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A Project of The Annenberg Public Policy Center

Republican Overreach on IRS

While there has been plenty to find fault with in the revelation that the IRS targeted some tea party groups seeking tax exempt status, some of the Republican rhetoric has been an overreach.

  • Rep. Michele Bachmann falsely claimed that Americans “most personal, sensitive, intimate, private healthcare information is in the hands of the IRS,” while raising the specter that the IRS will misuse that information against “political opponents of this administration.” The IRS will not have access to personal health records.
  • Sen. Rand Paul passed along baseless speculation that “the person running Obamacare” was the one “who wrote the policy” at the center of the IRS controversy. That’s a reference to a former IRS commissioner of the office responsible for tax-exempt organizations who now heads the IRS’ Affordable Care Act office. But a Treasury Inspector General’s report found that employees in the Cincinnati office, not any administrators in Washington, “developed and implemented” the policy in question.
  • Rep. Paul Ryan said that the IG investigators “didn’t look at emails, they didn’t look at intent, they didn’t look who was in the chain of information.” That’s not true. The IG office did look at emails and conducted interviews, and the report made findings about who knew what and when.

Bachmann’s Overreach

Bachmann, who led a House effort to repeal the Affordable Care Act, told ABC News the IRS revelations raise broader concerns about how the IRS may handle people’s medical information under the Affordable Care Act.

Bachmann, May 20: When people realize that their most personal, sensitive, intimate, private healthcare information is in the hands of the IRS that’s been willing to use people’s tax information against political opponents of this administration, then people have pause and they pull back in horror.

But Health and Human Services and IRS officials have repeatedly explained that the IRS will not have access to anyone’s personal medical records.

“The Affordable Care Act maintains strict privacy controls to safeguard personal information,” Health and Human Services spokeswoman Joanne Peters wrote to us in an email. “The IRS will not have access to personal health information. Application for financial assistance will be part of applying for coverage on the Marketplace and will take place in near real time.”

This isn’t the first time we’ve dealt with such a claim at FactCheck.org. Back in November we looked into a claim from the conservative group Americans for Tax Reform that under the health care law, taxpayers will have to disclose “personal identifying health information” to the IRS to prove they have insurance.

Starting in 2014, the health care law requires most Americans to have insurance or pay a tax, although exemptions will apply based on income and other factors. The IRS will require most taxpayers to prove they’re covered or they must pay a tax on their 2014 tax returns.

In congressional testimony in September, then-IRS deputy commissioner Steven Miller made it clear that the IRS will not collect any personal health information.

Miller, Sept. 11, 2012: Taxpayers will get a form at the end of every year from their insurer to use when they prepare their tax returns. It is important to note that the information that insurers provide to the IRS will show the fact of insurance coverage, and will not include any personal health information.

Last year, the IRS proposed the types of information insurers must submit to the IRS in 2015 — and they don’t include personal health details.

The agency proposed asking insurers for the following:

  • The name, address and Social Security Number or Tax Identification Number of the taxpayer and any dependents.
  • Dates the insurer provided coverage.
  • Whether the insurance is considered “qualified” under the law, which means it covers a number of broadly defined health benefits, among other requirements.
  • Whether the individual bought insurance through an affordable insurance marketplace, known as a health insurance exchange.
  • Whether the individual is eligible for tax credits and other assistance to help pay for coverage.

In case there was still any question, Democratic Rep. Jim McDermott asked Miller in a House committee hearing on May 17 whether the IRS would be asking for personal medical records. (accessed via CQ Transcripts)

McDermott, May 17: The IRS can’t access your medical files. Is that true, Mr. Miller?

Miller: Correct, sir.

McDermott: They cannot find out your private medical information.

Miller: That’s correct, sir.

McDermott: Their job in Obamacare is simply to collect … financial information on which a determination is made as to whether somebody can get a subsidy for their premiums. Is that correct?

Miller: Were you covered and over what period is what we would be getting.

Miller is currently the acting IRS commissioner. Treasury Secretary Jack Lew requested his resignation, but Miller remains acting commissioner until his appointment expires June 8, ABC News reported.

Paul’s Unfounded Speculation

In an appearance on CNN’s “State of the Union” on May 19, Sen. Rand Paul also tied the IRS controversy to the health care law, which he referred to as Obamacare.

Paul, May 19: There’s rumors that who wrote the [IRS] policy [to scrutinize tea party and other conservative groups] is the person running Obamacare, which doesn’t give us a lot of confidence about Obamacare.

He’s referring to Sarah Hall Ingram, who served as the IRS’ commissioner for the Tax Exempt and Government Entities Division for a portion of the period under the IG’s review. Ingram is now the director of the IRS’ Affordable Care Act office (so not “running” Obamacare, just overseeing the IRS end).

More importantly, the Treasury Inspector General for Tax Administration’s report makes no suggestion that Ingram “wrote the policy” that resulted in the IRS targeting conservative groups seeking tax exempt status.

The IG’s report concluded the policy, or directive, wasn’t written by administrators in Washington, D.C., but rather, “The Determinations Unit [in Cincinnati] developed and implemented inappropriate criteria in part due to insufficient oversight provided by management. Specifically, only first-line management approved references to the Tea Party in the BOLO [be on the lookout] listing criteria before it was implemented.”

According to the report, Lois Lerner, the IRS’s director of the exempt organizations division — a position under Ingram — “immediately directed that the criteria be changed” once she learned about it in June 2011.

At worst, the report suggests that perhaps Ingram can be criticized for failing to provide management guidance, but not for writing the policy, as Paul suggested.

Further scrutiny of the IRS is coming, but on “Fox News Sunday,” Obama senior adviser Dan Pfeiffer warned that people ought not to jump the gun on Ingram until all the facts are in. The report does not name anyone; only titles were used and her title rarely appears in the 48-page report.

Pfeiffer, May 19: Well, I think first it’s important to note this individual [Ingram] was not named in the inspector-general’s report. No one has suggested she’s done anything wrong yet … The acting commissioner is going to do a 30-day review. And everyone who did anything wrong is going be held accountable.

But I think before everyone in this town convicts this person in a court of public opinion with no evidence, let’s actually get the facts and make decisions after that.

Unless or until further investigation proves otherwise, Paul’s speculation runs contrary to the findings of the IG report.

Ryan’s Misplaced Criticism

Rep. Paul Ryan distorted the facts while making the claim that a real investigation needs to be done to find out how high up the IRS scandal went.

On “Fox News Sunday,” Ryan said the IG investigators “didn’t look at emails, they didn’t look at intent, they didn’t look who was in the chain of information. So, none of that information has been acquired yet.”

It’s a matter of opinion whether the IG investigators were thorough enough, but Ryan underplayed the extent of the IG’s report. In fact, the IG’s investigators did conduct interviews and scrutinize emails, and they attempted to find out how high up the chain the directive regarding the targeting of some conservative groups went.

The report specifically notes that some findings were based on “interviews of EO function employees and our review of EO function e-mails.” Also, most of the sources listed in the “Comprehensive Timeline of Events,” (in Appendix VII beginning on page 31) are listed as emails.

The report also includes a “High-Level Organizational Chart of Offices Referenced in This Report,” (Appendix V, page 29) as well as a detailed timeline whose express purpose was to try to describe who knew what and when.

Again, we take no position about whether further investigation is warranted. But Ryan’s assertion that the IG’s investigators didn’t look at emails or attempt to “look who was in the chain of information” is not accurate.

— Robert Farley and Eugene Kiely