Tuesday, October 22, 2013
New York (October 22, 2013) – University of San Diego (USD) School of Law Assistant Professor Jordan Barry was quoted in a Tampa Bay Times Politifact Truth-O-Meter article about comments made by Lawrence O’Donnell on his MSNBC program concerning the controversial individual mandate included in the Affordable Care Act.
Ever since the law passed, O’Donnell has told his viewers not to fear the individual mandate. He said it again on The Last Word with Lawrence O’Donnell on Oct. 21, 2013 while scolding a White House correspondent.
"No one ever really has to pay the fine in the individual mandate," O’Donnell said, "because the IRS has been specifically forbidden, in writing, in law, in the Affordable Care Act, from ever actually pursuing either civil or criminal remedies to collect those fines from anyone. The individual mandate is the only provision in the tax code that was written deliberately to be essentially unenforceable."
The final bill President Barack Obama signed into law in 2010 included two requirements that limited the IRS’s ability to enforce the mandate penalty. The agency cannot pursue criminal charges against someone who does not pay the penalty and also cannot file a notice of lien or seize property.
The IRS does have one way to collect the individual mandate penalty, by docking tax refunds. The agency will send a notice to taxpayers who are required to pay the penalty. If the penalty is not paid, the IRS can take it out of a tax refund.
"It’s a mandate that operates through inconvenience," said Professor Barry who co-wrote an essay with Professor Bryan Camp of Texas Tech University examining whether the mandate is really mandatory. "It’s basically right that you could avoid this if you wanted to."
With help from Professor Barry and other tax law experts, Politifacts.com rates O’Donnell’s claim as mostly true. The IRS cannot use its most effective collection weapons—the threat of jail time or seizing of property—for the individual mandate penalty. But the law did not take away its power to pursue lawsuits against delinquent taxpayers, though experts say it isn’t likely given the small size of the penalty and current difficulty of filing suit outside of tax court. Plus, for taxpayers who overpay their income taxes and don’t pay the fine, the IRS could extract the penalty from a taxpayer’s refund.
Read the full article on politifact.com.
About Professor Barry
Jordan M. Barry is an assistant professor of law at the University of San Diego School of Law, where he teaches and writes in the areas of contracts, tax policy, and law and economics. Barry’s research includes corporate and securities law, tax law, and law and economics.
About the University of San Diego School of Law
Recognized for the excellence of its faculty, curriculum and clinical programs, the University of San Diego (USD) School of Law enrolls approximately 900 Juris Doctor and graduate law students from throughout the United States and around the world. The law school is best known for its offerings in the areas of business and corporate law, constitutional law, intellectual property, international and comparative law, public interest law, and taxation.
USD School of Law is one of the 81 law schools elected to the Order of the Coif, a national honor society for law school graduates. The law school’s faculty is a strong group of outstanding scholars and teachers with national and international reputations and currently ranks 23rd worldwide in all-time faculty downloads on the Social Sciences Research Network (SSRN). The school is accredited by the American Bar Association and is a member of the Association of American Law Schools. Founded in 1954, the law school is part of the University of San Diego, a private, nonprofit, independent, Roman Catholic university chartered in 1949.