Abstract
The Patient Protection and Affordable Care Act (PPACA) provides tax credits and subsidies for the purchase of qualifying health insurance plans on state-run insurance exchanges. Contrary to expectations, many states are refusing or otherwise failing to create such exchanges. An Internal Revenue Service (IRS) rule purports to extend these tax credits and subsidies to the purchase of health insurance in federal exchanges created in states without exchanges of their own. This rule lacks statutory authority. The text, structure, and history of the Act show that tax credits and subsidies are not available in federally run exchanges. The IRS rule is contrary to congressional intent and cannot be justified on other legal grounds. Because tax credit eligibility can trigger penalties on employers and individuals, affected parties are likely to have standing to challenge the IRS rule in court.
Document Type
Article
Publication Date
Spring 2013
Publication Information
23 Health Matrix 119-195 (2013)
Repository Citation
Adler, Jonathan H. and Cannon, Michael F., "Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA" (2013). Faculty Publications. 2302.
https://scholarship.law.wm.edu/facpubs/2302
Included in
Administrative Law Commons, Health Law and Policy Commons, Taxation-Federal Commons, Tax Law Commons