criminal probe into the IRS targeting conservative groups to deny their applications for tax-exempt status.

Mitchell in her discussions with conservative groups has explained the activities the IRS seeks to define as “candidate-related political activities,” subject to taxation and reporting to the IRS, are basic 501(c)4 activities such as grassroots lobbying, candidate forums, candidate debates, voter registration drives, voter guides and issue advocacy.

“The IRS is fully aware this is a war in which conservative groups are being targeted,” Mitchell explains, noting the proposed IRS new rules do not apply to labor unions or trade associations. “The Obama administration is not looking for ways to restrain labor unions from using member dues to conduct similar activities.”

The individual mandate, Obamacare’s requirement that all Americans have health insurance that includes “minimum essential coverage,” has been in effect for two weeks now. No one has noticed because nothing has happened. But it will.

The mandate is the heart of Obamacare; without it, supporters believe, the system won’t work. So the Obama administration hopes millions of Americans will voluntarily comply with the mandate and purchase government-approved coverage. If they don’t do it voluntarily, they’ll be punished.

Starting next year, the government will collect a penalty — the administration calls it a “shared responsibility payment” — from Americans who don’t go along with the Obamacare edict. The penalty starts small — just $95 per adult and $47.50 per child this year — but could conceivably reach thousands of dollars per family per year once the fee scale is fully in effect.

The threat of coercion lies behind the entire Obamacare scheme. The question for the coming year is, how coercive will the government be?

The Democrats who wrote the Affordable Care Act in 2009 gave the Internal Revenue Service power to collect Obamacare penalties. Many Americans are quite familiar with how coercive the IRS can be. Fearing public opposition to IRS threats, the law’s authors forbade the IRS from bringing criminal charges or seizing houses and property from those who don’t buy government-defined “minimum essential coverage.” But Democrats still gave the IRS significant authority.

“Although the Act provides that the IRS may not use criminal prosecutions, notices of federal tax liens, or levies on property to collect an unpaid penalty, the IRS may employ offsets against federal tax refunds,” the Obama administration wrote in its 2012 Supreme Court brief in defense of the mandate. “The IRS also may seek payment through correspondence or phone calls from IRS employees.”

The main leverage the IRS will have is the refund “offset.” That simply means if a taxpayer is due a refund, but has also incurred an Obamacare penalty, the penalty will be subtracted from the refund. So a taxpayer who has a $500 refund coming but incurs a $695 Obamacare penalty will receive no refund.

In addition, that taxpayer might face a letter and a phone call — or a series of them — from the IRS telling him to pay the rest. Anyone who has received a letter or phone call from the IRS knows the experience can be quite intimidating. Or, in the words of the administration’s Supreme Court brief: “Offsets, correspondence, and phone calls are consistently some of the most productive tools in the federal tax collection process.”

Will the government really do that? The answer is not clear, or at least not publicly clear. (In response to inquiries, IRS officials sent boilerplate, non-enlightening clips from IRS publications.) But the administration’s level of aggressiveness will likely be determined by how many Americans voluntarily comply with the law.

Obamacare needs a lot of them to survive. In the last few months, discussion often focused on the prediction that the system needed to enroll seven million people by the time open enrollment is over at the end of March. But even if Obamacare reaches that goal — and it’s doubtful right now — that is just the start. To work, Obamacare must keep growing. A lot.

“I think we’re going to ultimately need about 20 million people for a sustainable pool,” health care analyst Robert Laszewski told the Washington Post recently. “So when I hear people talk about the goal being seven million, I think, ‘time out.’ This needs to be 20 million people within three years.”

How does it get there? Well, if Obamacare is a great deal that millions of Americans love, it will reach the goal with no problem. If, on the other hand, it presents Americans with policies that don’t fit their needs, are too expensive, have cripplingly high deductibles, and narrow choices of doctors — well, many Americans will balk at buying such a product.

It’s not that they will reject health coverage; it’s that they’ll reject health coverage that’s a bad deal.

And if that happens, the question of 2015 will be how far the Obama administration will go to force Americans to buy policies they don’t want. “The government will be hard-pressed to collect a fine on something lots of people don’t believe has value,” says Laszewski. “This is when it will become a huge political albatross.”