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Posts Tagged ‘IRS’
July 17th, 2018 at 11:28 am
CFIF Praises IRS Decision to Eliminate “Schedule B” Donor Information Filing Requirement
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ALEXANDRIA, VA – In welcome news, the U.S. Treasury Department and Internal Revenue Service (“IRS”) announced yesterday evening that the IRS will finally cease requiring certain nonprofit organizations to file “Schedule B” forms that list sensitive personal information like the names, addresses and other identifying information about private citizens who donate to those organizations.

In response, Center for Individual Freedom (“CFIF”) President Jeffrey Mazzella issued the following statement:

“As many Americans are all too aware, recent years have witnessed an increase in assaults against our First Amendment freedoms of speech and association.  In some cases, the IRS has collected and leaked private information on contributors to 501(c) nonprofit organizations contained in mandatory Schedule B forms that by law were to remain confidential.  And across America, hyper-partisan government state-level officials have demanded Schedule B forms and confidential donor information contained therein as part of their campaign to harass organizations and donors with whom they disagree politically.

“With this announcement, the IRS and Treasury are acting on the acknowledgment that Schedule B information is irrelevant to its handling of tax filings, and serves no substantive purpose. In this era of persecution of private citizens for their political beliefs, together with the IRS’s admission that it can’t guarantee the confidentiality of the information contained on the Schedule B, this decision is welcome news.

“We at CFIF applaud the Trump Administration Treasury Department and IRS for their leadership and doing the right thing by eliminating the Schedule B form filing requirement for many nonprofit 501(c) organizations.”

CFIF has spearheaded the broad conservative and libertarian coalition to eliminate the Schedule B from filing requirement, including, among other efforts, coordinating a letter to President Trump and Treasury Secretary Steven Mnuchin earlier this year signed by more than 60 influential organizations and individuals urging executive action to accomplish that end.

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September 11th, 2017 at 2:52 pm
Free Market Groups Urge Support for “Free File Permanency Act”
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The Center for Individual Freedom (CFIF) last week joined with nearly 20 free-market organizations to urge support for H.R. 3641, the Free File Permanency Act.

The letter, which was organized by Americans for Tax Reform, was addressed to House Ways and Means Tax Policy Subcommittee Chairman Peter Roskam (R-IL).

Read the letter here.

May 16th, 2016 at 11:52 am
Congressional Reform Legislation Targeting IRS Abuse Deserves Our Support
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In the Mario Lopez interview immediately below and a recent Liberty Update piece noting a welcome federal court victory, CFIF continues to emphasize and oppose ongoing official governmental efforts to intimidate and silence conservative donors:

[P]ublic officials and vindictive private citizens persist in demanding access to membership records and donor lists of conservative and libertarian organizations whose missions they deem unacceptable.  Anyone requiring confirmation need only look to Internal Revenue Service (IRS) harassment of pro-Israel and conservative nonprofit groups, or California citizens driven from their jobs simply for advocating a position on marriage that even a majority of state voters at the ballot box.

A recent federal court ruling in California vindicates donor privacy and the logic underlying [the Supreme Court ruling in] NAACP v. Alabama.”

On the same note, it’s worth highlighting Congressional legislation led primarily by Ways and Means Oversight Subcommittee Chairman Peter Roskam (R – Illinois) targeting Internal Revenue Service (IRS) abuses that deserves our support.  Specifically, the House of Representatives recently passed a set of reforms to stop IRS abuses, improve protections for everyday American taxpayers and finally hold IRS officials accountable for official misconduct.  Here’s what the package of reforms would accomplish:

  1. Force the IRS to implement the Taxpayer Bill of Rights;
  2. Prevent the IRS from targeting donors to nonprofit organizations;
  3. Prohibit IRS officials from using private email accounts to conduct official government business;
  4. End IRS abuses of taxpayer privacy protections;
  5. Allow social welfare nonprofit organizations to self-declare their tax-exempt status rather than subject themselves to politicized IRS stalling tactics;
  6. Allow organizations to appeal IRS denials of their tax-exempt status applications;  and
  7. Immediately terminate IRS employees found guilty of targeting Americans on the basis of political bias.

It’s a good sign that IRS abuses and other governmental efforts at the federal, state and local levels targeting Americans – especially conservative and libertarian Americans – who simply wish to exercise their First Amendment rights have been exposed.

But that’s not enough.  We can’t let the opportunity to actually change the atmosphere in which these abuses occurred, and prevent similar abuses going forward.  Americans of every political persuasion should therefore contact their elected representatives and the White House to demand their support for these common-sense reforms.

April 10th, 2015 at 2:57 pm
Beware ObamaCare as Tax Day Approaches

Nearly every American that received an ObamaCare subsidy to help pay for health insurance last year got the wrong amount.

“Only 4 percent of the people who signed up for ObamaCare got the correct subsidy, so a whopping 96 percent will see their tax bill adjusted, some up and others down,” writes Betsy McCaughey. “Who would design a system that’s right only 4 percent of the time?”

The main reason for the discrepancy is that a person must estimate – i.e. guess – their entire taxable income for the next year in order to find out how much of a subsidy they qualify for under ObamaCare during enrollment season. A raise or switch to a higher paying job could be zeroed out because the government gets to “clawback” the difference. Losing a job means a fatter refund.

You can see which direction ObamaCare’s incentives point to, which provides a partial answer to McCaughey’s rhetorical question – people who penalize moving up the income ladder.

April 2nd, 2015 at 5:58 pm
ObamaCare’s Subsidy “Clawback” Feature Explained

Daniel Payne at The Federalist has a must-read article explaining the perverse and punitive feature of ObamaCare that allows the federal government to “clawback” subsidy amounts from eligible recipients.

“If you’re flat broke at the beginning of the year and accept tax credits from ObamaCare for several months, then find a high-paying job with health insurance halfway through the year and make enough money to put yourself over the subsidy threshold, you’ll owe back every penny of those subsidies you received come tax season, even though you had no money when you received them,” writes Payne.

ObamaCare’s critics have warned that the law would discourage people from getting better paying jobs for fear of losing their health insurance subsidy. In practice, it looks like the penalty on work could be even worse.

March 19th, 2015 at 5:18 pm
Large Numbers of Americans Not Prepared for ObamaCare Penalty

If you didn’t have health insurance last year, could afford it (according to ObamaCare), and don’t have a waiver from the individual or employer mandate, you will be getting a notice from the IRS this year that you owe Uncle Sam some money.

Apparently, this will be a surprise to a lot of people.

“A Kaiser Family Foundation poll released Thursday found that while slightly more than half of respondents were aware the penalty kicks in this year, one in five think it goes into effect next year, roughly one in six say they don’t know when it goes into effect, and one in 10 believe it was rolled out last year,” reports the Washington Examiner.

Look for ObamaCare’s unpopularity to increase even more after Tax Day.

February 20th, 2015 at 2:36 pm
Feds Send Out 800,000 Incorrect ObamaCare Tax Forms

First Uncle Bear, now Uncle Sam.

“The Obama administration says it sent about 800,000 HealthCare.gov customers the wrong tax information, and officials are asking those consumers to delay filing their 2014 taxes,” reports CNBC.

The massive blunder comes on the heels of a similar admission by California officials that the state sent out approximately 100,000 error-laden tax forms to residents using the state’s ObamaCare exchange, Covered California.

No timeline was apparent on when revised forms would be sent out, or whether early tax filers would be penalized by the Internal Revenue Service for submitting unknowingly false information.

Another item in the CNBC report may foreshadow the next move. Due to concerns that some people will be angered for being penalized for not buying insurance to comply with ObamaCare’s coverage mandate, the Obama administration is creating another sign-up extension.

Perhaps the IRS will get similar instructions from on high and bump back the filing deadline.

If so, expect to hear the millions of non-ObamaCare customers clamor, “Me too!”

February 17th, 2015 at 7:58 pm
California ObamaCare Exchange Sends Out Nearly 100,000 Error-Laden Tax Forms

The CBS affiliate in San Francisco is reporting on a massive failure by the state’s ObamaCare exchange to correctly reconcile information on customers with health insurance providers.

“About 100,000 or 12 percent of the forms generated by Covered California have inaccuracies,” says the report. The forms are needed by California ObamaCare users to claim tax refunds and verify subsidy amounts with the IRS.

A spokesperson for Covered California said the inaccuracies are due in large part to discrepancies between the state’s records and what the insurance companies have. Despite this, the exchange sent out the forms anyway to beat the February 2 deadline.

Corrected forms are scheduled to go out later this month, but it’s unclear whether all of the 100,000 or so recipients of the inaccurate forms know they are bad. If not, they could be submitting false information to the IRS, an issue that could cause considerable problems down the road.

Expect this to add to the ire already forming ahead of Tax Day.

February 17th, 2015 at 12:53 pm
Congressional Democrats Want to Delay ObamaCare Penalties

It looks like having the courage of one’s convictions about the imperative of ObamaCare doesn’t include making good on the Democrats’ promise to “pay-as-you-go.”

Once upon a time when Rep. Nancy Pelosi (D-CA) was Speaker of the House, Democrats in Congress made a lot of noise about PAYGO, the fiscal policy that essentially requires new spending to be paid for with spending cuts, tax increases, or some combination of the two.

But now that ObamaCare’s IRS-imposed penalties are coming due, those same Democrats are singing a different tune.

“Three senior House members told the Associated Press that they plan to strongly urge the administration to grant a special sign-up opportunity for uninsured taxpayers who will be facing fines under the law for the first time this year,” the AP reports.

Interestingly, the three House members – Michigan’s Sander Levin, Washington’s Jim McDermott and Texas’ Lloyd Dogget – “[a]ll worked to help steer Obama’s law through rancorous congressional debates from 2009-2010.”

And now that the price of non-compliance with ObamaCare’s tax-raising mandates is becoming obvious, all three want to avoid a predictable constituent backlash.

Sorry fellas, if spending at least $684 million annually to educate the public about ObamaCare isn’t enough to adequately inoculate against angry voters, perhaps there’s a fatal flaw in the law.

At any rate, it’s time the American public got the version of health reform you voted for.

February 11th, 2015 at 7:55 pm
Big Insurance Lines Up Behind ObamaCare

If you can’t beat ‘em, join ‘em, and then fight like hell to save them.

That’s essentially the health insurance industry’s strategy when it comes to ObamaCare.

Unable to derail the Democrats’ health reform train in 2009 and 2010, most of the biggest players in the health insurance industry agreed to make peace with the Obama administration.

For their troubles the insurance companies won policy concessions like the individual mandate to ensure a captive market for their products, and a complicated bailout scheme to subsidize losses.

Then along came King v. Burwell, one of the cases challenging the legality of federal subsidies necessary to make ObamaCare plans affordable. (Necessary, but not, according to ObamaCare’s text, permitted in states that rely on the federal government’s insurance portal.)

The Supreme Court is set to hear oral arguments this spring, and many entities have submitted amicus or friend-of-the-court briefs to persuade the justices their way.

“Among those filing amicus briefs defending health reform are HCA, the American Hospital Association, America’s Health Insurance Plans, the National Alliance of State Health Co-ops, the Catholic Health Association of the United States, the American Cancer Society, and the National Association of Community Health Centers,” reports Bloomberg Business. “The insurance and medical industries share the administration’s goal of seeing millions more people covered because that translates into millions more customers seeking the services of carriers, hospitals, and doctors.”

If given a choice, many established businesses would prefer a guaranteed arrangement with the government rather than rely exclusively on the volatility of the market. It’s easy to see why. But discomfort to the health insurance industry should not trump the rule of law. If the IRS can rewrite ObamaCare to make money available where it has been prohibited, then perhaps another agency hence can also decide to cancel spending that is legally required.

No businessman wants to be on the wrong side of a one-way contract. Yet that’s precisely what will happen if the federal bureaucracy gets to change the terms of ObamaCare whenever it sees fit.

February 4th, 2015 at 1:11 pm
IRS Delays Enforcement of ObamaCare “Clawback”

Ladies and gentlemen, please welcome another politically-motivated ObamaCare delay to the stage!

Megan McArdle sums up the IRS’ decision to let those who received too much in ObamaCare subsidies last year get extra time to pay back the difference (called the law’s “clawback” provision).

“It’s not relieving you of the obligation to repay; it’s just saying that you won’t be liable for a penalty if you don’t repay by the deadline,” explains McArdle. “Interest will continue to accrue, but the interest rates that the IRS charges are actually pretty reasonable (and probably much better than what your credit card company charges). It’s the failure-to-pay penalties it layers on top – half a percentage point a month, with even stiffer penalties for failing to file – that really make your tax bill add up fast.”

That is, if the Obama IRS ever gets around to enforcing the parts of laws it doesn’t like. McArdle writes, “The IRS emphasizes that this is a one-time deal, just for 2014. But I’m not sure if you should believe it. This emphasizes one of the problems we’ve spoken about a lot in this space: The political will to impose the costs of the Affordable Care Act is a lot less strong than the will to distribute the benefits.”

The Republican establishment was once derided as the tax collector for the welfare state. If Obama and the Democratic Party can’t be bothered to administer both the costs and the benefits of their so-called health reform law, the GOP shouldn’t shoulder the burden of balancing its books.

Every politically-motivated delay in enforcing an aspect of ObamaCare is a tacit admission by its supporters that the law is unworkable in practice. Republicans should acknowledge the obvious and start afresh.

February 2nd, 2015 at 8:03 pm
White House Considering More ObamaCare Exemptions

Here’s everything you need to know about the corrupting tendencies of the modern administrative state.

When the ruling elite’s social engineering policies threaten to weaken its grip on power, the law can be bent in any way that pleases them.

Exhibit A is a news article from the New York Times, which begins, “Obama administration officials and other supporters of the Affordable Care Act say they worry that the tax-filing season will generate new anger as uninsured consumers learn that they must pay tax penalties and as many people struggle with complex forms needed to justify tax credits they received in 2014 to pay for health insurance.”

The solution: “The White House has already granted some exemptions and is considering more to avoid a political firestorm.”

You read that correctly. If lots of people will be angry because ObamaCare is slated to work as designed – by ensuring that the people who received insurance subsidies actually qualified for them – it’s completely permissible to just exempt them from compliance.

This is interest group politics run amuck.

It’s been said before, but it’s worth repeating. If Mitt Romney had said during the 2012 presidential campaign that all he needed to repeal ObamaCare was to be elected so he could not enforce the law, the Left would have been up in arms swearing to sue him in court for dereliction of duty. When Barack Obama does the same thing it’s suddenly accepted as executive discretion.

One day liberals may see a conservative reap a policy windfall thanks to Obama’s careless actions. If this is the way it’s going to be in the future, don’t be surprised to see presidents of every partisan stripe erode the rule of law by carving out exemptions for their political base. Today it’s the working poor. Tomorrow it might be trust fund kids who see their capital gains taxes go uncollected.

And then, we’ll be Greece.

January 29th, 2015 at 8:13 pm
Disgraced ObamaCare Contractor Now Working for the IRS

CGI Federal was the primary contractor responsible for building Healthcare.gov – the federal ObamaCare website that glitched its way into bureaucratic infamy.

In the aftermath, CGI was fired by the Department of Health and Human Services and a number of states holding similar contracts.

But like a vampire rising from the dead, CGI Federal is back in the ObamaCare game, and just in time for tax season!

That’s right, a Republican-led House subcommittee discovered that the IRS has hired CGI Federal to a $4.46 million contract. Recall that, under ObamaCare, the IRS must administer a complex income-reporting system to verify which taxpayers received too generous a subsidy.

This news was too much for the Wall Street Journal editorial page, which opined that, “Perhaps CGI is still able to obtain federal business because no one has ever been punished for the worst government technology failures since the Challenger explosion. The political class would prefer to forget, but a new audit from HHS Inspector General Daniel Levinson probes what he delicately calls ObamaCare’s ‘inadequacies in contract planning and procurement.’”

“According to the report,” the Journal continues, “HHS rarely obeyed the laws that govern outside hiring, such as competitive bidding and due diligence of past performance. The 33 contractors that contributed to the $800 million website reported to multiple managers and no one at HHS devised an ‘acquisition strategy’ – also required by statute – to integrate the various pieces.”

So if you are confused, frustrated or inappropriately fined by the IRS this tax season, rest assured that CGI Federal is somehow probably responsible – and making millions.

January 29th, 2015 at 6:20 pm
Health Insurance Penalty Obama Decried in 2008 Coming Due in 2015

Add another bullet point to ObamaCare’s litany of broken promises.

The U.S. Treasury announced this week that on Tax Day this year, “Some 3 million to 6 million Americans will have to pay an ObamaCare tax penalty for not having health insurance last year,” reports CNN Money.

Since the penalty is the greater of $95 or 1 percent of income, the bill could bigger than expected.

To calculate possible amounts, go here.

Though it’s been awhile, some may recall that in 2008 a certain presidential candidate attacked Hillary Clinton for being open to garnishing workers’ wages if they failed to buy health insurance under her reform proposal. True to form, Barack Obama promised no such penalty if he was elected president.

Now we know the truth.

January 7th, 2015 at 11:02 am
IRS Tax Refunds Could be Much Smaller Under ObamaCare This Year

Anyone still looking for a fundamental change to the federal tax code need look no further than ObamaCare.

H&R Block, one of the nation’s largest tax preparation companies, is promoting its free “ACA Tax Impact Analysis” on January 8, 2015, in order help taxpayers understand the true cost of ObamaCare.

Reporting by The Hill quotes an H&R Block executive as saying that the controversial health law is “the biggest tax code change” in two decades. Its passage “has made health care a tax issue and is going to make filing taxes more complicated this year.”

Perhaps the biggest surprise coming to millions of taxpayers is the penalty amount to be assessed for not complying with the law’s individual mandate. Most people know that the IRS can levy a $95 fine for being uninsured this year (which rises every subsequent year). But many do not realize that’s only one option. ObamaCare authorizes fines up to 1% of annual income (which also rises every year), if that amount is greater than $95.

Simply put, a lot of people who passed on ObamaCare’s costly version of “affordable” insurance thinking they would only have to write a $95 check may be missing a much bigger chunk of their IRS refund this year.

November 21st, 2014 at 9:09 am
Podcast: Don’t Let IRS Off the Hook
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In an interview with CFIF, True the Vote founder Catherine Engelbrecht discusses a federal judge’s decision to dismiss the lawsuit filed by True the Vote against the Internal Revenue Service for targeting the conservative organization and improperly delaying its application for tax-exempt status, how liberals are attempting to silence their critics, and the status of election integrity.

Listen to the interview here.

November 12th, 2014 at 6:20 pm
ObamaCare’s 2015 Tax Bite

Too bad the incoming Republican majority in Congress probably can’t repeal ObamaCare’s individual mandate before next April, because it looks like millions of middle-income Americans will see their tax refund cut by one-third.

“The financial penalty for skipping out on health insurance coverage [i.e. not complying with the individual mandate] will more than triple to $325 per person in 2015, or 2 percent of income, depending on whichever is higher,” reports CBS News. “Children will be fined at half the adult rate, or $162.50 for those under 18 years old.”

“Based on the flat-rate method, the maximum dollar amount an uninsured family could be fined is $975,” says the news outlet.

To put this into perspective, the average annual American tax refund is about $3,000, meaning that a $975 IRS penalty would reduce the value by one-third.

This is likely to hit middle-income Americans particularly hard since many may be earning too much in wages or salary to qualify for an ObamaCare subsidy. The Catch-22 facing these families is cutting back on other spending to pay high monthly premiums, or foregoing insurance and waiting to see how much the IRS will confiscate. Either way, the predicament facing millions of middle-income Americans is likely to make them even more hostile toward a law billed as the “Affordable Care Act.”

October 8th, 2014 at 3:50 pm
Report: IRS Failed to Disclose Info in 100s of Cases

The IRS is out-of-control.

In the last year we’ve learned that Lois Lerner and other officials in the tax-exempt unit singled out conservative groups for extra scrutiny before approving their requested non-profit status.

That was followed by revelations from IRS higher ups that they mysteriously lost thousands of emails from Lerner and others during the timeframe of interest to congressional investigators.

Last week, a private jet company alleged that the IRS “wiped clean a number of computer hard drives containing emails and other electronic documents that the Government was required to produce.”

And now this.

“The Internal Revenue Service wrongly withheld or failed to adequately search for records in hundreds of Freedom of Information Act requests, while accidentally releasing sensitive taxpayer information in other instances, an independent government watchdog found,” reports the Washington Free Beacon.

The Beacon is summarizing an analysis released by the Treasury Inspector General for Tax Administration (TIGTA).

“TIGTA sampled FOIA requests to the IRS and found 11 percent ‘in which taxpayer rights may have been violated because the IRS improperly withheld or failed to adequately search for and provide information to the requestors’.”

As an independent federal agency, the IRS has a grave obligation to be accountable to the citizens it serves, either directly through FOIA requests or indirectly through congressional oversight panels. That the IRS seems chronically incapable – and increasingly, it seems, unwilling – to honor due process and the rule of law is reason enough to launch a full-scale reconsideration of what the agency does, how it does it and what kind of people should be entrusted to follow the rules.

October 3rd, 2014 at 11:24 am
ObamaCare Nearing a Fannie and Freddie-Style Bailout of Insurance Companies?

Could ObamaCare’s “risk corridor” program become the health insurance industry’s equivalent of Fannie Mae and Freddie Mac – the federally funded entities that spent $180 billion bailing out banks who issued subprime mortgages?

Stephen Moore, the chief economist at the Heritage Foundation, thinks so.

“But insurance experts warn that [the risk corridor] program creates the same moral hazard problem for health insurance that we saw in the mortgage market with Fannie Mae and Freddie Mac,” Moore writes at Investor’s Business Daily. “The guarantee on bad mortgages encouraged bad mortgages. The guarantee against losses on ObamaCare enrollees encourages insurers to toss sound underwriting standards out the window. This didn’t turn out so well with Fannie and Freddie, which received a taxpayer-funded bailout of more than $180 billion after issuing subprime mortgages that should never have been written.”

Moore goes on to say that surveys of health insurance companies selling plans on ObamaCare exchanges say that the vast majority expect to receive a payment from the federal government to cover their losses. Estimates for the first year near $1 billion. And, since there is no cap to how much the feds will reimburse, there is no limit to how much money a company can lose and still expect a check from Uncle Sam.

Despite all this, the Obama administration is chugging ahead with plans to make payments under the risk corridor program without explicit congressional appropriations. Republicans are contesting President Barack Obama’s authority to do this – with an assist from a recent GAO legal opinion – but they should really train their fire on eliminating the risk corridor program as is. As with IRS tax credits, ObamaCare can’t survive without a convoluted shell game that hides the true cost of health care.

We’ll never get health care policy right until we can talk honestly about how it’s funded. Now would be a good time for the GOP to being that process.

October 1st, 2014 at 6:29 pm
GAO Says CMS Lacks Authority to Bail Out ObamaCare Insurers

It’s been a rough couple of weeks for power-hungry bureaucrats.

Recently, the General Accountability Office (GAO) issued a report faulting the Centers for Medicare and Medicaid Services (CMS) for being unable to produce itemized spending documents, and thus not complying with federal audit guidelines.

This week, the non-partisan government watchdog agency issued a legal opinion saying CMS does not have the authority to bail out ObamaCare-aligned insurance companies, unless Congress agrees.

GAO’s non-binding but influential legal opinion was generated by a request from congressional Republicans concerned about a CMS announcement that it would use money appropriated for other activities to fund ObamaCare’s “risk corridor” program.

Risk corridors refer to a scheme within ObamaCare to compensate insurance companies who lose more than a specified amount of money covering high-cost patients. Initially, funds are redistributed from highly profitable companies. But if the losses exceed a certain threshold, federal taxpayers step in via CMS, the primary agency implementing ObamaCare.

With all of ObamaCare’s pricey mandates – most importantly “guaranteed issue,” which requires insurers to enroll customers with preexisting conditions – there is concern that significant losses among participating companies could put taxpayers on the hook to bailout several firms in the health insurance industry.

It’s worth noting that GAO released its legal opinion on the same day Federal District Judge Ronald A. White struck down a similar bureaucratic power grab by the Internal Revenue Service. While the timing is unconnected, the central issue is not. In both cases agencies within the Obama administration are attempting an end run around the plain meaning of a statute in order to make the president’s legacy program appear to work better than it is.

The rule of law is more important than avoiding bad press for a poorly written bill. Bravo to the GAO and Judge White for having the courage to hold the executive branch accountable.