Judicial Watch: Documents Show HHS Used IRS to Push Obamacare, Use of Confidential Taxpayer Information Raises Legal Questions

IRS/HHS Coordinated with Obama White House Behavioral Sciences ‘Team’

(Washington, DC) – Judicial Watch today announced it received two production of documents, 77 pages and 108 pages, from the Internal Revenue Service (IRS) revealing the Obama IRS coordinated with the Department of Health and Human Services (HHS) and the Obama White House Behavioral Sciences “Team” in a $5 million program to pressure Americans to sign up for Obamacare. The documents also contain inter-agency agreements between the IRS and the Centers for Medicare and Medicaid Services (CMS) devised to circumvent potential legal prohibitions on unauthorized disclosure or inspection of taxpayer information collected by the IRS.

The documents were produced under court order in an April 2017 Judicial Watch Freedom of Information Act (FOIA) lawsuit against the IRS and HHS filed after agencies failed to respond to November 2016 FOIA requests for:

• All records concerning IRS efforts to reach out to individuals who either claimed an exemption or paid a penalty for failing to purchase mandatory health insurance under the Patient Protection and Affordable Care Act. Such records include, but are not limited to, communications, policies, and procedures pursuant to such efforts;

• Samples of any letters, notices or other materials prepared and/or sent to taxpayers encouraging the purchase of mandatory health insurance; and

• Any records regarding cooperation between IRS and the Department of Health and Human Services or any other government entity, whether state or federal, regarding efforts to reach out to individuals who have not purchased mandatory health insurance. Such records, include, but are not limited to, communications, agreements, memoranda of understanding, and any other inter-agency communications. Of special interest are any such records regarding the sharing of protected taxpayer information.

In September 2016, IRS Director of Individual Taxation Janet McCubbin writes to several of her colleagues:

Attached are drafts of the letters that IRS will send to selected taxpayers who paid a penalty for failure to have coverage or who claimed an exemption form the coverage requirement for tax year 2015 … As you know, we are planning to send several different versions of the letter to see which types of messages work best.

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These letters have been drafted with input from the White House Behavioral Sciences Team and CMS, and have been approved by CMS. And IRS staff provided a lot of assistance on the PDF.

The White House Behavioral Sciences Team was established in 2015 by an Obama Executive Order directing federal agencies to adopt research about how people make decisions into policy development.

The documents show that the agencies spent at least $5 million to develop the letters ($4,820,702.83 and $179,297.17).

The documents released by Judicial Watch include letters targeting people who legally refused to sign up for Obamacare and elected to pay the penalty or individuals who claimed an exemption. The letter written to people who claimed an exemption states:

Why am I getting this letter?

The law requires people to have a minimum level of health coverage, quality for an exemption, or pay a penalty when they file their taxes.  Our records show you claimed an exemption from the health coverage requirement when you filed your 2015 taxes.  If you or someone in your family doesn’t have health insurance or an exemption next year, you’ll likely owe a penalty for 2017.  We are writing to make sure you know how you can avoid this penalty by signing up for health insurance or getting an exemption.

A document labeled “a privacy/legal question” seems to indicate the Obama administration was concerned its target letter might violate the law (26 U.S. Code § 7431 and 26 U.S. Code § 6103) protecting the confidentiality of taxpayer return information:

Inspection or disclosure by employee of United States

If any officer or employee of the United States knowingly, or by reason of negligence, inspects or discloses any return or return information with respect to a taxpayer in violation of any provision of section 6103, such taxpayer may bring a civil action for damages against the United States in a district court of the United States.

Under the Obamacare laws, HHS is authorized only to send a simple notification of options:

Secretary of the Treasury, acting Through the Internal Revenue Service and in consultation with the. Secretary of Health and Human Services, shall send a notification to each individual who files an individual income tax return and who is not enrolled in minimum essential coverage …

HHS may have overstepped its authority by threatening people with penalty fees.

How much will my penalty be next year if I don’t sign up?

The penalty for not having any health-coverage or an exemption in 2017 will be at least $695 per adult and $347 per child (up to $2,085 per family), and could be more, depending on your income.

Also, the “best-case” cost estimate for Obamacare is misleading because it neglects to mention the cost of deductibles and co-payments.

How much does health insurance at HealthCare.gov cost?

Most people who enroll in a plan through HealthCare.gov can find plans for $75 a month or less after financial help.

Today’s release of documents is part of five promised document productions from the IRS in this case. The IRS expects to complete production of the records found to date (about 6,000) by January 24, 2018. However, the agency anticipates that another several thousand documents will be found during the remainder of the search, which will extend the final production deadline to the spring/early-summer months.

“So now we have more evidence of more Obama IRS abuses targeting innocent Americans – all in the name of Obamacare,” said Judicial Watch President Tom Fitton. “No wonder it took a federal lawsuit and court order to get these documents—as they show the Obama White House and its agencies were happy to threaten and treat Americans like lab rats in order to bolster Obamacare.”

The documents were produced in Judicial Watch Inc. v. Internal Revenue Service and U.S. Department of Health and Human Services (No. 1:17-cv-00615).

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