Status of American Health Care Act

• DOI: http://doi.org/10.1002/npc.30335
• Date: 01 June 2017
• Published date: 01 June 2017

Bruce R. Hopkins’ NONPROFIT COUNSEL

7

June 2017

THE LAW OF TAX-EXEMPT ORGANIZATIONS MONTHLY

Bruce R. Hopkins’ Nonprofit Counsel DOI:10.1002/npc

fied professionals with specialized expertise employed

by” it. The club’s employees who work in and oversee

the nonexempt activities continue to stay informed on

current developments and trends for the purpose of

improving the profitability, among other things, of the

non-exempt activities.” Its “directors bring a wide range

of business, legal and accounting experience and exper-

tise, which qualities are consistently used to improve the

quality and profitability of the non-exempt functions.”

Moreover, these nonexempt activities “require great

expenditures of time and other resources of the plaintiff,

and are undertaken solely because of the profits the

activities return to the plaintiff’s general operations.”

The refund the club is seeking is based on “allow-

able, but not previously used, net operating loss car-

ryforwards” for a 20-year period and net operating

loss carrybacks from two years. The refund sought is

$1,097,989. [24.2]

Comment: Surely the IRS is incorrect in this case. ◆

STATUS OF AMERICAN

HEALTH CARE ACT

When this topic was first introduced last month, the

anticipation was that there would be a series of articles,

in coming issues, under this headline. Then, it looked

like future articles were unlikely.

Lacking the votes to pass the version of the Ameri-

can Health Care Act then pending in the House of Rep-

resentatives, the House Republican leadership, on March

25, removed the bill from consideration in that chamber.

Members of the Freedom Caucus and some Republican

moderates in the Tuesday Group withheld the votes

necessary for the Act’s passage. This development not

only perpetuated, for the foreseeable future, the Patient

Protection and Affordable Care Act, but it also seemingly

made comprehensive tax law reform more difficult.

Bloomberg BNA’s Daily Tax Report for March 27

includes two quotes that nicely sum up where we are on

this topic. In a press conference after the Act was pulled,

House Speaker Paul D. Ryan (R-Wis.) said: “We’re going

to be living with Obamacare for the foreseeable future. I

don’t know how long it’s going to take us to replace this

law.” Rep. Charlie Dent (R-Pa.) said the Affordable Care

Act “needs to be reformed, repaired and overhauled,

and some parts will be retained.”

About two weeks after this failure to pass the pro-

posed Act, there was a flurry of activity to take another

run at repeal of the Affordable Care Act just before a

congressional recess, but that came to naught. This tug-

of-war persisted: Those who want to repeal more of the

Affordable Care Act’s elements and those who are sensi-

tive to the Congressional Budget Office’s conclusion that

the original House version of the repeal bill would lead

to less health care coverage in 2026 (see last month’s

issue) continued to withhold their affirmative votes.

As this issue went to publication, the House of Repre-

sentatives passed a version of the Republican health care

legislation (217-214). This proposal (H.R. 1628) would

repeal the Affordable Care Act’s tax provisions, other than

the Medicare surtax. Other prominent features of the bill

are refundable tax credits, $8 billion in subsidies for pre-

miums for individuals with preexisting health conditions,

and $85 billion for the Senate to utilize in crafting tax

credits for those facing premium increases.” ◆

TAX PRACTITIONERS OFFER

MODERNIZATION ADVICE TO

IRS

By letter dated April 3, the American Institute of Certi-

fied Public Accountants, the National Association of Tax

Professionals, the National Society of Tax Professionals,

and similar organizations offered these recommendations

for modernization of the practices and technology of the

IRS:

• Re-establishment of the annual congressional joint

hearing review.

• Provision of a biannual report on the federal tax sys-

tem by the Joint Committee on Taxation.

• Review of the IRS Oversight Board by the General

Accounting Office, for the purpose of determining

whether it is an “essential component to allow the

IRS to become a respected, service-oriented organiza-

tion.”

• Utilization by the IRS of the “full range of available

authorities to hire and compensate qualified and

experienced professionals from the private sector, as

needed, to improve the Service’s ability to meet its

mission.”

• Determination by the legislative and executive

branches of the “appropriate level of service and com-

pliance they want the IRS accountable to provide and

then dedicate appropriate resources for the agency to

meet those goals.”

• Continuation by the IRS of customer satisfaction

surveys.

• Provision by the IRS of “needed face-to-face interaction

to accommodate those taxpayers who cannot afford or

choose not to use the online account features.”

• Designation by the IRS of a “new dedicated ‘exec-

utive-level’ practitioner services unit.” In connection

with this unit, the IRS should provide tax practitioners

with a “tax professional account with immediate

account access to all of their clients’ information.” The

IRS should offer “robust practitioner priority hotlines

with higher-skilled employees capable of addressing

complex technical and procedural issues.” ◆