IRS Demands Businesses Show “Bonafide Reasons” for Layoffs

IRS Demands Businesses Show “Bonafide Reasons” for LayoffsThe New American – by Warren Mass

The IRS will require employers who terminate employees to show that they did so for “bona fide business reasons” in order to be eligible for delaying the ObamaCare health insurance employer mandate.

Under new guidelines announced on February 10, the IRS will delay the mandate until 2016 for medium-sized businesses employing between 50 and 99 people. Businesses with 49 employees or fewer are not required to provide their employees with health insurance coverage under ObamaCare, as the Affordable Care Act is generally called.  

The phasing-in of the employer mandate is designed to make “the compliance process simpler and easier to navigate,” said Assistant Secretary for Tax Policy Mark Mazur.

The Treasury Department/IRS document outlining the regulations first states:

An applicable large employer [more than 100 employees] that, for a calendar month, fails to offer to its full-time employees health coverage that is affordable and provides minimum value may be subject to an assessable payment if a full-time employee enrolls for that month in a qualified health plan for which the employee receives a premium tax credit.

As might be expected, some employers who are slightly above the 100-employee limit might trim their staffs a bit to qualify for the delayed mandate. Obviously, since a company cannot function with an inadequate workforce, it will cut staff only if it makes good business sense to do so — regardless of the ObamaCare regulations. Some companies may very well have been considering making cuts anyway, and the government regulations would merely provide more incentive to do what was needed. But the IRS does not see things this way.

In a show of bureaucratic magnanimity, “to assist these employers in transitioning into compliance,” the IRS has provided “transition relief” for employers who have an average of at least 50 but fewer than 100 full-time employees during 2014.

To qualify for this “relief,” however, the company must “not reduce the size of its workforce or the overall hours of service of its employees in order to satisfy the workforce size condition set forth in paragraph (1) of this section XV.D.6.”

(One can just imagine an IRS bureaucrat visiting a company and writing them up because they are in violation of “section XV.D.6.”)

The IRS regulation further states: “A reduction in workforce size or overall hours of service for bona fide business reasons will not be considered to have been made in order to satisfy the workforce size condition.” (Emphasis added.)

Examples of “bona fide business reasons” acceptable to the IRS include “business activity such as the sale of a division, changes in the economic marketplace in which the employer operates, terminations of employment for poor performance, or other similar changes unrelated to eligibility for the transition relief provided in this section XV.D.6.” If the layoffs were made for these reasons, the IRS assures us, they will “not affect eligibility for that transition relief.”

As business executives have found in the past, however, government regulations enforced (or not) at the sole arbitrary discretion of agency bureaucrats is the stuff of which political pressure is made. It becomes an excellent tool to punish or reward companies according to the degree that they support the regime in power. This becomes even more likely if the regulatory process is made though executive dictates, rather than the legislative process.

An opinion piece in the Wall Street Journal for February 10 (“Obama Rewrites ObamaCare”) noted the impact of ObamaCare on businesses and employers’ warnings that “the new labor costs — and the onerous reporting and tax-enforcement rules — would damage job creation and the economy.”

The writer pointed out the obvious contradiction between the common assertion made by liberals that the healthcare law is not harmful to our economy and the administration’s concession, by providing its “transition relief” (people do not need “relief” from something that is beneficial), that ObamaCare is burdensome.

Observing that the Treasury Department stated, “As these limited transition rules take effect, we will consider whether it is necessary to further extend any of them beyond 2015,” the Journal writer noted that the law may be suspended indefinitely if the White House so decides.

And that, notes the article, is the real danger, insofar as maintaining the separation of powers is concerned:

Changing an unambiguous statutory mandate requires the approval of Congress, but then this President has often decided the law is whatever he says it is. His Administration’s cavalier notions about law enforcement are especially notable here for their bias for corporations over people. The White House has refused to suspend the individual insurance mandate, despite the harm caused to millions who are losing their previous coverage.

Megyn Kelly, on her February 10 Fox New program The Kelly Files, pointed out the obvious power grab that the latest IRS “relief” amounts to:

That is the government telling you, employers, “you will not fire a single person, you will not lay off a single person if you want to take advantage of our gift, and you have to certify under penalty of perjury to the IRS that you didn’t do that, that no layoff was due to Obamacare.”

As for how the government will determine an employer’s motivation for firing some employees, the rules apparently call for an employer to certify to the IRS — under penalty of perjury — that it had not reduced its workforce merely to qualify for the medium-employer exemption.

While this appears to place compliance under an honor system, it gives the government agents an open-ended enforcement tool to utilize whenever they decide to apply a little pressure. They may let an employer slide for years, then come back for an audit and rule that the management lied — and assess penalties against them.

As conservative blogger Bryan Preston (former communications director of the Republican Party of Texas) wrote recently:

Company officials will be trapped in a catch-22. They can lay off as many people as they want because of Obamacare. But because they’ll have to swear to the IRS that their decisions had nothing to do with Obamacare, they can’t speak publicly about what’s happening. What a great way to silence the people who are on the front lines of dealing with Obamacare’s horrific effects.

3 thoughts on “IRS Demands Businesses Show “Bonafide Reasons” for Layoffs

  1. “Under new guidelines announced on February 10, the IRS will delay the mandate…”

    Who is charged with the duty of enforcing the US Constitution? The Militia of the several states – there is no lawful federal “militia”.
    Because the Militia is THE Constitutionally assigned lawful body to:

    Enforce the US Constitution and each state’s Constitution,
    Enforce and keep the “Laws of the Union” (which is constitutional laws ONLY),
    Protect the country against all enemies both domestic and foreign, and
    “to suppress Insurrections and repel Invasions”.
    Insurrections can be those who are in governmental offices working together to destroy our legitimate government – state or federal.

    The problem with this is that none one federal branch was given the power to legislate mandates. One branch alone was given the power to legislate anything and that is the congress; no executive order ever written is lawful. None!

    Constitution of the United States of America, Article I, Section. 1: ALL legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives. (emphasis is mine)

    The word “All” means every single legislative act MUST come from the congress to be lawful, lawfully enforced here. It must be “IN PURSUANCE THEREOF the US Constitution also. Otherwise it is NOT binding on us at all.

    As Dr. Edwin Vieira said: “This has nothing to do with personalities or subjective ideas. It’s a matter of what the Constitution provides…

    The government of the United States has never violated anyone’s constitutional rights…
    The government of the United States will never violate anyone constitutional rights, because it cannot violate anyone’s constitutional rights. The reason for that is: The government of the United States is that set of actions by public officials that are consistent with the Constitution. Outside of its constitutional powers, the government of the United States has no legitimacy. It has no authority; and, it really even has no existence. It is what lawyers call a legal fiction.

    … the famous case Norton v. Shelby County… The Court said: “An unconstitutional act is not a law; it confers no rights; it imposes no duties. It is, in legal contemplation, as inoperative as though it had never been passed.”

    And that applies to any (and all) governmental action outside of the Constitution…”
    What are the defining characteristics of a limited government? They are its disabilities; what it does not have legal authority to do. Look at the First Amendment… What does it do? It guarantees freedom of speech, freedom of press, freedom of religion. But how does it do that? I quote: “Congress shall make no law abridging the freedom of speech or of the press” etcetera. “Congress shall make no law;” that’s a statement of an absence of power. That’s a statement of a disability.”

    “Lawful”: in accordance with the law of the land; according to the law; permitted, sanctioned, or justified by law. Ex: Constitution of the United States of America, state Constitutions

    “Legal”: the “color of law”, “appearance of law”, “pretense of law without the substance of lawfulness”, “misuse of power made possible only because wrongdoer is clothed with authority of state”

    Look at all executive orders, what do they say on them? By the authority vested in me as President by the Constitution and the laws of the United States of America… Remember ALL laws must be IN PURSUANCE THEREOF the US Constitution to be lawful!

    WE the People are the militia, and we are the duty-bound enforcers of the US Constitution and all laws that are in Pursuance thereof it, plus the duty-bound enforcers of all state Constitutions.

    All judges only get to stay in office while they are using “Good Behaviour”. Again, we the people decide the guilt or innocence of our fellow Americans, if the law being used against them is a “good’ law or one that must be discontinued, and if judges are using “Good Behaviour” while in the courtroom as the contract they agree to requires.

  2. …amazing…simply…sadly…amazing….convict them all of treason..and hang them all…ASAP…every government representative from Cabinet Member on up……charge them with treason…find the guilty and hang them…

    RJ O’Guillory
    Webster Groves – The Life of an Insane Family

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