WASHINGTON (AP) -- House Republicans on Thursday grilled the head of the Internal Revenue Service on the agency's decision to apply the health care law's tax credits in states that decide not to carry out a key provision of the statute.

Commissioner Douglas Shulman defended the IRS rule that applies the tax credits to federal insurance exchanges, which are the bodies that will be developed to allow those without health insurance to buy it. He testified at a House hearing.

The issue is a new controversy over President Barack Obama's health care law. Several states already have decided not to establish their own insurance exchanges. In those states, federal exchanges would be created.

The credits would help consumers pay for private insurance beginning in 2014.

The IRS had to decide whether the credits would be available in the entire country regardless of whether states or the federal government ran the exchanges.

"Congress writes the laws and we interpret them. If you disagree, there's always the courts," Shulman told the House Oversight and Government Reform Committee.

Overall, Shulman said the tax agency will be ready in 2014 to fulfill its new role of providing tax breaks and incentives to help pay for health insurance. The IRS would impose penalties on some people who don't buy coverage and on some businesses that don't offer it to employees.

During the hearing, Shulman tangled with Rep. Scott DesJarlais, R-Tenn., a physician. DesJarlais accused the IRS of bypassing Congress by trying to expand the subsidies when the law gave the tax agency no authority to do so. "You're trying to twist" the law, he said.

Shulman responded that IRS lawyers "look at the statute and come up with the best interpretation."

The non-partisan Congressional Budget Office and the congressional Joint Committee on Taxation have interpreted the law in the same way as the IRS.

View post:

Republicans grill IRS commissioner on health care