Trump IRS seeks millions in Obamacare fines even though law is ‘dead’

Hundreds of companies face prospective fines for violating Obamacare’s employer mandate by the same Trump administration that has done virtually everything in its power to abolish the federal health care law.

The Internal Revenue Service notices recently began arriving in corporate mailboxes, in some cases demanding millions of dollars in fines — an awkward development as the White House touts its business-friendly tax package. The notices will likely spur another legal fight over the health law — this time featuring the administration defending a statute that President Donald Trump has repeatedly declared dead.

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“Litigation is in the works,” said Alden Bianchi, an attorney who represents several businesses facing potential penalties for failing to provide adequate insurance coverage to workers. “There is a challenge out there and it’s brewing and the players are serious.”

The enforcement actions cover potential violations in 2015, the first year the mandate was supposed to be applied, after the Obama administration suspended fines in 2014. The Obama administration never tried to collect fines for 2015 before it left office in early 2017. Thanks in part to the time lag in tax filings, the first penalty notices just started to roll out in November, enforcing an unpopular requirement heading into the midterm election. Trump’s IRS has similarly enforced the health law’s requirement that most individuals carry insurance.

The covered firms argue the process is critically flawed, in large part because they never received legally required warnings from Obamacare exchanges at that time. As a result, companies say the government didn’t follow the law and they shouldn’t face the fines.

The IRS didn’t respond to questions from POLITICO about the penalties. The administration hasn’t disclosed precisely how many companies face potential fines, which can amount to several thousand dollars per employee, depending on circumstances. Several sources have told POLITICO they estimate the number of companies is in the hundreds or perhaps the low thousands.

A White House spokesperson referred POLITICO to the IRS.

The initial assessments are not binding. Employers have an opportunity to appeal the decision and present evidence that the IRS erred.

A potential lawsuit would likely center around what the businesses see as a fundamental problem in the enforcement of the mandate, according to sources familiar with those discussions. Employers with more than 100 full-time employees that are subject to the coverage requirement get fined when one or more of their workers goes to an Obamacare exchange and qualifies for a tax credit to help them buy insurance. Beginning in 2016, the criteria changed and more employers with more than 50 full-time employees faced the fine.

Under the law, when an employee gets a subsidy, the health insurance exchange is supposed to trigger a notification to the employer, effectively putting the business on notice that it’s likely to face a fine, and to give it an opportunity to cover the employee. But business sources say the federal exchange and some state-run exchanges never sent out those notices — and still aren’t.

“This is a 2015 problem, but guess what? This is also a 2017 problem because no notifications have gone out for 2017,” said Chris Condeluci, an attorney who is working with some companies facing potential fines.

Employers also complain the forms they’re supposed to fill out telling the IRS whether they offer coverage have confusing language, leading some businesses to mistakenly state they don’t provide it when they do.

“You can’t ignore an IRS assessment,” said Edward Lenz, senior counsel for the American Staffing Association, which represents temporary employment agencies. “You do that at your peril.”

So far, many employers are staying mum, in the hopes of negotiating the penalties away or that the IRS chooses not to enforce them. But if they go public over a huge Obamacare fine so soon after Republicans passed their business-friendly tax bill, congressional Republicans would be hard pressed not to come up with a solution.

Rep. Mike Kelly (R-Pa.) is sponsoring legislation that would retroactively eliminate the penalties. Kelly says that some Democrats quietly support the idea. Indeed, soon after the administration in 2013 unilaterally delayed enforcement of the mandate for one year, until 2015, 35 Democrats joined House Republicans to pass a bill doing the same thing.

“They knew it was a mistake too but it was too late – they couldn’t change it,” Kelly told POLITICO.

House Ways and Means Chairman Kevin Brady (R-Texas) said there is “very strong interest” in delaying or repealing the mandate, including retroactively.

But such a move would cut off revenue from the fines, potentially forcing supporters to come up with alternatives. The Congressional Budget Office pegs the revenues at $146 billion over a decade.

“I’d like to see us make progress there because there are a couple issues,” Brady said. “One is the cost of the mandate going forward, but also I think the effort to look back two to three years [to repeal retroactively].”

For now, covered employers are left in legal limbo.

In December, an AtWork Group temporary-staffing franchise was hit with a $3.8 million assessment for violating the mandate. The Knoxville, Tenn.-based firm was stunned: Most of its employees aren’t full-time workers, and it found a low-cost plan for 2015 that HHS determined was sufficient to meet the law’s requirements.

“It would kill them,” said Jason Leverant, AtWork Group’s chief operating officer. “That’s a huge sum of money.”

AtWork’s franchisee has appealed the IRS’ initial determination, and hopes that the issue will disappear once the facts are clarified.

“There’s no way it should stick,” Leverant said.

Aaron Lorenzo contributed to this report.

Ex-Clinton aide reveals why she made mystery bid for California governor

Amanda Renteria is pictured. | Getty Images

Amanda Renteria, who served as national political director of Clinton’s 2016 campaign, is joining the contest less than four months before the June primary. | Jacquelyn Martin/AP Photo

LOS ANGELES — Amanda Renteria, the former top Hillary Clinton campaign aide whose mysterious late entry into the California gubernatorial race befuddled political observers, said Tuesday she is seeking to change “the culture of politics” and its fixation on money with her insurgent campaign.

Distinguishing herself from two of several high-profile Democrats who have already raised millions of dollars for the contest — Lt. Gov. Gavin Newsom and former Los Angeles Mayor Antonio Villaraigosa — Renteria told POLITICO, “I’m very different than they are, right? Whether it’s the way I launched my campaign, whether it’s that I have been the girl doing the work.”

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Renteria, a former aide to Sens. Dianne Feinstein and Debbie Stabenow, said, “A lot of career folks talk about the idea of the politician versus the public service folks, and the politicians are the ones who are doing all the talking. … There is a big difference when you’re sitting there and you’ve got to figure out how do I … execute on this vision.”

Renteria’s remarks came as she spoke to news outlets for the first time Tuesday, after several days of unusual silence following her filing for the gubernatorial race last week.

Renteria, who served as national political director of Clinton’s 2016 campaign, is joining the contest less than four months before the June primary. Several higher-profile Democrats have been raising money, securing endorsements and debating for more than a year.

Renteria said she has been considering the gubernatorial race since November. She said questions about how much money a candidate can raise — a mainstay of statewide elections, especially in a state with California’s expensive media markets — is “a really unfortunate conversation that people have.”

“We will have enough to get our message out,” she said.

In her last bid for elected office, in a Central Valley House contest in 2014, Renteria was defeated by incumbent Republican Rep. David Valadao by more than 15 percentage points. Renteria said the political landscape has changed since then, with voters becoming more engaged.

“People are watching,” she said, “and I think that’s what makes something different possible.”

Renteria dismissed as “crazy” accusations by allies of Villaraigosa that her candidacy was orchestrated to draw support away from Villaraigosa among Latinos and voters in the Central Valley — potentially helping Newsom.

“Absolutely not,” she said.

The suggestion, Renteria said, is “exactly the kind of cynicism that’s out there that really makes me sad about where our politics are.”

Renteria said she did a “gut check” about whether she could win.

“My answer to that was, ‘Yes,’” she said.

State Dept.: No coordination with Trump Jr. on speech in India

Donald Trump Jr. is pictured. | Getty Images

Alex Wong/Getty Images

There has been no coordination between the State Department and Donald Trump Jr. on a speech he is scheduled to deliver in India this week, the department said on Tuesday.

President Donald Trump’s eldest is in India to meet with business leaders and discuss real estate projects, and is slated to speak on Friday in New Delhi at the Global Business Summit, hosted by The Economic Times. His address is titled “Reshaping Indo-Pacific Ties: The New Era of Cooperation.”

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Prime Minister Narendra Modi is among the Indian political leaders expected to attend.

The State Department said on Tuesday that the younger Trump was visiting as a private citizen but that Secret Service members were accompanying him on his trip.

The Secret Service has raised concerns about maintaining salaries for its agents in a period of unprecedented demand, in part because of the size of the Trump family and the need to protect family members and secure several residences.

McMorris Rodgers set to attend fundraiser with auction of AR-15

Cathy McMorris Rodgers is pictured. | Getty Images

Rep. Cathy McMorris Rodgers of Washington state is set to headline the event, which is scheduled on the same day students who survived the Florida shooting plan a nationwide demonstration calling for stricter gun laws. | Mark Wilson/Getty Images

Rep. Cathy McMorris Rodgers (R-Wash.) is scheduled to headline a local Republican Party fundraising dinner next month that has been advertising its plans to auction off an AR-15 rifle — the style of weapon used to kill 17 in last week’s Parkland, Florida school shooting.

After POLITICO contacted the committee on Tuesday, the Stevens County Republican Party removed from the event’s website mentions of the AR-15 and a plan to offer a 10-22 Ruger rifle as a door prize from the event’s website. But the organization is still considering how to proceed with the auction, its chair said.

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The northeast Washington state event is set for the same day surviving students have planned a nationwide demonstration, including a march in Washington, D.C., calling for stricter gun laws.

“The [Stevens County Republican Central Committee] recognizes that in the current environment, publicizing a means to acquire an AR-15 at our auction has the potential to insert more separation into our political discourse. As a result, changes to the event’s plans are being considered,” said chair Lori Larsen in a statement to POLITICO.

The event, which is still proceeding as scheduled, is set to feature McMorris Rodgers, the House Republican Conference chair, and Caleb Heimlich, the Washington State Republican Party chairman.

Republican candidates and conservative organizations have raised money using weapon auctions in the past, but McMorris Rodgers is a high-ranking member of Republican leadership, and the event is scheduled for just over one month after the shooting.

“For many years, the SCRCC has featured auction items related to shooting sports and 2nd Amendment rights, including a top-valued auction item of a semi-automatic AR-15 rifle. In every case, we have coordinated auction winners/purchasers with authorized gun dealers to remain in full compliance with legal requirements including background checks when it comes to actual acquisition of any firearm,” Larsen said in her statement.

“Our choice to once again offer this popular item was made prior to the terrible incident in Parkland, Florida, and our public advertisement of this event began several days before the shooting. We grieve with the community and the nation.”

A spokesman for McMorris Rodgers declined to comment.

In September, a school shooter in Spokane — in McMorris Rodgers’ district — tried using an AR-15, but it jammed. He killed one fellow student and injured three others using a handgun, according to local reports. Weapons in styles related to the AR-15 were used in the recent mass shootings in Orlando, Sutherland Springs, Texas, Las Vegas, and Newton, Connecticut, among others.

Washington Democratic Party chair Tina Podlodowski called the event “unbelievable and shameful.”

“This is a slap in the face to the families of the students and teachers killed in Parkland, the parents who are living in fear that their children will be among the next victims of gun violence, and those of us who are working diligently to find a solution to an incredibly complex problem,” she said in a statement to POLITICO.

Lisa Brown, a Democrat running against the seven-term lawmaker, called for McMorris Rodgers to scrap her plans to attend the event in a tweet on Tuesday afternoon.

White House blasts critics of Trump’s Russian hacking response

Sarah Huckabee Sanders is pictured. | AP Photo

“Everybody wants to blame this on the Trump administration,” White House press secretary Sarah Huckabee Sanders said. “Let’s not forget that [the Russian meddling] happened under the Obama administration.” | Jacquelyn Martin/AP Photo

The White House on Tuesday sharply rejected accusations that President Donald Trump has done little to protect the country from future Russian election meddling and cyber intrusions.

“President Trump and the administration have made it clear that interference in our elections will have consequences, and we’re going to continue to impose consequences in response to Russian cyberattacks,” press secretary Sarah Huckabee Sanders told reporters.

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Trump has come under renewed fire for his response to the hacks and disinformation campaign that roiled the 2016 election in the wake of special counsel Robert Mueller’s indictment of 13 Russians accused of spreading pro-Trump and anti-Hillary Clinton messages on social media during the election.

Democrats and former national security leaders over the weekend admonished Trump for attempting to discredit Mueller’s election meddling probe instead of rallying policymakers to better secure the country’s election infrastructure and ensure that social media platforms aren’t misused to sow discontent ahead of the 2018 midterms.

Sanders argued that the White House was actually taking the lead on combating Kremlin meddling efforts, pointing to recent meetings between DHS and various members of the elections community, including voting technology vendors and local election officials. And she noted that the government last week blamed Russia for a devastating June 2017 cyberattack on Ukraine.

“It was one of the first times that you’ve seen something like that take place,” Sanders said, referring to the U.S. blaming Russia for the NotPetya malware attack, which trashed computers at Ukraine’s central bank and the main airport in Kiev before spreading quickly around the world. “We’re going to continue doing things like that.”

On the election security front, DHS and its partners “are discussing this process and going through and looking every single day at the best ways forward,” Sanders said.

Trump had lunch on Tuesday with DHS Secretary Kirstjen Nielsen to discuss these efforts, the White House said.

The White House has even raised the issue “with multiple foreign heads of state,” Sanders added.

Sanders also hinted that there would be another White House rebuke of Russia’s behavior announced “in the coming days.” The incident will illustrate “another way that this president was tough on Russia,” she vowed.

In the days after Mueller’s indictments were unsealed on Friday, the president falsely insisted that he had never disputed the idea that Russia meddled in the election, saying that his “hoax” comments referred only to allegations of collusion between the Russian government and members of his campaign, which Mueller is also investigating.

And Trump asked why former President Barack Obama didn’t “do something” about Russia’s digital attacks.

While Obama has received bipartisan criticism for not acting more aggressively to combat Russia’s interference efforts during the 2016 race, the former president did expel Russian diplomats and sanction Kremlin intelligence operatives during his final days in office.

Sanders echoed Trump’s attack on Obama.

“Everybody wants to blame this on the Trump administration,” she told reporters. “Let’s not forget that [the Russian meddling] happened under the Obama administration.”