Sen. Chuck Grassley raised objections to the move with both Senate Majority Leader Mitch McConnell and Finance Chairman Orrin Hatch. | AP Photo House Obamacare plan keeps provisions targeting tax shelters

House Republicans dropped plans to kill an Affordable Care Act provision targeting tax shelters after Sen. Chuck Grassley opposed the move.

The legislation repealing and replacing Obamacare leaves untouched an ACA provision giving the IRS more power to target aggressive tax-avoidance moves by businesses and wealthy individuals.


Grassley, who’s long supported the “economic substance doctrine,” and who had tried for years to get it codified as part of other legislation, raised objections with both Senate Majority Leader Mitch McConnell and Finance Chairman Orrin Hatch.

Republicans’ previous Obamacare repeal bids would have deleted the provision.

Republicans will need every vote they can get in the Senate, where they have a slim 52-vote majority, to pass the House bill.

Grover Norquist’s Americans for Tax Reform had pushed to kill the provision because it enables the IRS to nullify tax maneuvers deemed to violate the spirit of the law, even if they obey the letter. Some conservatives say that gives the IRS too much discretion in tax disputes.