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02/27/2018

17 Groups Urge Trump Administration to End Unlawful IRS Practice of Dodging Oversight

Washington, D.C. – Cause of Action Institute (“CoA Institute”) today led a coalition of 17 organizations in sending a letter to President Trump and senior administration officials urging them to hold the IRS accountable by working to end the agency’s practice of dodging oversight of its rules.

CoA Institute recently issued an investigative report titled Evading Oversight: The Origins and Implications of the IRS Claim That Its Rules Do Not Have an Economic Impact, detailing how the IRS created and expanded a series of self-bestowed exemptions from three important regulatory oversight mechanisms.  The IRS created these exemptions by claiming that the economic effects of its rules flow from the underlying statute and not its regulatory choices.

The letter states:

This IRS practice denies Congress information about IRS major rules that should be reported to the Government Accountability Office under the Congressional Review Act.  It also hinders the White House’s ability to fulfill its constitutional obligation to supervise the Executive Branch by conducting oversight of IRS regulations pursuant to Executive Order 12,866.  And it impacts the public’s right to learn about and comment on the economic impact of the IRS rules that are subject to the Regulatory Flexibility Act… The IRS should live by the same rules of administrative law and agency oversight as the rest of the Executive Branch.

The letter was sent to President Trump, Secretary of the Treasury Steven Mnuchin, Office of Management and Budget (“OMB”) Director Mick Mulvaney, and Office of Information and Regulatory Affairs (“OIRA”) Administrator Neomi Rao.

The letter urges the Department of the Treasury and OMB to withdraw from a decades-old agreement allowing the IRS to avoid White House review of its rulemakings. Last week, two former heads of OIRA, Susan E. Dudley who served under President George W. Bush and Sally Katzen who served in the Clinton administration, wrote in The Wall Street Journal that this longstanding agreement has been abused and agreed it should be reconsidered.

Further, the coalition letter firmly holds that the IRS should not be permitted to claim that the economic impact of its rules is due to the underlying statute and not its regulatory choices.

The full letter can be found here.

The following groups signed:

American Business Defense Council
Dick Patten, President

American Commitment
Phil Kerpen, President

Americans for Prosperity
Brent Wm. Gardner, Chief Government Affairs Officer

Americans for Tax Reform
Grover Norquist, President

Association of Mature American Citizens
Dan Weber, President & CEO

Campaign for Liberty
Norm Singleton, President

The Carlstrom Group
Bob Carlstrom, President

Cause of Action Institute
John Vecchione, President & CEO

Center for Freedom and Prosperity
Andrew F. Quinlan, President

Council for Citizens Against Government Waste
Tom Schatz, President

Family Business Coalition
Palmer Schoening, Chairman

Freedom Partners Chamber of Commerce
Nathan Nascimento, Executive Vice President

FreedomWorks
Jason Pye, Vice President of Legislative Affairs

Hispanic Leadership Fund
Mario H. Lopez, President

National Taxpayers Union
Pete Sepp, President

Taxpayers Protection Alliance
David Williams, President

Tea Party Patriots
Jenny Beth Martin, President

 

For information regarding this press release, please contact Zachary Kurz, Director of Communications at CoA Institute: zachary.kurz@causeofaction.org.

 

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02/20/2018

Treasury and OMB are Reconsidering IRS Oversight Exemption

I’ve been writing about the series of self-created exemptions the Internal Revenue Service (“IRS”) has been using to evade oversight of its rulemakings.  One of those exemptions is tied to White House review pursuant to Executive Order 12,866 at the Office of Information and Regulatory Affairs.  Today, for the first time, the agency publicly revealed that it is in talks with the Office of Management and Budget (“OMB”) to review that exemption.

The Trump Administration’s Departments of Health and Human Services (“HHS”), Labor, and the Treasury just released a proposed rule that would allow Americans to buy short-term health insurance plans that would not be affected by the Patient Protection and Affordable Care Act’s mandates that are driving up premiums and limiting choice.  Housed within that proposed rule is a microcosm of the problem I’ve been highlighting.

On pages 17–28, HHS and Labor conduct a series of regulatory assessments, including an explanation of what the costs, benefits, advantages, and disadvantages of the proposed rule are.  They even include an analysis of the number of enrollees likely to take advantage of the proposal and the impact on the individual market exchanges.  IRS?  Not so much.  As has been its practice, the IRS simply claims that “[c]ertain IRS regulations, including this one, are exempt from the requirements of Executive Order 12866 . . .  Therefore, a regulatory impact assessment is not required.”

However, the IRS also reveals that CoA Institute’s efforts to urge the Trump Administration to review the exemption is starting to bear fruit.  The IRS states that “[p]ursuant to Executive Order 13789, the Treasury Department and OMB are currently reviewing the scope and implementation of the existing exemption.”

IRS Section from Proposed Rule on Short-Term Insurance

Here’s hoping they go further than simply review the scope and implementation, and resolve to end the practice that allows the IRS to give short shrift to the impacts of its rules, while other agencies, like HHS and Labor here, do their homework.

James Valvo is Counsel and Senior Policy Advisor at Cause of Action Institute.  He is the principal author of Evading Oversight.  You can follow him on Twitter @JamesValvo.

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11/20/2017

CoA Institute Investigating Taxpayer-Funded Settlements for Sexual Harassment, Discrimination on Capitol Hill

Washington D.C. – Cause of Action Institute (“CoA Institute”) has filed a Freedom of Information Act (“FOIA”) request with the U.S. Department of the Treasury as part of an investigation into the secret  settlement payments of millions in taxpayer dollars to settle cases of sexual harassment and other forms of invidious discrimination by members of Congress and their staff over the last two decades.

CoA Institute President John J. Vecchione: “Powerful testimony, admissions by the Office of Compliance, and numerous brave women speaking out have brought to light sexual harassment and discrimination in Congress. Unfortunately, many questions remain concerning how and under what authority these settlement payments have been made. If taxpayers are footing the bill to settle complaints of misconduct, the American public should know about it.”

CoA Institute’s FOIA request seeks all records and communications relating to taxpayer funds used to settle complaints of misconduct against members of Congress and their staffs. It requests all records, including financial records, relating to settlement payments made over the past 20 years for any allegation of misconduct, including sexual harassment, racial and religious discrimination, and discrimination against people with disabilities.

The existence of settlement payments has been publicly confirmed by the congressional Office of Compliance, which stated that the funds for the payments comes from an account operated by the Treasury Department.

For information regarding this press release, please contact Zachary Kurz, Director of Communications at CoA Institute: zachary.kurz@causeofaction.org

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05/18/2017

Cause of Action Institute Investigates Possible DOJ Involvement with Congressional Frustration of the FOIA

Cause of Action Institute (“CoA Institute”) filed a Freedom of Information Act (“FOIA”) request with the Department of Justice (“DOJ”) today in response to recent reports that Representative Jeb Hensarling, Chairman of the House Committee on Financial Services, directed the Department of the Treasury and at least eleven other agencies to treat all records exchanged with the Committee as “congressional records” not subject to the FOIA.

CoA Institute’s request is narrowly tailored to uncover records that could reveal whether the DOJ’s Office of Information Policy—which oversees government-wide compliance with and policy concerning the FOIA—and Office of Legislative Affairs were consulted by Chairman Hensarling, or others, prior to the release of the controversial FOIA directive. The request also seeks records concerning possible White House involvement and whether agencies sought the DOJ’s advice before responding to Chairman Hensarling.

Federal law requires that Congress manifest clear intent to maintain control over specific records to keep them out of reach of the FOIA. Chairman Hensarling’s directive is ineffective, in that regard.  As I have argued elsewhere, the mere fact that an agency possesses a record that relates to Congress, was created by Congress, or was transmitted to Congress, does not, by itself, render it a “congressional record.” And, as set forth in a coalition letter joined by CoA Institute, ignoring this well-established standard would “improperly restrict the ability of the public to use FOIA” and impede transparency and good government.

Ryan Mulvey is Counsel at Cause of Action Institute

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05/10/2017

Cause of Action Institute Signs Coalition Letter Opposing Congressional Interference with the FOIA

Cause of Action Institute signed a coalition letter yesterday that urged Jeb Hensarling, the Chairman of the House Financial Services Committee, to rescind his recent direction to the Department of Treasury and other agencies to treat all records exchanged with the committee as “congressional records” not subject to FOIA, i.e. the Freedom of Information Act.

As I outlined in a recent op-ed published in The Hill, the mere fact that an agency possesses a record that relates to Congress, was created by Congress, or was transmitted to Congress, does not, by itself, render it a “congressional record.”  The law instead requires that Congress manifest clear intent to maintain control over specific records to keep them out of reach of the FOIA.

Chairman Hensarling’s letter employs sweeping, generalized language in an ineffective yet blatant attempt to frustrate public access to records of Congress’s dealings with the Executive Branch.  As the coalition letter explains, such “assertions improperly restrict the ability of the public to use FOIA” and indicate a dangerous departure from a commitment to transparency and good government.

Ryan Mulvey is Counsel at Cause of Action Institute.

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