Eileen J. O'Connor

From 2001 to 2007, following more than 25 years as a national tax consultant with the IRS National Office and with major national public accounting firms, Eileen J. O’Connor headed the 600+ person, 350+ lawyer, Tax Division of the United States Department of Justice. She now practices law in Washington, DC, representing clients in civil and criminal federal tax investigations and in disputes with other government agencies, and formulates and advises on regulatory and legislative solutions to disputes with the U.S. government. She has presented oral arguments in the United States Supreme Court and in the United States Courts of Appeals, and served on the President's Corporate Fraud Task Force. Significant cases during O’Connor’s tenure at DOJ included corporate and individual abusive tax shelters and offshore tax evasion. She created and implemented continuing programs to coordinate parallel civil and criminal investigations and judicial proceedings with the Internal Revenue Service and United States Attorneys Offices throughout the country. Ms. O'Connor has taught in the graduate tax law program of Georgetown University School of Law, and was Distinguished Adjunct Professor of Tax Policy at the George Mason University School of Law, and has long been a frequent speaker at bar conferences and business seminars.

Health Care Decision Dangerously Invites Congress to Expand Taxing Power

June 29, 2012

The Supreme Court ruled yesterday that the Affordable Care Act’s individual mandate is not unconstitutional because it does not exceed Congress’ taxing power.  While requiring individuals to buy health insurance policies they don’t need (more on that later) was not within Congress’ power under the Commerce Clause, apparently nothing is beyond Congress’ power to tax.

The decision asserts that no one would argue that Congress could not impose a tax on a homeowner for failing to install energy efficient windows.  Really??   If lawmakers thought they could have imposed a tax on homeowners for failing to install energy efficient windows, they probably would have tried something like that long ago.  Until now, however, Congress has limited itself to providing deductions and credits for activity it wants to encourage, and providing excise taxes on, or no deductions or credits for, activity it wants to discourage (or profit from).

The Internal Revenue Code imposes income taxes on income, alternative minimum taxes on alternative minimum taxable income, social security and Medicare taxes on wages, estate taxes on the value of estates, gift taxes on the value of gifts, and excise taxes on a mindboggling variety of things and activities.  The Affordable Care Act represents the first time the Tax Code has imposed a requirement to buy something and provided a penalty – now, according to the Supreme Court, a tax – on not doing so.

The Court decided that the penalty for failure to buy the mandated insurance coverage was a tax, notwithstanding that its proponents swore it wasn’t a tax, the law doesn’t call it a tax, and unlike any other tax, no criminal penalties can be imposed for failing to pay it, and the IRS cannot file liens or levy on the property of anyone who fails to pay it.

To make matters worse, what the Supreme Court okayed yesterday was Congress imposing a penalty – excuse me, tax – on people for failing to buy insurance they do not need. Read More »