He discussed efforts to the payments owed to individuals and Small Businesses provided by the cares act and addressed the 2020 tax filing deadline which had been extended to july 15. This is about two hours. Thank you for agreeing to testify in the 2020 season and the irs handling of challenges that used because of the pandemic, the 2020 Filing Season got off to a difficult start at the end of january. However, since then this Filing Season has been anything but typical as the result of the National Health emergency stemming from the ongoing pandemic. Almost all regular tax filing and tax payment deadlines have been extended. This includes the individual corporate and the deadlines pushed back from the normal april 15 to july 15 and there are some rumors that they might be extended again. I dont know. I have heard that at least once. Despite the exton to deadlines, the Filing Season continues with many still filing their taxes as usual ticket to the tax refund. At the same time, consistent with Government Shutdown orders and the cdc guidance, the irs limits much of its work to the essential services, closed a number of facilities and instituted the policy is where practical. The last shortstaffed during the busiest time of the here. Understandably, that meant it. Longer wait times ticket their tax questions answered. When the unanswered. The the irs and treasury have worked nonstop to put out the guidance to navigate important provisions to make ends meet and provide the business is with needed liquidity but even more daunting is the end of the mentation of the rebates for the individuals often referred to as Economic Impact came in. Irs and treasury to get the payments out the door and hand the individuals and families to stay home due to the pandemic. The irs established an online tool to register for the payments. Over 6 million individuals families took advantage of the two oh. Commissioner you want to be thanked and i thank you and your staff for working around the clock to get this much needed assistance in the hands of taxpayers during difficult times no fault of their own because for the first time in 244 years the government took the step two shut down the economy. When you consider all this when you are processing 260 million payments there will always be monday morning quarterbacks. Were interested to get your perspective has the prospect has worked and then to task for those stimulus payments. Beyond the current filing citizen one season the irs has been working to implement the taxpayers first act enacted last year with the taxpayer protections the Taxpayer First act calls for the irs to institute comprehensive Service Strategy to modernize the structure to implement Information Technology strategy. I would like to know how they proceed with those reforms. Thank you once again and a turn to senator wyden. Thank you very much. And on behalf of the chairman and i i do have some sad news to begin this mornings hearing. The chief of staff for the joint committee on taxation has passed away. He was a truly extraordinary person. He accomplish the rare trifecta to make his mark as i respected expert in tax law and business and government and the economic world. Senator thune remembers always their professional to both sides and became a personal friend of mine i was thought of him as a man with exceptional character i just wanted to make those remarks and the chairman said i should express our sorrow on behalf of both of us for the day on for today. It is intertwined with the covid19 response the chairman mentioned. I want to start with covid19 because we are all seeing spikes now across the country with tens of thousands newly identified cases every day. Icu beds and hotspots running dangerously low the president set out in the open that he wanted less testing now he has gone weeks without speaking to Top Public Health officials. That causes americans to say the elected leaders have given up if it is an absolute certainty jobs in the economy cannot come to full strength as long as the pandemic continues with the spikes and to be in the see center key discussions i strongly feel as my colleagues here know that top priority as long as it takes to get the economy back to normal. What this means is you have to have these benefits so people can pay rent and groceries and that is unemployment goes down the senator from south dakota calls it tapering off. That we cannot leave people on t not being able to pay their rent. And then to be in a position where we will have a sunol me of evictions and people who would just be desperate. More and more that temporary furloughs are permanent layoffs. With the supercharge benefits tied to conditions on the ground. s on the subject of irs oversight. Leading to those getting off scott free. The irs failed to audit 900,000 wealthy taxpayers for filing tax returns. These wealthy taxpayers owed nearly 46 billion in taxes. Think of what we could do for hardhit communities of you are talking about having that many if it was owed to the American People. 370,000 taxpayers have failed to respond from one delinquency notice to the irs they owed nearly 21 billion and lets be clear this isnt about shadowing networks of hard to trace Shell Companies wouldnt take complicated Forensic Accounting to crack down on the tax cheats talking about people who simply would not file the return. To issue stick out first donald trump said why enforcement the administration has not taken any action to crack down on those cheats who stole tens of billions of dollars of american taxpayers after getting the irs audits of wealthy taxpayers are way down maybe doesnt come as a surprise if he is doing anything about it and in my view its past time for congress to reconsider how the federal government with tax cheating the irs has lost one third of the enforcement personnel and half of the revenue officers it shows how easy it is for them to get away with cheating and if they dont bother to file their tax return the tax audits have been shifted onto those hardworking americans so years of public budget cuts have made this a good time to be a tax cheat if you dont believe in law and order to allow wealthy tax cheats to get away with breaking the law. Thank you for joining us this morning to our question and answers. Before i gave the introduction there was something i was wondering about wondering if we could increase extend the time beyond july 15 for filing. Just been informed that last night secretary the nguyen announced they would not be extending that filing and he has the authority under law to do that. Now to introduce our witness the commissioner of the irs. Prior to his present position he was a highly respected law firm. And partner in california for more than 36 years. There he represented thousands of individuals and businesses and corporate taxpayers before the irs with the department of Justice Tax Division federal and state courts state taxing authorities and served as a member and chair of the irs Advisory Council 2008 through 2011 chaired the taxation section of the bar of california and on the Advisory Board the Franchise Tax board and the board of equalization to receive professional honors i will not go through the list featured speaker at many tax conferences domestically and internationally and authored numerous tax related articles the ba in economics from ucla as well as with honors from Pepperdine University we are pleased to have you here and we will have your Opening Statement and then question. Chairman grassley and Ranking Member and members of the committee thank you for the opportunity to discuss the Filing Season in the irs efforts to help taxpayers during the covid19 pandemic. Would like to extend my personal sympathy on behalf of the irs to the family and friends i was familiar with ed through los angeles and our better person did not exist with guidance we are equally saddened to learn of his passing. Im extremely proud to work with the irs in my second year as commissioner. Knowing 96 percent of gross receipts of country flow through has strengthened a healthy and functional irs is critical to the success and wellbeing of our country and our people. The irs Rapid Response to the pandemic serves to illustrate how critical it is to put agency to have consistent and timely inadequate multiyear funding so we can succeed to provide the services our country deserves irs employees working around the clock to implement major provisions of the cares act especially the Economic Impact payments to help millions of americans during this challenging time so far approximately 160 million payments have been distributed approximately 270 billion however there is more to do the irs remains focused to make sure every eligible american receives a payment we are focused to get out that historically underserved communities such as individuals experiencing homelessness. We realize how difficult the pandemic has been. For that reason the irs is providing important administrative relief postponing dead payment deadline through july 15 will not be extended beyond that but yesterday we issued a notice that had a variety of payment related options we temporarily adjusted the process to help people and businesses during these Uncertain Times under the irs people first initiative. With respect to Filing Season we have to adjust and re deploy resources during the pandemic employees have remained dedicated to the 2020 Filing Season as we continue to process Electronic Payments and issue direct deposit refunds and accept Electronic Payments during the pandemic we have processed more than 126 million individual returns and issued more than 93 million refunds totaling 257 billion. Were in the process to reopen some operations when and where it is safe to do so. In this regard we are processing paper returns tackling the backlog of mail and prioritizing Customer Service operations as well as health and safety of employees and everyone we interact with. We will follow and exceed majors to deliver on the promise of the new irs we are extremely grateful to congress for the strong bipartisan support to put forth comprehensive strategies for a newly envisioned Taxpayer Service operating to the eyes of the taxpayer. With respect to enforcement the irs is committed to having a strong visible presence we have shifted significant Examination Resources and technology to increase focus especially those who failed to file returns engaging in certain types of questionable transactions. Do by providing Adequate Funding we can deliver on its mission to build a stronger irs for taxpayers as required by the Taxpayer First act the 2021 budget request appropriation of 12 billion as well as a Program Integrity cap we also asking for Congress Help legislatively to allow the irs greater flexibility to address correctable errors to address oversight of paid preparers this concludes my statement im happy to take questions. Thank you. It looks to me what i got from the clerk most people will be remote and if they have the time or or not if you do then you know when you need to stop but if you dont finish your question and then we will quickly move on because i cannot see you facetoface thats the best way i can do it to keep things on time. Commissioner, last week the office put out a report discussing the federal governments response to the covid19 crisis that had a review of the irs to get stimulus payments out to americans. One issue raised was due to a glitch with a non filer to all sums stimulus recipients did not receive the additional 500 for the children claimed on the form 450,000 recipients did not receive the correct amount. Understand the irs now intends to send these filers any additional amount. So when can these tax filers expect to see thes additional amounts . Before you answer that let me refer to a second part of the same subject senator collins sent a letter of similar concerns of those on Social Security missing out on additional per child amount for the deadline to use the non filer tool. If you go back for other non filer accounts does the irs intend to similarly send additional amounts to many seniors who filled out the non filer tool after the aprild deadline . With respect to the first group the 500dollar payments were missed i think it was 365,000 but in any event we will reissue those 500dollar payments this summer. Similarly we have an issue with respect to individuals who filed injured spouse claims we are taking a look at those and we anticipate to reissue those in the summer. We can verify that separately. With respect to the Social Security information folks taking a look at that we had some limitations on ability and capacity to move things through we are sympathetic to get as much funds out to as many people as possible as quickly as possible. We are taking a look at it. For much of the Filing Season irs has operated on short staff due to this emergency as a result of a backlog. We have the irs resolution system waiting to be addressed many of returns filed by low income taxpayers by the eitc what steps is the irs taking to clear the backlog and how are they flagged for error resolutions . The eitc returns have the extreme priority you are aware we brought employees back on a voluntary basis to bring in the back week by week with a full staffing under the new procedures by july 15 and we expect to move to the eitc claim as quickly as we can but they have priority we have allocated priority to refunds with Customer Service calls and representatives and Taxpayer Service side is what we are trying to address. There is a backlog for the same reason they couldnt come to the office. Even heard reports you had to bring in tractortrailers and rent extra Storage Space to store the mail. How long do you expect to take for the irs to address the backlog . Are there procedures in place to prioritize certain types of correspondence such as talks on tax returns and audit request . They are prioritized with the inventory that is 12. 3 million pieces that includes paper returns and other correspondence. Focusing on the paper returns many will have the eitc refund and otherwise. The reason for not screening out payments from the deceased from the start as well as we cover those that went out . It followed with respect to the payments that went out 2008 for the stimulus payments. After three weeks of issuing payments treasury issued guidance indicated they should not be receiving those payments so irs change the process because there was no clarity in the cares act they should not be receiving payments they administer the cares act as written and then treasury came to the conclusion with counsel they should not be receiving the payments so we adjusted after the third day and then and put that into the file. Commissioner lets go to this infuriating new report from the Inspector General that found millionaires are getting away without paying the taxes they owe. Between 2014 and 2016 nearly 5000 taxpayers who owed at least 500,000 of unpaid taxes did not file a return and were not audited by the irs. Owing a cumulative 15. 7 billion and they got away with it. The report found overall hundreds of thousands of taxpayers with significant incomes were skipping out to file tax returns to pay accumulative 45. 7 billion in taxes over three years with the irs doing nothing about it. This is infuriating. I hope you are as angry about this to. My question is we confirmed you in this room almost two years ago. I have got to assume you learned about this outrage and outbreak of lawlessness i describe why didnt you then call chairman hatch and i up to say this is what happened. It is outrageous i want to stop it now here is what i need from the finance committee. We never got such a call. That is before i was confirmed as you are aware. I understand that. But when you learned about it why didnt you call the chairman and i and say lets stop this . We are stopping it. No. You are doing various things with budgets and the like and im interested to hear it but a specific question. When you learned about this , it seems to me it is priority business. Billions and billions of dollars and you wont find time to go after folks of the earned income tax credit . Why didnt you call up chairman hatch and i to say we have to do something about it now . In my view this should have been a call made almost two years ago. Why didnt you do that . And i tell you what we are doing. I will call you. Commissioner, first i want to know, why when you saw this going on shortly after you were confirmed why you didnt stay to this committee and a bipartisan basis i have to stop this. Answer that person tell me what you are doing now. Shortly after i was confirmed this is not brought to my attention. We will stop right there. Are you saying you and your staff did not know that 900,000 individuals skipped out on filing the return and paying the 46 billion they owed . That report is 14, 15, 16. So wet i got on board. Absolutely want to know what you did when you learned about that. When i learned about that , we changed certain folks with certain positions within the irs we move somebody from the criminal vision to a commissioners Small Business of employee now the commissioners Small Business and created a fraud Enforcement Group headed by a career irs criminal investigation person, we created a promoter coordinator position recently added a significant counsel attorney to the Enforcement Group. We have touched all nonfilers we are aware of with respect to 20172018 and 2019 for fiscal year 2019 more than 364,000 automated substitute returns were closed resulting six. 6 billion in additional assessments. We have a nonfilers strategic plan. My time is up and im giving you an opportunity to respond. How much of that 46 billion has been recovered . And how those figures but i can meet with you. When can we have those . Within a week . The reason i want the answer to the best of your ability because we always hear about things that are being done in the future. We here with changes to respect to policy but this is a brandnew report, the latest report from the Inspector General and it says they are making off with enormous sums of money that we need for priorities here at home and im still trying to figure out when you actually learned about this and what you did to collect that money. Im over my time i would like a written response than a week thank you. State withholding. To confront the same tax withholdings issued a. Addressing the fact to provide certainty and clarity for a lot of the employees crossing state lines in many cases to provide assistance im hoping that legislation can arrive at a. To provide additional benefits they could accidentally what you continue to work with me to add a certainty to the worker classification rules so they can provide support to help them stay safe during the pandemic . During the extended to april to july you proceeded to approved that request as the chairman noted the deadline of july 15 wouldnt be opposed postponed is it your impression they have enough to pay their tax bills and could you talk about that . The decision was made by the treasury but we were interacted with various officials along the course of the past so it was a cumulative decision. One was solicited to get input and they were supportive of not postponing and that the comment was they were starting to settle into the degree of reality about the issued a notice yesterday with a host of payment options. With more separate deadlines would it be better or worse . We are moving into processing the Filing Seasons and at the next Filing Season we have submitted becomes a little calm cumbersome but with respect to its spare is particularly selfemployed or underrepresented they begin to get a little confusing so some degree of certainty that they could move to for discretion on the back end is a proper path for her forward. I dont intend to cut you off but if you hear the tapping of the gavel it means i should go on to the neck stiff person with 24 people that want to ask questions. Thank you thank you, commissioner for joining us today for the important discussion. I want to speak about the impact and the millions of families to survive them to families in michigan has received more than 4. 8 million payments and thank you for working with the Social Security commissioner date estimate that about 12 million families and now we have estimated more than 300,000 families in michigan and as you know i can tell you that 12 million is overstated, but you have any idea what the number is quite im not at liberty, both part of the difficulty is we cant count people we cant identify so weve reached out and personally ive reached out to numerous folks around the country and thousands of Different Community organizations including those involving homelessness and others that have the ability to operate off the radar screen with respect to federal government. I appreciate that but when we are talking about another package, one of the things on the table is an additional 12 billion payment that will actually happen but given that what we should be doing in the current round and that they deserve any future aroun roundst should the strategy v. And what can we do to support your efforts those with members of the state weve created what we refer to as the toolkits and members of congress and senate and of an any type of organizatu could consider and they have a lot of information weve put our information into more than two dozen different languages i think that it can make sense as a strategy. What problems can be avoided repeating argue reaching out to them as well there needs to be a strategy. Issuing payments was determined rather than by the Internal Revenue service to provide a certain manner and the determination of how the payments went out whether it was by check or debit card at the marketing and outreach in any kind of Public Service announcement by a number of other federal and state agenci agencies. Thank you mr. Chairman. Are you there, senator portman. I am here. Can you hear me okay. Thank you for being with us today. Youre last year and we appreciate that challenges you facthe challenges youface and ht professionally. Over all let me say that im pleased you got them out as quickly as possible with one data point that was in the testimony it took us ten weeks to get the first adult into his 90 to 95 and i am hearing where is my check and i do think that that was one of the areas needed best in terms of the legislati legislation. Where do you do to address some of the problems encountered in the particulars of a it is a priority for the Internal Revenue service. We tried to get these payments out as quickly as possible and we put together the portal it was marched on april 15 and the 14 million successfully used it. The 6. 1 million successfully used and 192 million successfully for their payment so we have moved forward with that information but the focus if the people who added them to try to get payments to a. We are taking the payment refund us but they are not processing them as a result of the refunds it is critical and we have the information is something that cant be done so with regards to if makes a big difference in trying to improve so i look forward to the initial focus to get your answer again. Senator cassidy. The bipartisan bill provides the statfor state and local relt me ask do you agree it is related to the pandemic we have been working seven days a week since march and i am aware being shut down has an impact. Seminar menendez will follow up. Regarding the conservation theyve been revitalized and i know theres been a review of conservation needs a Historic Preservation caught up which is a fraction it doesnt seem like its drawn the distinction between the property in the Land Conservation with respect to issues like that that is where the effort is and will continue to be. With a little bit of a catch22 you dont do well if you do put it so that is a concern but theres also an issue im trying to follow up with one computer right now so i apologize for the delay. Could you give your insight on the attack credit we are contemplating other legislation and the safety space and we would love your thoughts on this. We are doing our best to administer these provisions for the businesses in this end individuals. We are doing our best. Hows the program gone a while . Today i am not aware of it but we would relish the opportunity to meet with members of congress were others that are looking to provide. I have a couple more questions. You have employees in the Energy Sector it would result in being aimed at the u. S. Trade or business or having an establishment in the u. S. And it would have been preferable it would be the treasury policy and i will take that back. Senator menendez. Do you suppose the system broke down anything, senator cardin thank you for your service. First i want to thank you for figuring out a way i know that would be a terrible inconvenience but thank you for the commitment. I do want to talk a little bit about the Taxpayer First act. The charm and mentioned it in his openings basement the implementation of that requires it to be more customer friendly as members of the Senate Finance committee. Indicating that we probably proy would be of the september date to later this year to november, december. We are working very hard on it and they take the experience very seriously. I think you are aware of the fact that the purpose why i did come on board i this because my experience on the outside to make things better. Every employee wants to do more, wants to do their best and the Taxpayer First act is an opportunity to move in the Revenue Service to the arena and the organizational structure we have more than a thousand. Anybody can submit a comment that we are working very hard to get pushback with respect to covid19. We were doing very well. There are members that are interested in this and i would suggest we have an opportunity for briefings so we understand what you are trying to do. We understand that it will impact what we urge you to keep us informed. To deal with the Employee Retention credit we would welcome your thoughts. We know the house is interested in modifying the program soon to the next. The retention credit is one of the initiatives. What challenges have you found to try to implement that . There have been 8degree of the folks the added as an opportunity to set took advantage to help a lot of evolf business is as well as employees. We have done pretty well in terms of identifying some indicators and filters that you have seen the number within about two weeks oakland as did the paperwork that is an arena we would like to have some input on to win it back for the lack of a better word we devoted quite a few resources to that soon we would welcome the opportunity to meet with staff and members to explore these options. It did provide some relief with some other provisions. These are tender reissues and we know with regards to this it could begin packed it. Weve introduced legislation that would provide additional low income workers. I just urge that we Work Together to get the experiences as to how we can use the Internal Revenue code to encourage more security options for the Walmart Mobile workers to be for the vulnerable workers. Senator menendez, langford, if you want to be recognized, please tell the staff. Senator bennett. Thank you to senator carper as you know they allowed them to register for the economic impa impact. It seems to have created a limited tax return as a formality for each household. And no way to claim the earned income tax credit and the child tax credit. The suitable Online System so millions will go without the money they desperately need. With 2700 of Economic Impact payments of the eit c that she is in this socalled filing trap. So can you confirm the non filer portal is filing tax returns on behalf of these taxpayers . For those individuals the purpose of nonfilers is independent information of the additional 500dollar per qualifying child to get that in and we are about to issue guidance for these individuals to file a paper return it will be marked amended return and we will extract those from the mail and process those on an expedited basis. First of all commissioner thank you we had a conversation about the importance of that payment. Is there a reason why this can be done in a more expeditious way i appreciate you saying that they could be prioritized and that it slower to get these payments. Were trying to get things to come in through certain portals. I cannot commit this is where we will be announcing and to expedited. And then for a specific email for members of the house so if you have folks reaching out to you on these issues you can for that to us. Those emails are handled on the expedited basis as well. Given the fact that we have around 56000 employees working teleworking and continually today this is a priority thats a priority and other accurate statements when i use the word priority it is knowing the Human Resources to back that up also the employees to make this happen. People care and they care a lot. If there is anything preventing the irs from automatic benefits to households in this situation the irs already has on file is there any other way to be expedited given the challenges agency faces that to see the family need. When they came on board is when i learned about eitc and interestingly i was in a room at the lindon irs employees have been working on that since 1975. 98 percent of all refunds are paid within and processed accordingly paid within 21 days it is that 2 percent that is held up for a number of reasons. And that would be in the eit c arena. And how to make that program more efficient and quicker because at the end of the day these are subsidies to get into the hands of the people that truly need them. Thank you for joining us today and for your service in the people that work with you through the irs with that difficult job we are grateful for all that you do. Sometimes folks that are new in their jobs are reluctant to reach out and say i would urge you to do that some are really good at that. Light heiser is really good at doing that. I would just ask you to keep that in mind. With a kind of resources we provide looking at the numbers it looks like a high point through last year in terms of real resources the Budget Proposal for the next year is an improvement that is modest but not the lead but but nonetheless and for Additional Resources plead for the authority to hire people with these complex tax returns. So talk to us about the Human Resources with technical skills. And bring them on board and put them to work. The Taxpayer First act gave streamline critical pay we were exercising that that is a huge benefit to get on a more even keel basis for those in that regard. All government has difficulty on boarding people. And then to get on board. And i have taken to the town hall and interactions with employees that when you are out and about with privatesector folks four oh folks from other agencies let them know and bring them people into the agency to get a board quickly. To have resource issues from the human perspective and it is eligible to retire the next few years there is no real hiring from 2011 through 2018 we were able to hire last year. Is difficult to replenish on the attrition it went up 1 percent. I will ask you to stop right there. And on free file 1 million years ago used to hold town Hall Meetings and every year the middle of march with all three counties about midmarch and invite irs we would literally help people with their taxes. It turns out there is a better way to do that. And its called free file which mopey on most people dont even know exist. So in the country there is 100 million taxpayers who would actually take advantage of this and it is free. But just a couple million use that. And the prominent subcommittee on investigations and one of the things we delved into last year to make sure this advantage if a tree falls in the forest nobody hears that is it annoys of its a good helpful program and its free then why more people using it . What can the us to do in the irs and we do to have better access . They promoted to the extent that we can. It doesnt have the Marketing Budget since 2001 when it started. In the allocation of those resources is the effort and a dollar for answering a phone call im a huge proponent of free file it helps the right people and with the military and reported that comes out. In the outreach and knowledge and issues a press release that doesnt necessarily get to the person at the Grocery Store a bunch of people is a significant issue. If you have free file you cant use it. Thats a hurdle 27 percent increase in usage not including the nonfilers portal and it was instrumental to help launch the nonfilers portal by april 10 and come out march 27 and then be launched april 10. And im encouraged by what the commissioner said. Thank you mr. Chairman. The treasury inspector concluded in the investigation that i requested the potential abuses for carbon cash or on capture and sequestration by big fossil fuel companies. They had incorrectly claimed theres 900 million in credits. Those claiming 99. 9 percent they found that only three had the required monitoring and verification plans in place with the eta. Subsequently i wrote a letter to you urging the irs to take a number of steps to ensure companies that previously incorrectly claim the credit are held accountable and to ensure they dont move forward. Last night at 6 00 p. M. I got an answer to my letter. I understand the irs examined a portion of the incorrectly claimed credits and retroactively denied then and an additional portion could come under audit in the near future. In your response to ensure they are in compliance and then to implement a campaign to examine Going Forward to say quote the irs cannot examine 81 examined without proper justification and documentation but if the facts that i discuss here today supported by the investigation of the Inspector General does it constitute proper justification and documentation i dont know what does i understand those limited resources but it seems clear to me to ensure compliance carries a significant return on investment for the american taxpayer. So let me ask you again in person. Will you commit to auditing all previous claimants of more than 10000 to initiate a campaign to examine future claimants . We are exercising our best efforts with respect to the 45 q credit. Take compliant seriously to have significant Audience Resources and the report states the irs examiners have consistently denied the credit they denied about 60 percent of those credits. And trying to exercise our best efforts we have the balancing act to devote resources we only have 6430. I appreciate that. I have someone who has supported resourcing the irs. And that Energy Production and if 900 million as we got back already i can imagine whats available. So with the covid pandemic devastating cities and local communities that set up the unprecedented level of services that have a real drain texas to colorado to new jersey no state is immune one. 4 million American Workers ultimately those that need the most on the front lines you are the nations top tax official do you think state and local governments are facing the immediate fiscal clients on crisis they are experiencing in the middle of a pandemic that cause revenues to fall off the cliff . I am aware of the impact public and private sector to have so many individuals out of work and businesses shut down and the consequences for the health and safety side which increases expenses for a lot of individuals. If we have three or 4 million Public Employees laid off we have a lot less federal revenue come to the nations treasury. We are in the mode of 56000 employees teleworking to be socially distant and trying to accomplish for example examinations telephones processing returns. If you have three or 4 Million People laid off not working remotely but at the end of the day millions were not paying federal taxes that cost more to the federal treasury. Senator warner. So commissioner, thank you for your testimony today. Along with a another numbers and the members of the irs for what they have been doing for the cares acted is extraordinarily significant so one of the tools the employee protection act and something that was personally involved with and secretary mnuchin and in the house version there was enormous expansion and i have been working with the democratic colleagues and those paycheck security act which would greatly expand this to all one two oh and one of the main components is to allow companies to keep the payroll tax deposit to play on dash to help with their cash flow if it is greater than the payroll tax deposits. They would file a new form 7200 that advances payments we know there so many forms that the credit is fairly large and fairly modest we dont know the full takeup rate because the people that withhold their payroll taxes and to use the form 7200. But if we were looking at expansion of this tool what i am concerned about so far at least they have utilized the fax filing form 7200 rather than efile. I would like to know why is that the case and the high priority that is a major expansion. That we need you to focus because you have to convert that. Then why not have that online form available from the outset . And we have the paper form out as we did and we are taking a look at all options to streamline all actions Going Forward with the ability to do that and then created the ability it takes quite a bit of programming with the it individuals we have quite a few projects to lessen the importance by any stretch of the imagination. And to appreciate the fact you have 7200 a new form to die out. This is where a unique spot it is prominent the house does the greatly expanded version a number on the democratic side of the expanded use. A number of my republican colleagues had a variation on this. So to go higher on the list. And another area i was focused a long time to ease the Tax Compliance the gao published a major study. And for example and then to make several changes in with the reference to form 1099 k. Generally speaking in the last few seconds to make that easier for what we can do. And with the staffing issues. Were looking at a lot of different facets. There is a significant portion of the receipts go to expenses. Is not what we think it would be but there is a lot of options and its not a limited to them but its pretty pervasive for those who may be in the realm of an independent contractor. Senator cantwell i just want to keep working with you on thi this. I appreciate your cooperation. Thank you for holding this hearing. Many activities taking place to keep the housing credit production on schedule with state and local governments in response to the coronavirus we have seen significant interruptions was shortages and materials and delays as a result Many Properties cannot meet those deadlines. National council of state housing agencies there was a letter in march then asking to extend deadlines for other flexibility they need to give in these current circumstances. Signed by over 200 organizations. The irs is not yet given information so we dont act soon it will impact the Affordable Housing market even more than it already is. Is that guidance forthcoming . Let me get back to you that is forthcoming. I think thats on the treasury side a response is coming but i will get back to you on that and get back to you. You understand how important we dont have enough Affordable Housing. Now its more exacerbated by the covid crisis and guidance because every project is valuable. Hospitals are now paying for Affordable Housing. Because if they can keep them in Affordable Housing they will not show up to the emergency room every day. This is a pervasive problem. I want to ask you according to the National Taxpayer advocacy, as a result of coronavirus i want to ask about taxpayer assistance a clothing according to the assistance those readily available are the irs. Gov website. Many washingtonians and how do they require that type of assistance . All phone lines are open they will be open by mid july. And then they rotate folks in their and those that use sites for a variety of Different Things and 10500 of those sites shut down all of aarp. We have been working as hard as we can to ramp up as quickly as we can to maintain safety and Health Reasons for people to interact with us. And they will handle matters by appointment only. But the history is on the 50 percent who contact for an appointment are on that call. And they are not caught in some Automated System . They are retail they are out there. And with the earned income tax credit. The eitc 98 percent goes through we have complexities with treasury and everyone else to take a hard look at the Statutory Authority and the definition of a qualifying chil child. Thats where we launch. We have claims from the eit c claims are those who for one reason of those that are coming there is problems to verify a qualifying child when there is no link in the system. Doesnt have to be the parent of a qualifying child and we have continually asked were oversight. And correctable error authority you cannot adjust a claim on your own with information we have in our system to not have to go into a deficiency type of procedure. Time is expired. Can we show you language if you think that gives you the flexibility you need . Am available after this hearing. Thank you. For those on Recovery Efforts at the irs. And heating the calls of my committee and myself to deliver stimulus payments automatically to millions of Social Security and v. A. Beneficiaries and that something that chairman grassley asked about missing out on 500dollar payments because of short deadlines to provide the irs with information and families will need to wait until 2021 to get payments along with colleagues on this committee i sent a letter urging you to provide these payments as quickly as possible before 2021 and that we were considering doing that there were limitations. Can you tell us what specifically you are considering and what limitations the irs is facing to get them before 2021 . We have a pool of individuals who use the nonfilers portal that should have received that additional 500dollar payment im very proud of the effort of the employees to build several airplanes what we are flying to others and then had to adjust those and we found there was a gap in the pool was 365,000 and substantially that will happen by the end of july. And if that changes we will get back. Similarly, individuals who file injured spouse claims , there was a difficulty connecting that to find information that might not be front and center. We did our best. Im proud of how we did , Lessons Learned Going Forward. Certain areas to look into. And limitations the 2021 and Filing Season and that the it are working on. And then to get the money as quickly as possible. How do you get the information when that timeline looks like. Trying to do their best of the timeline of what those windows look like. And now to refer to a secondary payment for everyone some people were married some got divorced. Im talking about a very short window for those who are nonfilers to put information to get the 500dollar payments. So now those that you missed nation get that out so the people who could not get into that 48 hour window, how do they get it before 2021. Let me get back to you. Is not an easy thing to accomplish. Let me address the 48 hour window. I understand it exist i have another question will take that offline. I appreciate how hard everyone was working and they can have new tax credits during the covid19 crisis including for providing paid leave and employees and sends advance payments to employers to file request at the irs. However they said they will be delivered to employers within two weeks reports indicate they may be taking significantly longer. So will you tell us now delivering with advance payments to employers and are they proactively planning for a possible increase of request of these payments as States Reopen their economy . I will get back to you with specifics but we have processed about one third of those to come through in some asking for additional verification. Cash flow that are desperately struggling. Thank you for the conversation today. So talking to the caseworkers back in the state. And with that interaction with the irs and because of covid19 in the downsizing its been difficult to get answers to question so to go through this process to help taxpayers at this point. And those lessons that can be learned when we get things going again to get answers to questions what can be done for the future and knowing we have to work remotely to get the work done again . Shutting down facilities 90 percent of phyllis so that hes were closed we took the health and safety of our employees as a significant and limit and that created difficulty for others we work closely throughout as well as others in the irs and now july 13 essentially all processing facilities will be open all Call Centers Open and understanding open is a relevant term working different schedules and shifts to have folks spread out we have folks on the ground monitoring the issues to keep employees safe but like everybody else we are worried about interactions that might happen and a potential spike at the facility we are doing everything we can to get back online. We had 56140 individuals teleworking. The processed 14000 laptops people who were doing teleworking but not eligible did not have the facilities. We could get laptops and there is a Training Session with respect to security and a large portion you can imagine of the work we do is not telework eligible for security. With confidence i can say our it folks are as good as it gets. They are tremendous and care and work really hard and they have moved mountains to get as efficient as we can be with this pandemic. I appreciate that are there lessons that can be learned that can carry over from what we face right now into the future and still get the work done . And those on the phone the Customer Service representative to handle remotely. And to help significantly. We are headed in that direction. Let us know what we need to do because that will be significant in the future not only looking at space and cost but there are other issues that come up. You all have been incredibly supportive of us. We realize there are issues and those that come out of this but universally you have all been incredibly supportive and as important as it is to the country its important for people and employees and the strength of the agency when we make comments and sometimes senators that we circulated all employee messages because thats all we can give our people in terms of pat on the back. They are working very hard. We are exceptionally gratefu grateful. And there are ways that they have never anticipated. As you get closer to the july 15 deadline theres more questions than solutions so we appreciate the work for what we can provide we want to do that. Was Charitable Giving as a heads up when you alter tax code it alters behavior. There are six of us working together to resolve some of these issues on Charitable Giving some will come back and have longer conversations and with that in the future thank you again for the service. Im here chairman grassley thank you for this important hearing today. Thank you for joining us and want to associate myself with the comments of the workers and employees at the irs they are working all the time so whatever resources that you need it is a challenging time right now. I went to address concerns but those abusers have walked away with the Economic Impact payment. And then to issue those Economic Impact statements to not always accompany and split those payments in the same manner. I sent to you commissioner along with secretary mnuchin joined by the colleagues i havent received a response yet. So what is the irs doing . Because they are not getting it. And how do we take that into consideration. I have those on my desk in the process. I think your letter has some great suggestions. It was actually listed under request at the back of the letter. And things we are taking under consideration it is good advice from everybody as well. The individuals with respect to Domestic Violence and injured spouse claim i indicated earlier we will process those if its in july or later we will reach back out to give your timeline everyone at the irs is sympathetic and understanding for any victim of Domestic Violence and they care a lot this we can provide significant assistance so thank you so your suggestion was helpful. So it is common sense and if the irs can work to work with survivors of Domestic Violence. And thats a great suggestion. And then to implement to make sure giving you the resources. Im running out of time but. I have been told senator brown is remote . Thank you mr. Chairman i am here. Thank you very much senator and commissioner thank you for your service. Limits of a pandemic too many other black americans at the hands of police and as you know and with the Public Policy and is 150 million households that they are treated fairly and then the current tax code so you in congress all of us at this table in person so will you work to help us determine the tax code contributes . Sure. I thank you are aware that is a huge proponent of diversity and im the first commissioner who is in this country as a refugee. So i understand how people are treated. Research shows so the basic income with the first and last name and with the tax enforcement and those enforcement actions. Thats correct. Does the irs study the Enforcement Efforts there is no race for geographic efforts can you assure those that disproportionately by commissio commission. We have a zero tolerance with issues of discrimination. And we have heard that we have a diverse employee base. And then to make it better there is an implicit racism but the two of the irs developed this year and this is the poverty tool i know senator wyden supports it into many leave that money on the table. 80 percent is a place to start and thats why earlier this year with that recommendation with the automatic eitc for childless adults you couldnt make the automatic work because youre still missing information. But it still seems to me the ei at one dash and then to send the automatic eitc return you could ask for the basic information. So this is the replication of the official where is my refund tool. We will work with you thank you for the hearing. Much appreciated. These are tough times and we work hard to provide relief are struggling montana families workers and Small Businesses facing economic hardships. Much of that relief is in the tax code so thank you for all that you and your agency has done to facilitate that and look forward to have more really for montana and in the past three Months Congress has approved trillions of dollars of really for the American People unfortunately pushing out huge amounts of money so quickly, 10 percent but can you discuss it has taken with other vulnerable population. And then to get that terminology people and impersonating or help with the payment or maybe there is a fee. So those on the civil side of the irs and the treasury Inspector Generals office has been extremely aggressive not the ones that we dont find criminal prosecutions we investigate for prosecution and that will continue. I much appreciate that. I want to applied the work the irs has done to step up the abuse of syndicated also to applied chairman grassley for these transactions with the findings of their investigation very soon. Recent decisions demonstrate what we have long known the abusive syndicated is costing taxpayers billions to tarnish this conservation tool. And one recent case the and then an easement with 155 million. And those with strong rules to protect and taxpayers should not have to foot the bill and the integrity act. When they have the benefit more than two and half times. The irs will under this commissioner of the irs will aggressively go after everybody involved in those transactions those that take advantage are at risk and even with the 40 Percent Penalty i thank you will see a number of compliance actions over the next month. The resources put to use on this how helpful to put this enacted into law quick. It would help significantly. I went to know my support for the tax credit as part of the cares act the work focused design coupled with the business has to have experience that makes a good fit for the relief we are looking for and then to expand the tax credit so as i am wrapping up for the administrative perspective how has the advance refund process work so far . The process is working smoothly i with an issue having to efax versus the online portal and to streamline overall we think its working smoothly. About one third that on that basis we are talking six weeks. And then to have some data based on that. Thank you mr. Chairman. To appoint the senator from oregon has one followup question so if there is still a couple people i have not marked off the list yet. Let me know soon are we will shut down. Are there any people waiting before i go . Is just senator young. Those that are walking the economic tight rope right now every single day. This is the most efficient way to help them . And this is to the individual rebate idea to look at you have been helpful to us thank you when it be easier for the taxpayer in the irs with the previously filed information . With a laborious process and with that segment and with that the funds are there in the position of the business owner. Comes from a Small Business family it is sensitive to the issues. I will wrap up on this. And then it follows that. I do want to note what the irs needs to continue to fight fraud so the taxpayers and to be particularlys concerned about millionaires skipping out paying the taxes and we understand this didnt happen on your watch and we cannot find out exactly to follow up and then this cycle just repeats itself again and again and again. To the wealthiest taxpayers figure out the observation i would like answers and then this question that we agree on is a serious matter with respect to fraud i would like that within a week. I want to clear up something if im wrong on the statistics with regard to appropriations we have had some people on the committee claimed the irs Enforcement Effort is not funded sufficiently. And then the irs of an enforcement by more than what had asked for
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