Agency, including questions from members of the House Oversight committee on cash stimulus payments authorized early in the pandemic. This is two hours, 20 minutes. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] this subcommittee will come to order. Welcome everybody to todays hybrid hearing. Pursuant to house rules members will appear remotely via webex. A fact i may be the only member appearing in person, although all three of her witnesses are here in person. We appreciate that. Since many members are appearing by webinar let me remind everyone that pursuant to the latest guidance come all individuals attending in person must wear a face mask. And i am wearing mine except to make this statement. Members who are not wearing a face mask will not be recognized. Let me also make a few reminders to those members appearing in person. Well, actually they are not. I time is visible in the room directly in front of you. For all members appearing remotely, i know you are familiar with the webex pineapple that they remind everyone of a few points. First you will be able to see each person speaking during the hearing whether they are in person or remote as long as you have your webex set to active speaker view. If you have any questions about this please Contact Committee staff as soon as possible. Second, we have a timer that should be visible on the screen when youre in the active speaker with thumbnail view. Members who wish to pin the timer to their screens should Contact Committee staff for assistance. Third, a house rules require that we see you, so please have your cameras turned on at all times in order to be an active participant in this hearing. Fourth, members appearing remotely who are not recognized and should remain muted. Fifth, unrecognized members verbally. Members retain the right to seek recognition verbally. Members will be recognized in seniority for questioning. Lastly, if you want to be recognized outside of regular order you can identify yourself in several ways. You can use the chat function to send a request. You may send an email to the majority staff or you may unmute your mic to seek recognition. Obviously we dont want people talking over each other so preference is members use that chat function first or email to facilitate formal verbal recognition. Committee staff will ensure im made aware of your request and i will recognize you at the appropriate time. We will begin the hearing in just a moment when they tell me where ready to begin live stream. Okay. Committee will come to order. Without objection the chair is authorized to declare a recess of the committee at any time. Without objection full Committee Member katie porter, the gentlewoman from california, and representative bill passed grell, the from new jersey on the ways and Means Committee shall be permitted to join this subcommittee of the recognized for questioning during the course of this hearing. Without objection it is so ordered. I now recognize myself for an Opening Statement. The Internal Revenue service collects more than 3. 5 trillion in taxes, roughly 95 of the federal revenue. And it manages the distribution more than 370 billion every year in refunds. The revenue the irs collects for the federal Government Funds critical programs and benefits like Social Security, medicare and Veterans Health services. The billions of refunds distributed to taxpayers each year as a lifeline for many americans, especially those at or living below the poverty line. The irs is a Critical Agency that we turn to in the nations our dire need. Todays hearing hearing will examine how that agency was illprepared to meet those needs. We will look at how decades of deliberate starvation of the irs prompted a dire financial situation and left an agency with what if a Taxpayer Advocate referred to as a prehistoric i. T. Infrastructure. We will show how a decade of attrition hindered the irs ability to meet the complex needs of our nation during the unprecedented pandemic and attendant economic collapse. According to the Congressional Budget Office from 2010 through 2018, when republicans were in control of the Congress Lawmakers cut the irs budget 20 in inflationadjusted dollars. Resulting in a 22 staff reduction. 30 of these staff were in the irs enforcement positions. After years of disinvestment incapacity, unpaid annual taxes owed but not collected are estimated at 450 billion a year. The starvation and chronic underfunding also prevented the irs from investing in i. T. Systems. I ask unanimous consent to enter into the record the treasury Inspector General for Tax Administrations report entitled legacy systems management needs improvement. Which finds that nearly threequarters of the 400 active irs systems reviewed by take to our legacy, meaning very old. Another disturbing finding is that report, in that report was irs does not have a handle on how many legacy systems that actually has or the costs associated with the systems. This does not sound like an agency ready to fully serve the American People during a pandemic. This past year has highlighted just how many individuals rely on the irs. In addition to administering the 2020 tax filing system, the irs was also cast with distributing emergency Economic Impact payments, or stimulus checks, to americans. The irs had to manage the effects of the pandemic while it was simultaneously expected to mail 170 million additional aimless checks to americans in need. Years of i. T. System neglect and the failure to modernize legacy systems that date back to the Kennedy Administration in some cases prevented irs from effectively transitioning to virtual operations. Like many agencies the irs sought to find ways to keep its workforce safe while trying to meet its expanded mission. But it didnt stand a chance. Its gutted workforce and anachronistic i. T. Systems were simply not enough to keep up. The pandemic horse the irs to shut and many of its core operations across the country, including taxpayer phone lines and walk in centers. The agency largely abandoned taxpayers, many of whom are all of our constituents at a moment of great confusion and concern. As i have noticed, the irss operational challenges did not happen overnight. As shown in the tables on the screen, since 2010 the previously controlled Majority Congress ransacked the irss budget and agency was forced to reduce its workforce by 22 . Thats 20,000 fulltime employees. These significant repeated budget cuts forced the irs to make different after difficult tradeoffs. Leader cut to choose between Quality Customer service to taxpayers and forcing tax laws and updating i. T. Systems. The severe financial technical and staffing problems are a direct result of years of partisan hostility, reckless socalled investigations, and unwarranted budget cuts from the majorities than in control of congress. And today when the American People are relying on the irs, the most, the agencies gasping for air. While our witnesses will testify that the irs did what it could with the available resources, its what didnt get done thats troubling. Its the millions of taxpayers who are unable and still are unable to get the refunds because they filed a paper return. Its the millions of tax returns that hit a snag and the corresponding taxpayers couldnt get assistance because call centers were closed. Its the 9 million americans who have yet to receive that stimulus check from april. Primarily because the irs does not have your information, or because their income is so low they dont qualify to file a return. These are our nations most vulnerable people. We have a duty to help them in the midst of this crisis. Millions of people desperately rely on the irs to receive muchneeded Financial Assistance to pay for medical care, groceries, housing, are still waiting for those refunds and stimulus checks if these people are like my constituent joseph who did not receive his 2018 tax refund until february of this year. Because his wife passed away and the irs held up his return to get more information. They think the issue which the irs promised joseph would not be a problem again plagued his 2020 tax return, which still has not been processed. Asked to insert in the hearing record a statement from joseph about his continued concerns with the irs. Other constituents could follow the rules involved and are being told to just wait. People cant afford to just wait. Wait. They need this Financial Assistance now. On september 16, i wrote the irs asking about these types of delays and the inconsistent responses staff have provided our constituents, irs staff. That was three weeks ago. Ive yet to receive a response. Its also important to point out the budget cuts to the irs have burdened our nations for in another important way. When the irs collects taxes each year it relies heavily on taxpayers to report their income and taiko at the about of tax they owe. Most people, in fact, 99 of them do. Some taxpayers often the most wealthy among us including potentially the current president of the United States fail to properly pay their taxes. They hide earnings, claim dubious deductions such as 70,000 for hairstyling, not a deduction available to most of us, and they fail to properly pay their taxes as a result. Since 2010 as a direct result of these budget cuts from the past, the irs has been less to enforce tax laws because it cant. If you take a look at the chart on the screen you will see that between 20112019, the percentage of individual income taxes it examined dropped by half, half. Thats catastrophic. And it directly impacts revenue for the federal government. The weakening of these vital effort harms both taxpayers and Public Confidence in the tax system. It does help the wealthy and encourages even more of them to. And cheat the tax system. I was pleased with reports on monday indicating the irs is investigating allegations of criminal tax fraud at the National Rifle association. I have long click an great effort asking to arrest and depart for justice to nra and its ceo, wayne lapierre. According to studies out of the university of pennsylvania i simply beating up the auditing capacity of the irs to allow for more oversight of the super wealthy, those claiming more than 10 million in adjusted gross income, our government will collect more than 7. 5 trillion over the next decade. More than paying all of the pandemic related expenses by this federal government combined. Thats the size of the tax gap of the wealthy who fear little consequence right now from a beleaguered irs, and have left in our nations coffers. I look forward to hearing from our Witnesses Today in ways congress can help support the irs, instead of politically targeting the agency and stripping get bear of the resources it desperately needs as we have done all too often in the past. We hope to ensure the irs chief Information Officer and cio throughout the federal government played a pivotal role in developing and beating Agency Performance goals. I look forward to working with my colleagues on both sides of the aisle toward a legislation that does just that. I hope this hearing will garner the evidence and justification needed for congress to build back the agency that is so unjustly ravished over the last decade. And so prepared to help struggling americans in dire need of assistance during the worst endemic in 100 years. And with that i call upon the distinguished Ranking Member mrg statement. Thank you, chairman connolly. I appreciate the opportunity to have an Opening Statement. And like you, i also have constituents who are awaiting refunds, and they have been seeking for them, many of them as far back as february. I certainly share that. I would also just say, mr. Chairman, that i believe its improper for you to accuse the president or seemingly accuse him of not paying his taxes. In the first place, you dont know that. I hope this hearing today will stay focused on issues that are germane to the topic at hand, specifically i. T. Modernization. That is what this should be focused on, and i hope we do that. And with that let me just say that this subcommittee has been tracking, as you all know, the legacy i. T. Systems and the reality that those legacy systems pose a risk to federal Agent Missions and the purpose that many of our agencies have. And with many of these agencies, especially the irs, some of these older i. T. Systems, they are very complicated and they are going to require modernization. It is inexcusable for us to be facing some of the issues we are facing, and for our constituents and the american taxpayers to be the ones who are taking it in the gut over this. And without modern Technology Systems that can meet modernday challenges, our Agency Missions are at risk, and taxpayer resources will continue to be spent on archaic and inefficient Technology Systems of ages past. This committee understands how the federal government continues to spend a majority of the i. T. Budget nearly maintaining physical legacy systems instead of investing in i. T. Modernization reforms, which needs to occur. With a majority of agency i. T. Spending going to the operations and maintenance of these old systems, new investments are crowded out. I think thats what we need to get some answers today. We have talked a lot about different approaches that can be utilized and bring multiyear i. T. Funding mechanism to be established. I think we need to go beyond talk and start actually getting some answers and hearing what some of these agencies are doing to implement modernization efforts. And it is up to each of these agencies to utilize some of the resources that have been made available. With the irs specifically. Some modernization efforts, despite repeated large investment by congress which, lets keep in mind, they are really investment from the american taxpayer. In spite of these large investments, the irs continue to drag on and seemingly never reach completion of modernization. We need answers for those types of problems. How in the world can congress have faith that another one or 2 billion, or whatever it may be, at the end of the day that will be proposed by the house and the senate will actually get anything in return . Again, i say we need answers to these questions. This committee wants to understand how these pervasive and continual challenges can be addressed. This is a bipartisan issue with potential bipartisan legislative solutions. But we have to understand the actual problems preventing agencies like the irs from moving into modern, agile and Robust Technology operation environments in the future. To be fair, we all know that in a Rapid Response to the global pandemic, there have been a number of emergency assistant programs that have been passed into law this year, and it has been unprecedented. We all understand that. There have been a lot of mandates that have been involved, and as a result we have seen nearly every american taxpayer received checks, and that occurred in an extraordinarily swift manner by the irs. And for that we are grateful. You look back at the economic stimulus act of 2008. It took weeks in weeks for that to be doled out. But like every other large enterprise in the world, the irs has set its operational challenges related to the pandemic. We get that. There have been issues with the cares act stimulus payments reaching their intended destinations. There have been a number of issues but not all the issues, and they get this as well, not all the issues and problems have been technologically related. There have been legal issues, procedural issues, workforce issues, data access challenges. But we need to understand the actual calls of problems before we can recommend any policy solutions. And i hope that the hearing today will provide some information in that regard. And to that point, commissioner rettig, hope you and the other Witnesses Today can help me and my colleagues understand how we can address the underlying carriers preventing Successful Technology modernization so that we can assure the success of the irs is critical mission. Congress cannot afford to blindly continue throwing money at i. T. Problems. Weve got to find a new approach. Weve got to have answers. Weve got to have modernization. And so with that, mr. Chairman, i want to thank you i do want to thank our witnesses for bearing with congress in these proceedings. I i thanked him for participatig in todays hybrid hearing, and i appreciate the opportunity to be able to at each of them here today. With that, mr. Chairman, i yield back. I thank the gentleman and i look forward to working with him and i thank him for the spirit the bipartisan spirit he has laid out for us moving forward in terms of trying to address especially the Technology Challenges irs is facing. I would also asking and was considered that series of articles talking about the president s tax situation, including the assertion that in the last two years he paid 750 per year, and no taxes for ten of the previous 15 years come that such is the chairmans opinion, that is a series of analyses based on documents not denied by the white house called fake news but not a single item including the deductions in the payments i cited has been denied by the white house. I enter that into the record so that its clear its not just one members opinion, including this member. With that i see the chairwoman of our full committee is on and i want to defer to or for any opening remarks she may have with respect to this early. Welcome, chairwoman maloney. Thank you so much to my good friend and colleague, chairman connolly, for holding this important and timely hitting on the irs and the pandemic. First i want to congratulate you on already convincing the irs to move back the deadline for low income individuals to register for an Economic Impact payment. Until monday the deadline to register for the eit was next wednesday, october 15. And now these individuals who earn so little they dont even qualify to pay taxes have until november 21 to claim this vital resource. And without this here and at the chairman to work extension was unlikely so congratulations on improving the lives of those who need this money the most. This essay shoot a victory for the subcommittee and for the struggling on the brink of poverty across this nation. For the past decade theres been a concerted effort to get the irs and to starving of the funding it needs to do its job on behalf of every taxpayer in this nation. Sadly after years of partisan attacks and neglect it was no surprise that the irs was not prepared to handle the unique circumstances that the corona crisis presents. After all, this agencies operating on information Technology Systems that date all the way back to the Kennedy Administration. We can now see the very real consequences of the past decade. We cannot simply decimate essential federal agencies, and then expect them to miraculously meet their missions in times of crisis. For example, in june, just a few much into the pandemic, we discovered that the irs sent roughly 1. 4 billion in eit to dead people. Some of my constituents told me that they received eits for their dead relatives and we are still waiting for the own checks. While the irs had access to the Social Security administrations that file, the treasury Departments Bureau of Fiscal Service which distributes payments did not. This fix seems simple. Lets share the file and reduce improper payments in the next round of stimulus checks. If it needs to be a legislative fix, lets make it happen. Today were going to hear from witnesses who claimed that the irs did the best they could with what it had. But thats not the real question. We need to be asking what the irs could have done to help our country if it had been properly funded and adequately staffed here instead of being subjected to use of data republican abuses. Another example my constituents told me they threw away i was issued debit cards because they looked like a scam, and the irs failed to inform them that the cards were coming. Others said the online quote get my payment quote tool was confusing and made them think they were ineligible for an eit when they were, in fact, eligible. Today we will hear that individuals across our nation including my constituents are still waiting to receive money that their government owes them. Money they need to buy medicines, pay rent, put food on their tables. Past republican congresses prevented the irs from investing in staff and technologies that would have allowed for a smooth transition and a continuity of service to all taxpayers throughout the pandemic. Because of the decades of partisan attacks, many individuals and Small Businesses might not see their tax returns anytime soon. They may not see the Economic Impact payments, or eit, until september of 2021. They need this money now. Not in the 11th month but now. Thats our congress design these stimulus payments and it seems clear that the irs is not equipped to meet this moment. The systemic decade old gutting of the irs force the agency to shut down Taxpayer Services and assistance just when the rules were most confusing and taxpayer needs were greatest. The longterm starvation of the irs means that victims of Domestic Abuse can have their stimulus payments ceased because the irs doesnt have the resources and staffing needs to help address this problem. For many women who are Domestic Abuse victims, this lack of irs resources means they can achieve economic independence and escape abusive relationships. This problem but the irs shouldnt shrug his shoulders and point them to the court system which they cant afford to participate in. Lets find a solution here today and help these women. The lack of resources at the irs means that the wealthiest residents of our nation, those reporting more than 2 million a year, can avoid paying property taxes because there are so few capable enforcement staff available to audit them. There is little chance they will be audited and prosecuted. Instead, the irs has been auditing the poor and the foldable because its easier. Our government is leaving on the table trillions of dollars owed by the wealthy. Finally, i went to express my support for the legislation. I know the chairman is working on. Legislation that would require agencies to think about how technology would improve Service Delivery and Agency Performance across the enterprise of the federal government. I support these types of critical measures that often take place under the legislative radar. Thank you so much, chairman connolly, for all of your hard work that you have done in this area. I adhere i am here to his fortune working under way. It is important that we reached this point of reckoning, and we need to move forward. Mr. Chairman, again congratulations on your achievements and holding the irs responsible and moving forward with ideas to make the more uptodate. I. T. Savvy for the future. I thank you so much and the yield of expert i think the distinguished chairwoman of the full committee, ms. Maloney, and i thank you for your leadership and for your support. Very much appreciate it. Now i i would like to introduce our witnesses to call first witness today is charles rettig, who is the commission of the Internal Revenue service. Then we will hear from erin collins, the national Taxpayer Advocate at the Taxpayer Advocate service and filing will hear from vijay dsouza who is the director, Information Technology and cybersecurity at the Government Accountability office. The witnesses, if you will all rise and raise your right hand. We swear in a witnesses. [witnesses were sworn in] let the record show all three of our witnesses answered in the affirmative. Thank you. Without objection your full written testimony will be entered into the record in full. With that, commissioner rettig, you are not recognized for a five minute summation of your testimony. Welcome. Thank you. Chairman connolly, Ranking Member hice and members of the subcommittee thank you for the opportunity to discuss irs operations and her efforts to taxpayers during the covid19 pandemic. Nearly two years into my term as commissioner i remained extremely proud to be working with the irs knowing that 96 of the gross receipts of our country flow through the irs and strengthen my belief that a healthy, functional irs is critical to the overall success and wellbeing of our country. The importance of the irs to every american has become especially apparent since the spring as a nation has faced unprecedented challenges. The irs has been at the forefront of successfully providing rapid Economic Relief to taxpayers during covid19. The irs response illustrates a critical it is for the agency to receive consistent, timely and adequate multiyour funding such that we can succeed in providing the services that our country so rightly deserves. This finding is critical as asa nation continues to whether covid19 and will help the agency prepare for future emergencies. Irs employees have worked around the clock since midmarch to implement major provisions of the cares act especially the Economic Impact payments to up millions of americans during this challenging time. So far more than 160 million Economic Impact payments have been issued totaling more than 270 billion. With many of the payments recognizing more than two people, or payments for household as opposed to an individual. Into living Economic Impact payments we balanced the statutory requirement to deliver these payments as rapidly as possible with the need for accuracy and a concern about potential fraud. I also want to call to attention and port number. The treasury Inspector General for Tax Administration confirmed that the irs correctly compute the payment amount approximately 98 of the payments as of may 21. The 98 figure is great. However, theres more to do. The strength of her agency is our employees. Our employees want to do more, and we will do more with the assistance of congress. We have remained concerned about getting payments at the people who dont normally file a return, including historically underserved communities of our nation such as the lower income taxpayers, Homeless Community and various others who do not normally interact with the government or certainly with the Internal Revenue service. We work with our partners to translate Economic Impact payment outreach materials into more than 35 languages and had distributed these materials throughout the country. From the beginning we have been aggressively seeking the assistance of communitybased organizations and many others in identifying eligible americans. We ask for your help and help of every member of congress in sherry interspersing this information widely and broadly. We realize a difficult this time has been for so many americans. For that reason the irs also provide important administrative relief. We postponed the finally filing deadline, the latest taxpayer ever in the history of our country. We implemented the People First Initiative under which we temporarily adjusted our processes to help people and businesses during these uncertain times. While pursuing our responsibilities with respect to the cares act and covert release, we had to adjust and redeployed resources and our employees have remained dedicated to delivering the 2020 Filing Season as they continued to process electronic returns issue direct deposit refunds and accept electronic payments. As of september 25, we have processed more than 153 million individual returns and issued nearly 122 million 122 million refunds for a total exceeding 289 billion. While we were also processing Economic Impact payments and preventing Cyber Attacks and a host of other areas. During this time we have also focused on enhancing the experience of taxpayers with limited english proficiency. For the First Time Ever a form 1040 file connection will be available in spanish. Basic impact information is available in more than 20 languages. People who call it can get Interpreter Services are more than 350 languages, and for these actions i extremely proud of our employees. On the enforcement side we have redeployed resources to the best of our ability to highlight and focus on certainly high income individuals and certain types of transactions that such individuals participate in. Our faith in reopening has been difficult. We understand from herbs of Congress Come for taxpayers and others. However, health and safety of our employees had to remain paramount threat. Employees shared the same health and safety concerns as shown by every other american for themselves, for their family, and for for the neighbors and r community. And we had to focus on that while also trying our best to respect our responsibilities to this country, both with respet to Filing Season as well as with respect to issuance of these payments, maintain a vigilant, robust enforcement atmosphere, protecting cybersecurity issues. And we receive more than 2. 5 million attacks per day on our systems. 1. 6 billion per year. And we understood that in the situation where we scale back our activities where we close the majority of our physical facilities, where we moved almost 57,000 people to teleworking, we undertook all of that while also doing our best to maintain our responsibilities to this country from every perspective. With that, i want to just reemphasize that we depend on consistent multiyour funding to deliver topquality services to our taxpayers, to protect the health and safety of our employees come to conduct enforcement initiatives, to provide guidance and to support badly needed longterm monetization efforts. Chairman connolly, Ranking Member hice and members of the subcommittee, this concludes my statement and i would be happy to take questions. Thank you, commissioner rettig. Ms. Collins, you are recognized for your fiveminute statement. Chairman connolly, Ranking Member hice, and distinguish members of the subcommittee, thank you for inviting me to testify todays hearing the irs and the pandemic. I started by job of the national Taxpayer Advocate on march 30 just after the irs and much of the country speedy let me interrupt. Without penalizing you. Thats my birthday, so congratulations. Well, thank you. It was a very important day for a lot of reasons. So at that point most of the country was shutting down due to the pandemic and little did i know then how much the pandemic with impact of Tax Administration for the irs but also with respect to taxpayers. As we continue to grapple with pandemic, my best wishes go out to all those impacted by the virus. In my Statement Today i will share three predominant points about the past six months. First, despite its constraints the irs has done its best job to handle more work with reduced funding. But Taxpayer Service and revenue collection has both suffered over the years as you have noted. In the height of the issues Filing Season and was given the task of dispersing the Economic Impact payments to some 160 million eligible individuals and their families. Millions of homes ordinarily dont file a tax return with the irs and the irs had to find them. This Filing Season gilliland majority of taxpayers did not experience problems in filing the return or the receipt of the refund. Over 90 of individual taxpayers filed their returns electronically and efile capabilities were operational throughout the pandemic. About 70 of the taxpayers claimed refunds, most of those refunds were paid without delay. Particularly 83 that were dispersed a direct deposit. But as has been noted its the people who did not receive the refunds that were most concerned with. Second, despite the irs strong performance, many taxpayers experienced significant delays resulting in financial hardship. Many taxpayers still file their returns on paper either by choice or by necessity. And in 2019 the irs receipt of 18 million individual paper income tax returns. This youre for the protection of health and safety of its employees the irs shut down its Mail Processing operations from march to early june. During that time millions of tax returns, checks and other correspondence piled up as of september 19 the irs estimated it had a backlog of about 5. 8 5. 8 million pieces including an estimated 2. 8 million unopened returns. For taxpayers counting on those refunds to meet their basic living needs, the delays have been particularly painful. In a typical year the irs receives about 100 million telephone calls and several million visits to its walking packs. System center due to the pandemic the irs shutdown its tollfree lines for about a month and then slowly begin resuming service. Also shut down the Taxpayer Assistance Center for about three months. Some taxpayers experienced delays in the receipt of the Economic Impact payment, and as the commission noted the Inspector General found the irs correct the computer about 90 of event of the eip correctly, but based on one at 60 million payments that was about 3 million payments of eligible individuals who were claiming additional amounts that they are now requesting from the irs. Plus i believe we have identified several million cases were payments were not made at all. At first the irs took the position that most taxpayers who wanted their increased payment amounts would have to wait until they filed their 2020 return. At my office and others urge the irs ibis to find ways to correct some of these underpayments immediately. The irs has since developed processes and programs to fix many of these problems. However, the irs simply doesnt have the resources necessary to make a manual casebycase adjustment and potentially several million cases. The individuals still have a right to file on the upcoming tax return but that makes me to my final point. The irs desperately needs more resources to do its job of helping taxpayers and collecting revenue. Theres an old expression, you cant get blood from a a turni. The irs continues to be starved its resources, it will continue to struggle for in it needs moe customer taxpayer representatives, agents, and to assist those taxpayers and it needs more modernization of its i. T. Systems. The ibis i. T. Struggles are known, and as a chairman noted to combat its challenges the ibis budget has been reduced by about 20 since 2010 while the number of tax returns has increased 13 . As result the irs lacks the staffing it needs to serve taxpayers. Although i am new at this job it is clear the irs is well behind privatesector Financial Institution in providing muchneeded services. Americans are entitled to Top Quality Service and a taxi administration they can trust and work with. Thank you for inviting here today and i welcome working with you and your step in the future and happy to answer questions. Thank you, ms. Collins. Mr. Dsouza, welcome. You are recognized for your fiveminute summation. Thank you, chairman connolly, Ranking Member hice a member of the subcommittee. Thank you for the opportunity to testify today on gaos prior work related to irss i. T. Operations and modernization efforts. My name is e. J. Dsouza. Im directive information intelligence ibis good team but the statement draws on what conduct of our team as well as our Strategic Issues of Financial Management teams. Effective i. T. Is essential to irss operations and was as and when his note important to the distribution of millions of Economic Impact payments disperse as part of the cares act. Geocode has entered has work and when we at efforts in this area. For this most recent fiscal year irs spent over 3 billion on i can which look more than 80 was for Ongoing Operations and less than 20 was for modernization activities. Irs i. T. Budget has been fairly flat over the last ten years. One of irss goals specifically is to reduce the proportion of spinning for ongoing i. T. Operations. Although irs does make effective use of i. T. In billions of transactions you up i work as the numerous issues related to i can operations and modernization. I will mention a few issues now. First, gaos response friday i has financial statements. For this process we says i to control the village irs financial system. Identify cybersecurity issues and we make recommendations. We also track irs progress and addressing prioryear recommendations. Most recently in may we identified 18 new cybersecurity recommendations including these new recommendations with total 132 cybersecurity videsh and remain outstanding. Second, as part of ongoing assessment of irs operations were identified i. T. Issues that limit the ability to conduct its mission while highlight that i will highlight a couple. In january 202020 we reported on computer problems irs Customer Service representative experience that caused some phone calls to disconnect midcall. We recommended and irs agreed issued both identify the causes of this problem and track the resulting downtime. In february report irs could only capture certain business Tax Information in pdf format which is part of britain to use and other electronic open data formats. These formats would better allow the agency to analyze information for enforcement and other analytic activity. We recommended irs consider the cost and benefits of converting this information. Although i was disagreed for one of its Business Units we think this is worth doing ever help irs with compliant efforts. Finally with conducted numerous examinations of irs i. T. Measure activities including those related to its efforts to modernize Computer Systems which as others have noted some of which are based on programming languages more than 50 years old. In may 2016 we reported on irss use of older programming languages for key Computer Systems most notably his individual master file which is a Court Individual tax processing system. We recommended irs develop a plan with timelines to replace imf. Irs has an effort underway which will replace core part of the imf but does not yet have a plan for replacing the overall system. Recently i rest acting cio told us irs beginning to look such a plan. In june 2016 we reported on irss process for prioritizing its i. T. Investments both Ongoing Operations and modernization activities. For modernization activities specifically we found irs had not fully develop and document a prioritization process. I rest acting cio has told us they hope to have this fully implemented for fiscal year 2022. In june 2018 we look at irs management of several operations and modernization investments. We found irs did a fully address the number of assessment and Risk Management activities that were needed around those investments. We also identified several weaknesses in irs workforce planning activities. From this report we made 21 recommendations. As a to the irs has addressed three and taken steps to address others and we recently started work where we will update this assessment. Every aspect of i. T. Including cybersecurity operations and modernization efforts is critical to the mission and service to the american taxpayer. Going forward continued attention to the issues we have identified is important to irs ability to meet the challenges it faces. Also born as others have been nd is stable and consistent funding for irss efforts. Mr. Chairman, and mr. Ranking member this concludes my statement. I happy to answer any questions you may have. Thank you very much, mr. Dsouza. Just a clarification or in your testimony you referred to the fact that the irs budget has been relatively flat. Do you consider a a 20 cut ins budget relatively flat to be sold in a 22 reduction in its workforce . So im specifically talk about the i. T. Budget, not the overall budget. Theres definitely a different. Just want to clarify, thank you. That sheer knuckles and the distinguished distinguished congresswoman from the district of columbia ms. Norton for her five minutes of questions. I thank my good friend from maryland, particularly for this hearing. I think excuse me. Im from the great commonwealth of virginia, not from maryland. [laughing] what a terrible mistake. Yes. We love maryland but we love virginia more. But of what you do know that the district both maryland and virginia so i thank you for that, too. Thank you i think if people are listening to this testimony that the average taxpayer [inaudible] American People are extraordinary compliant but they are astonished by what the lord about the state of the irs. I have particularly interested in Economic Impact payments. They go to people who dont pay their income taxes because their earnings are not enough. According to the statistics i have come on september 18 the irs said it was going to start mailing letters to these 9 million americans who dont pay income taxes but are due to get this Economic Impact payment. These are people who have very low income. But i do want to say how happy i am that the irs has just extended the registration deadline for these nonfilers, these low income people, to claim this Economic Impact payment to november the 21st, 2020. I am asking all members to email, consistently email your constituents and let them know, we know they are democrats and republicans, that they can still get an Economic Impact payment until november 21. I think thats thats our obligation. Mr. Rettig, this is my question for you. How many of these roughly 9 Million People who are eligible to get these fonts, this Economic Impact payment, have yet to register a claim for an Economic Impact payment, these low income filers . How many people have not received the eip, is that the question . Of the 9 million have not yet registered to claim that Economic Impact payment. How many of these low income people have not that is not necessarily low income. That pool was put together through a variety of indirect methods by a right of federal agencies, then tried to matcht to our system. So i would not wrap that with its about 8. 4 million. The. The letters have gone out. Okay, thank you. Its 9 Million People. I does what you know how many have yet to claim their Economic Impact payment. Im having a little difficulty hearing you it is a question how many people have not claimed the payment . We are not able to quantify the number of individuals who have not been identified. Mr. Chairman, i ask that that number be required to be later given to the committee. Mr. Rettig, is a possible and eligible income individual not receive a payment . Is everybody going to receive it . We intend for everyone to receive the were holding over seven outreach event this week. Pretty much every week. We have provided toolkits that 535 members of five members of congress to be distributed to all of their local offices. We have interacted with 137 different ethnic Media Outlets around the country. Hundreds and hundreds of homeless shelters. I have participated in person at homeless shelters around the country and other similar event. My time is a limited, ive got to go to the next question but thats very good to hear. Mr. Rettig, they cares act says that provisions regarding the stimulus should be directed. Thats 1200, to every individual. There is no language in the statute directly or indirectly suggests incarcerated people are not eligible. Why were incarcerated people not receiving their 1200 . Thats an issue to present to treasury, and its an issue that is actually in litigation and would be inappropriate for me to comment upon litigation. Mr. Chairman, i just want to say that many of these are joint filers. They have families, they have childsupport payments, and asked the committee to follow up on white incarcerated people do not receive why incarcerate people to not receive these payments were the cares act since every eligible person may receive. And i thank you very much for the time given, thank you. I do want to respond, ms. Collins brought up some interesting issues during her Opening Statement and one of which, and its been said by some others here today about the irs starving in terms of funds. I would for the record bring back to reality that in 2010 that was a watermark year for irs funding and what did they do when they had that kind of funding . There were lavish inventions, ridiculous videos, targeting of conservative groups and i think its important for these type of things to not be repeated. Commissioner rettig, were trustful you will be able to make sure this type of wasteful spending does not happen again but also was mentioned, i believe i think i got these numberscorrect, i was trying to write them down. 18 million tax returns for this past year, 5. 5 million in backlog and i believe it was 2. 8 million that were unopened. As it relates to the paper filings, those that were mailed in, that is certainly nowhere near 90 percent of completions. 18 million filed and 5. 5 million backlog and nearly 3 million unopened is frankly an unacceptable amount. Were hearing from our constituents right and left wider tax returns have not come back so just on behalf of those constituents not only in my district but across the country, when can they expect those mailed in returns to be opened, dealt with and then receive their refunds . As of september 25 we received 12. 9 million returns. We have a current paper backlog of approximately 5. 3 million, of which we estimate approximately 2. 5 million is returns. We are processing our backlog at the rate of about 1. 3 million per week which i think is exceptional in march , april time frame we were about a 23 million backlog so we have about 1. 3 million were going through per week, keeping in mind that we average somewhere between 3 to 500,000 pieces of mail each week and so we need to open to determine is it a return or is it some other type of correspondence so we do prioritize the return in terms of the processing of the paper mail including correspondence that is received. We process the returns on a priority basis and of that we process returns on a priority basisso i can certainly tell you sir that our people are working really hard. Were doing two ships and haveoffered overtime to all our people to get through this. It sounds to me from what youre saying thatmost of the backlog should be pretty much dealt with by the end of this month, is that correct . I cant say that because it depends what they open. If the straight averages work, we are going through 1. 3 million per week. We have 5. 2, 5. 3 million pieces total but keep in mind 3 to 500,000 come in on top of that so its a process. I can vouch for the efforts and certainly vouch for the desire and sensitivity and remember that our workforce is reflective of the communities they live in and the communities that their processing processing these returns for. Thank you for your effort but effort does not resolve the issuefor those who are waiting. We have a lot of people who are struggling. Let me get an it collection here. Congress has provided billions as you well know of funding for it modernization and theres mixed results. Were still a long ways behind. If more funding is given for it modernization, how can you ensure that those funds are going to be effectively used and managed so that we actually have the end result of it modernization rather than continually trying to maintain and support legacy systems . The upper patient your marks what the funding would be four and with the separate allocations, i think we could cover that. Also in terms of efficiency and it efficiency it should be noted filing seen in 2019 we set records for processing per second per hour and permit and we broke those Filing Season 20 during the covid pandemic with most facilities shut down and came to 2. 275 million returns processed per hour, 632 per second without any logical errors at the same group of it folks who handled our Filing Season were also responsible for implementing the it payments which were not only for individuals that we had information but individuals we did not have information and then we inherited the programming as well as for Social Security administration and we created portals that more than 14 Million People came in through a nonviolence portal took care of all that at the same time. We dont have the luxury of on boarding. With that situation. We had people who had to multitask and they were 15 to 17 hour days, from march through july and i would say that our folks, i would suggest and request on an it appropriation a specific appropriations from where we are, Taxpayer First act was passed from bipartisan support and has tremendous provisions for modernizing the systemsof the Internal Revenue service but it did not yet have any funding associated with it. So in my mind that these things come together. We take our responsibilities to congress, to the American People and to our employees and the neighborhoods are employees live very seriously. We want to perform and we want people to be proud of the Internal Revenueservice. It was a great answer but i know my time has expired. Im available. Let me just say mister in hindsight it may be implicit in your line of questioning is despite the accomplishments for the irs. I think mister is pointing out, i gave some examples in my opening remarks, were hearing from people who are being well served, who are panicking in some cases about their responses in direct payments. And we need a better response frankly in terms of liaison with them to congress to be able to answer those your because generally, we hear frompeople when things arent working. So that maybe a false incentive but its real human beings and real so i know what my friend mister highest and said. We need to work on that and i think frankly, that the liaison was to be able to go to some kind of ombudsman who can help solve problems taxpayer would be very welcome under these. May i provide a brief comment. In conjunction with that we had a phone line for that essentially overrun with the volume so where sensitive and understanding and it was my bright idea to create an email box that our folks could work around the clock on emails received. We received i think over 100,000 emails from a house. Gov or senate. Gov so my bright idea overran usas well but it was an effort to get there. I spent 36 years on the outside representing individuals with respect to the Internal Revenue service and tax related matters. I very much understand the concepts that each of you are there. I take these concepts to heart and there have been comments with respect to lower income individuals as well as different ethnic communities and i have not been in front of many of you before but i want to add into this two points that im proud and im closing here , on the first commissioner in the history of the Internal Revenue service who came into the United States as a refugee from the refugee camp and whose parents did not speak english what happens now live in the United States. Im also the first commissioner to come to the Internal Revenue service has a son or daughter was activeduty United States military has deployed twice as the privilege of wearing the flag on his shoulder and i think that to heart. Those are the issues as to why i came on board. Thank you Mister Reddick and we certainly honor your personal history and commitment. Remember, members of thomas are also patriots and committed to their constituents, trying to make things workunder very adverse circumstances. Thank you mister highest and for allowing me to piggyback on that. The chair calls on the gentleman from maryland for five minutes. Thank you mister chairman, can you hear me . We can hear you loud and clear. Terrific, thanks for the hearing. Mister reddick, i want to give you credit because were certainly putting a brave face on in view of these dramatic cuts that the irs has experienced over a period of years nowand the numbers are breathtaking. The workforce having been reduced by 22 percent since 2010 is obviously under copy irs daily operations in a significant way. I want to salute the frontline workers at the irs the rankandfile who are really engaged in acts of heroism every day trying to lift up a caseload that i think is drowning so we have to get more resources to the irs and that has to be a number one priority. For congress and i think it ought to be a priority of any administration. Unfortunately we have not seen that from the trumpet ministration. When the irs doesnt have enough resources, the fact of the matter is that the rich get richer, highend tax sheets away with not paying their taxes, fraud fraudsters are able to get away with their schemes. And those who ought to be on the receiving end of severe and significant enforcement by the irs are not. Meanwhile, those average americans out there who play by the rules and look to the irs to engage with them in a straightforward way just getting their refunds, make sure the urge income tax credit is accessed, make sure that these economic payments that come from these stimulus measures being put in place are getting to them. Theyre the ones that are getting short shrift here though i think thats whats so offensive to me is when the irs doesnt havethe resources that it should. It cant do whats necessary to enforce against those who are trying to evade the tax obligations. On the one hand. And it cant provide the kind of service to every day americans for playing by the rules on the other hand read ms. Collins, can you talk a little bit more with us about how Adequate Funding around enforcement can actually pay huge dividends for the irs. And plan went down on the kinds of schemes and efforts to avoid tax payments that we know aregoing on out there every single day. Some numbers behind. Archive system is a voluntary tax system and depend on people willing every year is down, a lot that form and pay the appropriate amount of taxes so i think enforcement is a reward to those who voluntarily comply and i think if the book does not see that the irs is enforcing the law were going to be at risk of losing people continuing to voluntarily comply. I appreciate that because sometimes those who want to attack the irs on ideological grounds so to say, be afraid, the taxman is coming but when the irs is coming for those who arent paying their taxes, are playing by the rules, thats the appropriate kind of enforcement and the resources that you can garner if you do that enforcement well be redeployed again to help serve those taxpayers out there that arent paying by the rules. Thats the tradeoff we see and we have an obligation to make sure that the irs is funded in a way that it can do his job and do its job on behalf of the. Mister chairman, thankyou for this hearing. I think it emphasizes once again why we as a committee, why Congress Needs to work hard to get the resources to this agency but also why we need leadership from the top and im not talking about commissioner rettig right now, im talking about the president of the United States who understands the valuable service the irs can provide and with that ideal back. Thank the gentleman mister kaufman is now recognized for his five minutes. Mister grossman, icu. There we are. We can hear you. First of all id like to thank Mister Rettig for being here. I think his agency is professional and i think any implication that they are intentionally avoiding segments of the population is misplaced and insulting. That being said is not a Perfect Agency so we have some questions for you. In wisconsin we had a lot of people who couldnt get their taxrefunds. And at least we were informed out of the problem was they had shut down the Fresno Office. Unrelated as far as i can see the quality of ip. Just its a decision to apparently have a lot of tax return sitting there on on a as a result people waiting months for their tax returns. Maybe some still dont happen and i wonder if you comment on the decision to shut down the Fresno Center and what was work is being done to make sure people were getting their tax refunds. Here we have both already work for you and in any kind income and if its your belief right now all or almost all of the funds that will end up in theFresno Center are paid off. The Fresno Service center is scheduled for a closing, we close to other centers and i think to others beyond that. As part of a consolidation been going on for the Internal Revenue Service Service for your paper filings were reduced filings increased in our current specific Electronic Filing is almost 92 percent so used to the 92 percent lets say in paper filings so we had campuses around the country. Some dedicated individual return, some dedicated to business returns so the concept that fresnowould be in the process of closing and about your project from now , were working you should know very hard for the placement of our employees within the Internal Revenue service and also working with the private sector doing career day to place articles on the outside. We are one family but in terms of the, can you hear me . I dont even get the gist of the question. The problem is we are told that returns were sent to the Fresno Office and whether it was your decision or the governor of california, i dont know what after returns were sent tothe Fresno Office , they were never open and sat there. Not a matter of a longterm decision toshut down the Fresno Office. I was told that the Fresno Office was as a practical matter not working at all through the coronavirus and therefore people present tax return there were not getting their refunds. They just remain there ona. Is that accurate . And if so, is office now up and running for what has become of the refunds for people newspaper returns were sent to fresno . It was my decision to close almost 90 percent of our 511 facilities on health and safety concerns for our fleet. We get it procedurally with respect to local guidance although we were exempt from guidance during march, april, may. Our physical facilities were shut down so mail didnt create a backlog during that time that we had been working on that backlog and i indicated earlier that i believe we are within a couple of million paper returns inside of a backlog which isalso why we distrust for people who have yet to file a return , to file that return electronically because we are in process. We did as we open. Campuses, we did shifts physical mail from one campus to another when it was more of an ability to open based on health and safety in certain environments compared to others but we were moving is only around the country to where we had the Customer Service representatives and others to process the mail similarly we get the same thing electronically but electronically we could do it within 30 minutes, shift entirely from one has to another area physical mail required. Help me cut you off. Pay off of the returned save file by april 13, that went to fresno because if youre in wisconsin i think youre supposed to mailto fresno. Have they been processed as far as you know that and mark. I will get back to you with specifics but my understanding is where already into july so if somebody files or return in march or april. One more question before i want out of time. A lot has been said about people not being able to get the 1200 check. As i understand they were not supposed to go to people who were here illegally. Are you making sure those refunds are not going to people who are here illegally. We have a series offilters and checks and markers that go into our system based on the information that we have. We dont have complete information to every person but based on the information we have , our systems are in line with the information we have is to should or shouldnt getpayment. The gentleman time has expired. Congresswoman from the United States islands is recognized for her five minutes. Thank you very much mister chair and thank you to the witnesses for being here. Mister rettig, before i go into my line of questioning i dont want to leave that hanging out there as if theres a perception on the part of the irs that you have been checks to illegal aliens as they are being called. Theres no reason to believe that irs are giving checks to individual have not filed income taxes and are therefore permanent residence andshould be here lawfully, is that correct . To my knowledge we follow the law as the law is written. Thank you. Thank you for that. Lets not begin thinking these stimulus checks are being given out willynilly and are not serving the purpose for which congress intended them. That being to assist americans and those who are qualified to receive that from receiving them. I wanted to ask you some questions with regard to how this funding is being, the pandemic is panning out and your tremendous support to the people of the territories and to the Virgin Islands. So in september i wrote a letter to Mister Reddick, commissioner and two seconds religion questing temporary labor of requirements and bona fide residents of the Virgin Islands he hospitalized in order to maintain physical presence in the territory for tax purposes on days that are sent on the mainland through medical reasons. As you know, pursuant to our tax structure and for some individuals who utilize our Economic Development program and receive tax benefits for being in the Virgin Islands, they have a certain number of days they have to reside in the territory. However, due to the covid pandemic many of those are still on the mainland or have medical purposes. Do you have a response or do you have any status requests, status give me on the update of request to you . The treasury is responding and that response will be coming, i hate to use the term soon my understanding is soon let me say that we have followed up and we will follow up and as soon is not in the space of less than 10 days will hear from me or somebody on my behalf giving you a better timeline but its treasury is handling the response to area. Thank you. In washington you hate here the word soon. Thats the kind of work that i give my kid when i saymaybe you can go somewhere. I share your apprehension to ensure. I wanted to find out, we had a terrible situation. Irs, you and the treasury were so good to support us in terms of when our governors gave you the number of individuals were going to be receiving stimulus checks. Rather than seeking reimbursement for the money, under the code you gave money up front that has been helpful to us based on those numbers. However, you may be aware that there was a back room that occurred in that primarily those individuals who receive Social Security checks. Were given two checks, one from puerto rico in the form ofdirect deposit and the Virgin Islands. Many of these are elderly people. Some of them rely solely on Social Security and they are really concerned because theyve been told to write a check to the government of the Virgin Islands for the money that may have come from puerto rico and the government of the Virgin Islands will then money puerto rico for the double payment. The people are concerned that puerto rico will still in turn come after them, that money has been set. Are you aware of this issue and is there any clarification on what the correct figure is for those individuals who receive those checks to take care of that . Specific after the Virgin Islands that came to my attention this week and i also am in understanding of a situation where potentially there is a concern a person might issue a check but also have the same amount removed from their account in which case essentially received zero. Our intention is every eligible american receive their payment and receive their payment in the correct amount. So i will actually personally look into that deeper and as far as the advice, we do have advice for people who receive duplicate checks and some of those issues are because we received information from multiple sources. We were trying to do it as rapidly as possible. We did the best of our ability there were situations where things happen because of certain programs Work Together maybe and thingslike that but as far as that , there is a payment provision on our site where people can send checks. As far as sending them to the puerto rico, Virgin Islands folks in puerto rico i need to look into because im not sure personally of that connection. We do have people there but ourintention , desire and support is as strong for the people in the territories around the world as it is for people in Downtown Washington dc or new york or wherever. We understand the need and purpose of these payments and we are trying our best. You will hear back from me and if not, i encourage you to again reach out to me read something you sent forward yesterday to get you on my desk so i hope i have the rightchannel. Gentle lady time has expired will take you at your word that you will get back to the gentle lady in terms of that inquiry area i checked the gentle lady gentleman from alabama Mister Palmer is recognized for five minutes. Mister rettig, we had a hearing before the oversight committee, i dont know. Two years ago and i asked then commissioner costin about a problem that chairman connolly brought up and that is the tax gap. And i asked him why it is that were failing to collect about 450 billiona year. And his response was the complexity of the taxcode. I know our whole focus has been on the it issue certainly is the major issue but isnt that part of the problem . Complexity is always a problem. The tax gap is multifaceted and runs from guidance to a strong visibleenforcement presence. It runs to information reporting, information reporting with withholding. The ability for the irs to require Electronic Filing and return are obviously quicker for us to process paper returns a lot of issues with respect to your partnerships. We have grant over the course of the last year, our office of fraud enforcement which is extremely visible , the office of motor investigations the respective individualswho participate in certain abusive transactions. So trying to maintain a visible presence on that side , criminal investigation forces have been extremely visible. I need to move on. I would like for you to respond to that in writing if you dont mind because i do think that an issue. Theres another issue that i would like to discuss and its something that i think the chairman has been supportive of our work on dealing with improper payments. And a lot of that has to do with Technology Issues and other agencies including irs. One of the suggestions that ive made and were trying to get into legislative format introduced to allow agencies as they reduce their improper payments to take part of the funds they save for use to modernize their it systems. Is that something Mister Rettig that you think wouldbe helpful to the irs . The irs is all in on issues that need to funding for the Internal Revenue service assuming there approved by congress and appropriated. My next question would be with the realization that you got these major it issues, but the irs as the modern modernization plan has nearly defined objectives, and an achievable schedule because there are issues that have been raised about the achievability of the schedule. And a budget for replacing it systems. Because ive heard some of these electricity systems operate on the old cobol systems, is that true and do you have a clearly defined objectives for modernizing your it systems often mark. We do, we dont have hardware that goes back to the 60s but we do have language that goes back to the 60s and we have a modernization plan that was launched april 2019 area we also have modernization coming forth under the Taxpayer First. Both of those are running together but independent so that theres not overlap between those and we will be please to have our folks, and do everything for you for your staff or however its appropriate to show you exactly where weare and where were headed. I want to get back to the funding for this. I would propose that congress amend the payment integrity information at to allow agencies to direct a portion of recovery proper payments into a fund for modernizing their it systems. This does not deny the problem, its throughout the federal government and it includes those states as well so i would like to mister chairman, worked with the committee if we can on an Initiative Like that and the last few seconds that i have left, im going to go off topic here but i want to congratulate the department of justice, fbi and our Intelligence Services in the arrest of alexandercompany and el sheikh. These are the alleged kidnappers of james kelly, stephen sought off and caleb mueller. They are alleged to have kidnapped, tortured and murdered these people and while we have been in this hearing it was announced that theyve been arrested. And i hope this brings some peace and closure for those families who been involved in that and with that mister chairman i yelled back. I welcome his comments on the need to systematically develop plan for modernizing the irs and leading into the 21st century and i pledged to work with my good friends on developing this plan in the subcommittee. I know you mean that and i think the chairman. I think my friend. The gentleman from maryland mister raskin is recognized for his five minutes. Mister rettig, greetings. Last week i sent you a letter from more than 100 different members asking you to ensure that victims of Domestic Violence rather than their abusers get their stimulus checks. As you know, Domestic Violence has soared during the pandemic but the irs often didnt help them get their money through a divorce settlement is callous and irresponsible. Would you establish a process for Domestic Abuse survivors to notify the irs that its been stolen away by their abuser and will you issue payments to those who have their paymentsstolen . As tax administrators we do not have the discretion to issue payments other than as provided during the cares at. The cares act requires the irs to use tax return information to the extent we had and the situation involving Domestic Violence, if a joint return was filed that required 2500 plus 500 per dependent. To the joint filers and if theres banking information is required to bedeposited into that amount. The cares act does not provide the Internal Revenue service with discretion to add an additional day in this context 1200 to the victim of Domestic Violence. We as people are very sympathetic. In the irs seek counsel concluded in 2009 that the stimulus payment is stolen or not received the irs can issue a replacement payment . Why would not apply in this circumstance. Unrelated and if you want to get into specifics we can do it but some people are reliant on the wrong issue there. When we make a payment into a joint account, the way that the statute requires us to make that payment, it goes into that jointaccounts. What happens to it once the payment there. We can work with you specifically. I wrote to secretary mnuchin expressing concern about the president s plan to require employees to accept a payroll tax deferral. This is a political point and it seems that federal employees are earning more money in their early. Only to reach the end of the deferral period next year when suddenly will have a significant back tax payments. During the recent Senate Hearing i was encouraged to hear secretary mnuchin agree with holland it would be reasonable to give federal employees a choice in this matter Mister Rettig you agree with secretary mnuchin and will the government allow. Of this tax deferral. If not, why not. The Revenue Service is a bureau of the department of treasury secretary, i report to secretary mnuchin so the way that he indicates for us to go on policy and other issues is the way the Internal Revenueservice will go. All right. My constituents have been trying to avoid opposition to this plan, groups are up in arms about it and we should not be using federal workers as ponds. Ms. Collins, was determined to you in april you told me your office did not help the public with certain eip payment issues. You updated guidance in august and help with some but identified four categories with which the office couldnt help. This includes the eip determined based on the wrong capacity here. Your response has been those taxpayers will have to wait until sometime in 2021 to receive the money their own. Is for funds that were intended to provide relief in an emergency. After collins, Weiser Office advocating for people in that position. Advocating for those people that challenge we have is at the time the payments were issued, the irs relied on the cares that says they have an option to rely on the 2018 return if the 19 return was filed so the challenge these taxpayers have is the amount when it was issued was correct on 18 of the 19 return for example, someone had a child so now they have a qualifyingchild. Theyre entitled to another 500. That would have to be manually process by someone within the irs. Thats our challenge is the irs does not have enough staff to potentially do 3 million individual entries for those individuals so we are continuing to advocate for those people i do understand the problems the irs has in working these cases. Not something that can automate. They would have to go through potentially hundred 60 million return to see what change to the two years. Mister rettig, let me ask you when will the irs set up procedures to allow them to assist all taxpayers have not yet received their eip funds . The dental time has expired Mister Wright may respond. We currently have 11,300 Customer Service representatives available on phones. Obviously we get more calls than that we dont have the ability and staffing to answer all the call we are doing our best on, and i cannot for the fact that the Taxpayer Advocate has advocated for the issues presented. The Internal Revenue service, an area needing to prioritize what few issues when looked at individually, clearly come across as an extreme high priority then when you look at it you look at the volume of individuals in this country, and provisions in the care that we have to prioritize those as on our resource availability and we are doing our best we certainly cares act itself provided for us true up amount based on 20 20 filing and thats where the language comes through the filing the return in 2020 and on the comment about expending the portal date to november 21 from october 15, i would hope for to take to heart the fact of our announcement on that called into that any further extension of that would jeopardize our ability to handle a 2020 Filing Season. We are really trying to be cognizant of many issues so i thank you for the additional times are. Gentleman from florida mister steube is recognized for five minutes. My questions are for Mister Rettig. Thank you for your service to our country and for being here and also for your sons service to our nation in the armed services. Its been reported that the gao has provided information the irs took the 1. 4 billion in payments to deceased or incarcerated individuals. Ive got a lot of people in my district who received checks as family members were deceased and a lot of people want to know how this could happen so that would be my first question is how that amount of money to go to people who are deceased. If you look at the stimulus payment that went out in 2008 youll see the process for payments to deceased individuals and then treasury look at the specific issues about the third week in may and determine the deceased individuals were not eligible to receive payments so from the third week of may forward those payments did not occur. But those were called made outside of the Internal Revenue service. And the vast majority of those funds have been back to work payments not sent out. Was my followup question was how much of that and what are you guys doing those funds. I have visited, it would take me a moment to get to it but i believe something on the order of, this is off the top of my head. I think on the order of 1. 1 million of the 1. 4 billion or 800 million of the 1. 1 billion, something along those orders have been either returned or not sent. So the net figure i believeis approximately 300 million. If you can get me those exact numbers id appreciate it at your convenience. What other changes have the irs made to prevent improper payments of existing funds or future stimulus payments. Are there parameters in place to prevent it from going out . Certainly theres Lessons Learned anytime an agency undertakes a massive responsibility like we did for the care that the issuance of these payments and keep in mind there were business Provisions Incorporated within the carryback as well our hopes were there so under , we constantly monitor for Lessons Learned. In terms of our ability and if there was to be another round, i know theres been discussions but there was to be another round we are confident we are able to do so and it shouldnt go unnoticed that we issued about 81 million payments for only 47 billion. Within less than two weeks when the cares act was enacted and acquired substantial programming buyouts so were as prepared as we can be but we are better prepared than we were the last time i think we had admirably the last time. And your expertise and your position, what specific legislative reforms do you think that congress and this committee should be looking at. Since 2011, every administration has proposed the Program Integrity which is funds directly to enforcement. Theres a pending this year about 400 million for enforcement. The last integrity actually approved by congress was in 2010. I think that significant. In a lot of areas, in terms of my the itc payments given the Internal Revenue service this is congressional rectal error authority would be substantial, it would lessen the burdens on individuals given the Internal Revenue service the ability to regulate return preparer the financial. Enhancing the requirements for Electronic Filing of forms. It would be substantial accelerating Electronic Filing of w2 forms to the Internal Revenue service would be substantial rid those theres a lot of issues that would come together to assist us both from the perspective as well as an enforcementperspective. And in my mind those two go handinhand, the person whose late at night trying their best seems to understand what it is requirements are which is why we gone wholesale into assisting people who either are not comfortable with the english language or do not speak english. Weve also tried to buy the languages. Got two codes on things leave them directly to points on our website but similarly we got to go out on the enforcement side maintain a visible presence. I agree with that if you could send those specifics that you referenced, if you have more specifics and information on that to my office i would love to look at those issues. Thank you for your time today and my time is expired, thank you for being here. Gentleman from california, mister, is recognized for his five minutes. 90 mister chairman. The irs is responsible for collecting about 3. 5 trillion dollars in revenue. One of the things that i kept hearing from my constituents is why are people not getting the checks in time, why its taking so much time for the irs to deliver stimulus checks or you process payments or collections. It turns out that the irs is still reliance on the legacy system, some dating back all the way from the Kennedy Administration and in Silicon Valley they dont understand is it that we havent had Software Updates since then. So as you know, in 2019, the irs paid almost 3 billion to operate its current Information Technology and 2. 3 billion of that was on legacy it systems. Could you describe the impact that on the legacy it systems on the irs ability to deliver business to its taxpayers and fulfillments its overall mission. Id be glad to. I do want to make sure. Although the systems rely on Older Technology, the underlying hardware much of it has been updated but what the limitations are using these older technologies is one most notably, its hard to find gaps in these skills, programmers they are coming on the School Learning how to program in languages that are 50 yearsold. Secondly, it makes it harder for irs to implement more Online Services. Because the senate can use contemporary technologyeasier for it to implement those. Relating to your point about the time it takes to do things, one of the biggest things that make it easier for theirs to do things more quickly is for people to do things electronically versus on paper. We have issued work where we identified recommendations for irs to look at limiting more Online Services and those kinds of things will help things along. Why did it take so long for that, then for the stimulus payments to go out and how is thatconnected to the it systems . So the vast majority of the payments did go out i think fairly quickly. I think any of the issues that we talked about related to the things had more to do with policy and procedural issues versus the Underlying Technology actually i think the one outstanding issue is identifying the remaining people have been able to claim their payments and getting them access the online portal that we talked about area. How has the Technology Systems that limited the ability to operate during the pandemic and what are one or two main things you would recommendthe change . A lot of irs operations, certainly back a second, many of irs employees have the ability to work remotely already some of them didnt. So for example those in Customer Service positions. Those obviously opening mail. You cant do that work remotely. To the extent that we can change work processes to allow more of those irs folks to do work remotely, i think that would have longerterm benefits beyond the pandemic so that primary area for them to focus on. Mister rettig, two questions for you. Does the cio of the irs does not support you directly, is that correct . The cio does not report directly but i talked to the cio at least once a week and many times seven days a week. A provision that is in the Taxpayer First and irs is being reorganized Going Forward so i think youll see thataddress. Thats good and what do you think we need to do to modernize the irs and to help deal with these legacy it systems and what is the plan to do that. We actually have a plan independent of the Taxpayer First and i think given the interests, im very familiar from california with the valley and i had three brothers in law who are in it in the valley so im understanding that where i is lets say in the valley compared to where it might be in terms of the Internal Revenue service i have had visits up there, the Internal Revenue service, they need to come of age to serve the people of this country in the manner that the people of this country deserve to be served. I think that universally, we all support that. And we want the best for our people. We dont want to tax administrative for, administrator that is behind the times so we have to earn that trust and respect through providing that information to them i would welcome the opportunity for myself and others to meet with you or your staff to give you the details on two separate plans that are independent. There is no overlap but because one came on the scene first , we are looking at them from a somewhat jointly but we have a modernization Business Plan was april 2019. We have yet to receive a funding request on an annual basis but a secure plan for that and then the Taxpayer First act as modernization in it as well i think as are all familiar with their no funding appropriations associated with the Taxpayer First. We need both of those. Gentleman, Mister Pascal, thegentleman from new jersey isrecognized for five minutes , welcome. Mister pascal, you need to unmute yourself. We okay now. I want to thank you for this opportunity and as chair of the oversight subcommittee , i am very interested in the irss operations. A lot of communities and constituents, weve heard some very very Big Questions from both sides of the aisle today. Theres still neighbors in new york city towns without Economic Impact payments or the irs refunds that would help make ends meet. So im pleased the commissioner is here to answer questions. Unless it must be said that its utterly ignored the ways and Means Committee and 116 congress but the commissioner , how can the congress and the American People assured that the order for the president s tax returns are being conducted in a fair and stupid was way and without political interference. How can we be assured of that . As you know i cannot specific matters as to whether any taxpayer has issues with respect to an examination of the return and to what might be in the return or in the examination. Earlier there was a reference with respect to a criminal investigation of an organization reference did not come from the Internal Revenue service and the information anyway associated with that did not come from the Internal Revenue service. I cannot confirm or deny that information. Everytaxpayer in this country is assured confidentiality and privacy with respect to their tax matters. So as you knowsir , under 6103 and otherwise i cannot. I dont want to get into a debate about privacy. That was part of 6103 in the code. I understand that. Privacy is very critical to me. My record is my record but the point of the matter is it would seem that we put that aside under the investigation of our commissioner learner, i believe it was 10 taxpayers belong to certain organizations were made public without any apology because they found out they were wrong so that answer is notacceptable. The recent revelations over the president s lifetime of tax abuse and malfeasance threatens confidence in the irs. Im talking about the legitimacy of our federal tax system. Im not sure you understand or appreciate that, sir. To begin to restore this trust you must fulfill the ways and Means Committees legally binding request for the president s tax returns red his business and personal tax returns under 60 103f. You have been illegally withholding them for the last 500 and today, 470 days. 547 days. Will you lawfully fulfill chairman neils request . Sir, as you know at issue is pending litigation and its not appropriate for me to discuss pending litigation and we have made the committee is aware of that. Mister rettig you admitted in a recent report that the irs audits for low income taxpayers disproportionately offer wealthy tax cheat because its easier to pick on regular americans. This is important funding issue but this is also a leadership issue. Do you have animmediate plan to end this shameful disparity . I call it shameful. That report is absolutely false. Let me repeat it for people who didnt hear the first time. For taxpayers who have more than 10 million per year we audit at the rate of 8. 16 percent. For the e itc community we audit at the rate of 1. 129 percent. Those facts are in our data book that was issued for fiscal year 2019 so the earned income rate is 1. 1 percent. Taxpayers over 10 million. It is the. 16 percent taxpayers over 5 million and about four point something percent in taxpayer between one and 5 million. Its something on the order of three percent so those numbers are disparate. The issue with respect to earned income tax is there is a 17 billion dollar improper payment associated with that per year. But the irs does all it can do to get those out individuals as rapidly as possible. 90 percent of the pc payments are issued within 21 days. To present 42 the fraud filters id and other issues that require an annual look like a person. And we processed in a prior fashion. , who is going to the Internal Revenue service anyway and any lower income and community, geographically diverse community, Rural Community is absolutely wrong that should never,. Those comments hardworking dedicated career employees of the Internal Revenue service to create our plans and that is not what the Internal Revenue service is about and i think obviously extreme discomfort in anybody serving contrary and we would meet with any and every of you to go through that in detail. Time has expired me just say on behalf of Mister Pascal i think the question is not to disparage the irs. It was to ascertain whether reports about a discrepancy between the percentage of audits of people receiving that e itc was on par with the percentage of audits of people making more than or reporting more than 10 million of disposable income. You have. I was sent, i respect punishment pascal. There is chatter outside of our building in case what im there. Case where i went with respect to and its unacceptable to the irs. I understand that but its not unacceptable for the distinguished member of the ways and Means Committee to ask that question. Knows her and i agree. I said i respect punishment pascal considerably. I appreciate his question. We both respect Mister Pascal area thank you Mister Pascal for joining us the chair recognizes gentlewoman from california, miss order for her fiveminutes. Commissioner, yes, sir no question you were responded that the list remain impartial and unbiased to your wall as irscommissioner. Rex. And i irs commissioner you believe its important to hold criminals accountable for tax Fraud Division or other violations of the tax code mark. Is the Internal Revenue service has a very aggressive criminal. But make sure you can hear me. Reclaiming my time. Im not trying to be difficult to do believe in in holding criminals accountable, yes or no . Thats what criminal investigation at the irs does. Actually we investigate. We do not prosecute. Holding those criminals accountable through investigation stems from your sworn commitment to upholding the constitution, correct . Thats correct. I ask that because in addition to the salary he received as an irs commissioner you also earn between 100,000to 1000 per year from your ownership of two units at Trump International waikiki. You have continued to earn this additional income while in office, correct, yes or no . Correct. All of that was approved before it came on board and each year by the ethics officials and the Internal Revenue service and other agencies. Mr. Rettig, did you disclose that information to the Senate Finance committee when you were nominated for the position . Absolutely, and anybody who has served in any way, shape, or form that there was a concealment assert is absolutely wrong. During my confirmation process the Senate Committee received over 80 pages of invoices that specifically identified that property. The instructions for that property specifically say to put the city and state where all properties are located. That is exactly what transpired with respect to those properties, and other properties that i own. And anybody who asserts to the contrary really does not know what theyre talking about or the process. Okay. Commissioner rettig, theres no need to get upset man, ive been dealing with that since i came on board and a do not take lightly anybody trying to disparage my reputation or my families reputation. Reclaiming my time. I do not take lightly people attacking the members of this committee i did not intend to attack you. Seems like that i apologize to you and others. The gentlelady controls the time. Mr. Chairman . Ms. Porter. The time belongs to me. Mr. Rettig, since you are getting upset about that line of questioning i would like to try another one. How many Economic Impact payment how many people are still waiting on their Economic Impact payments . First let me apologize to you if you took that as an attack. I have to indicate that each has been out there and it became across as hostile or aggressive toward you i do apologize. That is not to i yam and i certainly would not imply that to you or other means of the committee. I would hope you would accept my apology with respect to that. With respect to individuals and payments were struggling to issue, its very difficult for us to identify people who do not interact with the government with the Internal Revenue service come with homeless shelters and whatnot. We dont have a figure for you. Ive been asked earlier today to provide a figure. I can tell you we are currently reclaiming my time. Its about 9 billion. Ceja said some of these people have reached out to the government i just want to share our experience in our office where weve had 114 people reach outcome 114 constituents in my district alone. We have worked tirelessly our case working to get answers for those people who are months and months and months and months. At this point we have answers for 13 of them. That is as you know 11 . So these are the people we have no information, 50 cases of these 114, we have not been been able to get any response at all from the irs. I would respectfully ask you to please communicate with your team about responding in a timely way to congressional inquiries. Because for every american who is reaching out to our office and asking for help, were not able to get some help because the irs does respond to us. In almost half the cases. Review merrick and it does out to us there are literally hundreds of thousands of more who are just waiting and dont have that information. I really appreciate your going back to your team and getting the committee a clear answer of the estimated number of people if not received Economic Impact payment were waiting and how many outstanding and unresponsive to congressional inquiries you have both sides of the aisle. Thank you very much. With that i yield back. Thank you, let me just say to ms. Porter. Before she joined the hearing i made the same point, that there are a number of constituents in all of our respective officers who have not heard, who had confused instructions, have not received payments. And we represent those constituents. And the numbers yet shown you e probably reflective of so many of us. Its a bipartisan issue. The Ranking Member reed the same point about his constituency in georgia. The what the chair asked mr. Rettig to do was to go back and look at the liaison functions with members of congress. When somebody contacts our office it means Everything Else has failed. Weve got to have more responses, reaction from the irs. Ms. Porter, i believe committed to doing just that and we will follow up on that. But ms. Porter raises the very issue and it is i think universally shared by members of congress. Thank you ms. Porter for bringing that up and using that handydandy whiteboard you are so adept at. Thank you. And once again, congresswoman, i do apologize if a lucy does hostile but its obviously a personal issue. So thank you. Thank you. The chair now recognizes himself for five minutes. Chairman, can i interrupt for one second. Was of course. Ms. Collins. Youve talked about liaison and im bondsman. That is what we do. Editor function is that Congress Great the national Taxpayer Advocates for the purpose ombudsman. Our local offices have contact with Staff Members and happy to help at all these cases the we can help. We appreciate that. When a a member of congress cad a federal agency that falls under our preview, i expect an answer. A third party directly. When i write a letter i expect that answer, the letter to be answered. I think for the record i presented a letter i sent three weeks ago that is not yet been responded to. And again theres a a certain urgency here. Hes not just idle thoughts coming from erisa congress. Were trying in real time to up constituents for whom for whatever reason the system has not worked. You are quite right to remind us you are a resource and an asset we can should not overlook. I think we are talking directly about communication with the agency and trying to get a better line of communication that works for everybody. Mr. Rettig, did you speedy we accept the Taxpayer Advocate his house within the Internal Revenue service and we have a shared responsibility that when things come through legislative affairs, certain items are automatically routed, certain items i was not. We accept and appreciate we could do a better job. We will not use excuses for staffing and funny and whatnot. I will only vouch for the dedication and desire of i think one of the most hardworking dedicated workforce in the entire federal government. We will stipulate that. But he can remember speedy i will take that back. We operate in real time, too. If youre not happy we are not doing our job. Are right. Now my line of questioning. Mr. Dsouza, im going to give mr. Rettig a bit of a break. What do we know about the scope of the i. T. Challenge at irs . I mean, we talk and about legacy systems. Do we know how many legacy systems there are . I think we actually had a funny that irs didnt have a complete inventory but i think generally we do. I think as can you give a number two that, generally . I would have to get back to you. Are we talking hundreds of systems, dozens of systems, what . I think in the order of hundreds. Part of the thing to keep in mind is that depends on how the agency defines a system so thats why i have i get back to you with a a more exact num. I would appreciate that. It said committee is going to formally request gao for comprehensive inventory of the scope of the problem, challenge. And by the way whats wrong with the legacy system . Well, as we discussed, it relies on Older Technology and would be harder to find people to avoid to keep it uptodate. You have a limited range of venues that support that technology. Over time but im more interested, thats all interesting, but am interested in how it affects capability. A system that is four years old does not have the same capability of handling the mass volume mr. Rettig has to handle than the content for a system correct . So i would say that actually the irs system to handle a very large volume. That wasnt my question. My question was, when you compare a legacy systems capability to a system we would deploy today, the former is inadequate compared to the latter . It is but its not in terms of volume. Its probably in terms of capabilities that provides. We talked about the ability to provide services online, provide information were quickly to taxpayers. Is it more costly to maintain . Yes, yes. Any idea of what percentage of the i. T. Budget mr. Rettig overseas is devoted something maintaining legacy system . So 80 of the budget goes for Ongoing Operations. Exact percentage of that, thats for legacy systems, again i did to get back to you on that. So what is your estimate of what it would cost to update completely the i. T. Systems, both hardware and software, and these, retired his legacy systems at the irs . I dont have an exact number but what i can say is that the monetization plan we talked about are good for steps but they dont fully address what it would take to retire these legacy systems. One of the things we ask the acting cio is whether or not they had a full plan to retire imf which is when the biggest legacy systems and he said they were working on that. Over time they have taken various attempts at it and they havent been successful. We will have to see wait. Thats not an adequate answer. I have been successful. Why have they not been successful . To what extent this hearing is about resources for the irs to make sure it is as responsive as it can be to the American People, and we documented how they were starved of resources and, in fact, vilified by this very committee i might add for ten years, at the cost of reinvestment. So how has this affected capability . Sure. So as the budget for these modernization activities has been cut or as we that situations like a lapse in appropriation or for continuing resolutions, i was has continued had to replay in and we prioritize its efforts. That takes time and it slows things down. They have to move staff around if they dont have enough staff, then they have to triage and focus on highpriority activities they are not able to do certain things. One of the things we reported on indirectly answers your question though is with this most recent tax cut in jobs act irs had to shift resources to implement those changes versus ongoing activities planned to do to enhance the systems. Those are all some examples of tradeoffs irs estimate when it doesnt have resources. You say tradeoffs. Somebody might use different image, cannibalization. By the way, its not just legacy systems, is it . I remember a few years ago when this committee was vilified your predecessor mr. Costa and in whom i consider an exemplary Public Servant mr. Costa and in but nevertheless, members of this committee vilified and because of crashes with hard drives throughout the agency. One of the things that discussed the course because it would have been inconvenient was the age of the hardware we talked about. Pcs. In the private sector was in private sector for 20 years we can replace our pcs about every three years. What is the replacement rate, what is it age of replacement rate of pcs for irs employees . So i dont have a current rate. What i can see is what we do look at this issue a few years ago we found the majority of irs i. T. Equipment was outdated. Since that time we do know mr. Dsouza, outdated. How many years . How old . Again, i would have to get back to you with the specifics on that. Mr. Rettig, you know . To the extent we get funding we are making real into updating our systems. Most of our systems are far beyond the useful life and we have for most of the systems we have extended the useful life on things you have like laptops and such. We extend the useful life with warranties and whatnot and then we end up having to go beyond that because we dont have the ability to replace. One comment just quickly in terms of efficiency. As we were to our systems come something that is always stayed in my head and its pretty simple, as we modernize and bring in jackpots are people who call in, one employee can handle one telephone call for one employee can handle four chat bots at the same time. Thats a four to an leverage. We have 11,500 Customer Service representatives. Three if it was direct map you would put us up to 40,000 by getting us there. Our ability to leverage resources three modernize system which includes both language and software and hardware would be greatly received by every employee in the Internal Revenue service as well as i think that every american. I mean, let me just say, mr. Dsouza, we need more from gaos and what weve got here. We need a comprehensive inventory of the nature of the i. T. Systems, legacy systems, hardware, software, zoom capabilities, whatever. So that we understand the scope of the problem and we need dollar figures assigned to that so we understand the investment at a going to be required. The other thing we need is an assessment from you and with cooperation with the irs, whats the intern on investment . I mean, we talk about g yoakam the agency for which you were, that roughly every dollar we invest in geo we get at least an eight or 11 return. Whats the comparable figure for irs works if irs can do double the audits it does currently, presumably the return on that is quite considerable. Especially when monopolies 450 billion is left on the table, taxes owed but not paid because of capability. Capability of auditing, tracing, collecting, enforcing. And so those are important considerations, in addition to we are in a pandemic and while i think mr. Rettig and ms. Collins have vindicated they have done a very credible job, trying to respond under the most adverse circumstances with the history of this investment for ten years. Nonetheless, we know things on the table. With all of that we know that millions of Americans Still havent gotten their direct payment. Millions of americans are still complaining about a responsiveness from irs in terms of refunds or filing or processing a claim or making an appeal or dealing with an audit. And so the relationship between the investment in i. T. And the capability of the irs to do its job, and by the way part of its job because of voluntary compliance which is so high in america compared to other places, is based on the fact that i perceive the system to be fair. Its going to treat me the same way it treats anybody else. Rich or poor. They will hold that person and me accountable. If that trust is damaged, compliance will fall. That will hurt the ability of the United States government to fund itself and the services it provides people especially during this street of time which is so challenging. Period of time. We need the gao to really look more closely and provide us with more comprehensive data in terms of the scope of the problem and what it will take to address that problem. We do have work underway thats looking at some of these issues, and we were glad to update your staff. We want you to expand that so that its not some of these issues. Its everything which is described. Thats why were having the street and we need gao as a resource to help us understand analytics and the boundaries of those analytics. Yes, mr. Rettig. We will cooperate with gao in that regard. I want at one thing about the complaint site of house. We look at service and compliance together. We look at the desire of the irs to in the trust and respect of every american. I made the comments about getting into different languages come lowincome communities, expanding my resources, expanding resources to lowincome taxpayer clinics. When you consider fiscal 19 our gross receipts were 96 of gross receipts of of the United States of america, and part of the tax gap voluntary compliance rate hovered thread 83 , thats for americans who time to file and pay essentially maintain compliance. If we can help the folks who are trying to get on their own by in language come simple language, understandable things, open up those avenues, answer the phones would replace those goals, and weve only to bump the voluntary compliance rate 1 , thats 35 35 billion a year from americans want to get it right, who are proud to be americans, who are proud to file tax returns. Theres a lot of people there. This is the first time to my knowledge in history of the Internal Revenue service that weve done such an expansion into languages. Im very proud to be the son of an immigrant and the husband of an immigrant, very respectful for the challenges people have who come here and its incumbent upon us collectively to make sure they have the ability to get it right. Modernization also some difficult in that regard. It also helps our enforcement component. We welcome the assistance of congress. Well, thank you. And the fact that youre the son of immigrants, im the grandson of immigrants. And you married a refugee. I think just gets living proof to the fact that immigration rewards and enriches america. It doesnt detract from it. And by the way, with respect to refugees, i will just say editorially, curbing the number of refugees, people fleeing violence is a very unamerican thing from this members point of view and we ought to be doing exactly the opposite, opening, welcoming arms to people who are suffering violence and persecution abroad. Thats what refugee means and thats what Refugee Program is designed to provide. To help you with perspective. My wife was born and raised in vietnam. After the fall of vietnam april 30, naked city five father was taken away to a reeducation camp for three years and nine months. She in 1982 lead by vote. She is a vote person come for the trunk and i dont mean in a derogatory sense. Im hugely proud of her. Sure. As you should be. Rescued at sea. And thats the story of america. Thank you. I know we are digressing but the idea we would count the number of refugees who perhaps worldwide are now added Record Number at 15,000 is disgraceful. And from my point of view unamerican. Any rate, onto irs. We need more progress. We need more help from gao in broadening the scope. Mr. Dsouza, will be glad to work with you and mr. Dinar on that. Mr. Rettig, hopefully you and ms. Collins was new in the job will be creating mechanisms to be responsible, more responsive to congressional inquiries. Because remember, we are also representing taxpayers, but taxpayers with that for whatever reason the system doesnt work. With that we have five days for additional questions that may be submitted to our witnesses, and we would ask for for a speedy d expeditious response in writing should you get those questions through the chair. And with that, this unit ceilis concluded. Thank you. Thank you. This hearing is concluded. [inaudible conversations] thank you, everybody. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] of day one ofle the confirmation hearing for amy, bennett, several talked about the nominee and the process. I am going to be laying out views onin which her reaching back and reconsidering and overturning the law are not just extreme, they are disqualifying. Willas taught at a regarded law school but has
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