"There is danger from all men. The only maxim of a free government ought to be to trust no man living with
power to endanger the public liberty." - - - - John Adams

Saturday, February 15, 2014

Obama's IRS Demands Businesses Show “Bonafide Reasons” for Layoffs

Can You Hear The Goose Stepping?
  • The IRS has become the thug enforcer of our Führer and his Brown Shirts in Congress.  The IRS is now dictating to businesses their hiring and firing.
  • Just in case you wonder why the "small government" GOP has not reformed the IRS it is because the IRS is the proud creation of the Republican Party.  See our article "Obama Channels Republican Socialism." 

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.

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 reports the New American.

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.

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