Transcripts For CSPAN3 Federal Officials Testify On Waste Fraud And Abuse 20170428

Morning. This hearing will come to order. I want to welcome our witnesses, appreciate your time, your testimony, and look forward to your oral testimony and answering i think what will be some interesting questions. I frequently say from this podium that the General Accounting Office and Inspector Generals are, youre our go to agencies in government doing so much to root out and identify and eliminate waste, fraud prosecutor abruce bus, duplicate prod grams which is what this hearing is about is the reports by the gao that really started with the Pretty Simple amendment offered in 2010 by senator cole burn in the debyte bait over increase in debt sooelg ceiling. Something we all hate do, but it were going to do it its kind of nice to get some measure of control and a Pretty Simple concept asking the gao to start issuing reports, do inspections on different duplicated programs has resulted in 75 billion worth of savings over seven years, which is pretty remarkable based on the amount of Budget Authority that gao has, 3. 8 billion over that same time frame, thats a 20 two one u one return orn investment and your overall return of investment is what mr. General. Put the microphone on for this. 112 to one. And i know the Inspector Generals have pretty good rate of return as well. So i do ask unanimous consent that my written remarks or written Opening Statement get entered into the record. I do want to start with a couple charts ive prepared here for the hearing just to put things in context. We got a recent Congressional Budget Office report on longterm debt and deficit and thez they always report these things as percentage gdp and we go through fair amount of effort to convert those to dollars because its a little bit more meaningful if the for the last number of years because its been a couple years since theyve updated their projection ive been saying that the 30year projected deficit is 103 trillion . Well, weve moved forward in time and we havent solved the problem and now unfortunately the projected deficits over the next 30 years is 129 trillion. Thats about 10 trillion over the next decade, 37 trillion in the second decade, 82 trillion in the thishd decade. And to put that in perspective approximately all assets held by businesses an households is equal to 128 trillion. This would be tact on top or 20 trillion of debt, 62,500 for every man, woman, and child in america was unfortunate it seems like nobody is paying attention to this. Were certainly not addressing here in congress obviously from the change to 103 to 129 trillion over the next 30 years. I want to put that in context and ive got one other chart here which also puts in context the 75 billion in, you know, mr. Doe dare row in no way, shape, or form i do want this to detract from you your efforts here which i think are great. But just so everybody understands that same sevenyear period where the gao with their great work, 20 to one return investment saved 70 2350i6 billion dollars, we spent 25,000,000,000,000, we borrowed 6. 6 trillion of that, about 26 . So in other words 26 cents of ever dollar we spent we borrowed. Just showing the magnitude of the problem here. I want to thank all the witnesses i think were go to have a good discussion with the Inspector General talking about refundable tax credits ant improper payments, fraud and abuse of that program. Obviously one of our favorite institutions or universities and one deer to my heart, all three of my kids went to the university of wisconsin in madison. We have chancellor Rebecca Blank and shes going to be fwaukt duplication of different regulations imposed on Research Universities and just in general the overregulation, the difficult time that universities have to deal with federal regulations on their operations. Then we have mr. Keith repko from the v. A. s Health System to talk about the problems dealing with duplicated regulations in constructing Healthcare Facilities for the finest among us in the is is going to be a really good discussion. Again, all laid before us because of a Pretty Simple amendment by senator tom colonel burn receiver years ago and then the extent work of gene dodaro. With that, ill turn it be over to my Ranking Member senator mccaskill. I want to echo many of the comments of the chairman and i continue to be frustrated along with my colleague and former Ranking Member senator carper who has carped on improper payments for as long as i can one of my favorite veshz, the carp. There you go. I think that gao is such an important ally to this committee and i want to take this opportunity as i try every time youre here to make sure you tell all of the people in that big building that their work does matter, even though it is too often ignored or set aside. What you all do is really important and you are tremendous public servants. And i love associating with the auditors at gao as a former auditor. Your annual duplication report sets out some important work that you have done investigating how the federal government spends tax dollars. You consistently identify concrete steps that we can take and the vek executive branch can take to eliminate a lot of wasteful spending. You all have saved so much money for this country, but theres obviously a lot more work that we have to do. I want to welcome the other witnesses to the hearing also today, i especially want to welcome keith repko who is here as the leader of the v. A. Facilities in st. Louis and i dont think probably the other members of this committee can appreciate how nice it is to have that roll off my tongue since we struggled in st. Louis trying to fill this position for literally years on end. And i think people need to realize some of the management problems in the v. A. Can be baird out by t beared out by the fact that we would open the head of the v. A. Facility st. Louis job position and no one would apply. Now, that tells you something. That tells you that there is a real problem in either the support these managers are getting or what were paying them, but when you open a job that has that kind of responsibility and nobody wants it, it means that we still have a lot more work to do in figuring out how so thank you for filling this position. It has been badly needed, the stability there has been badly needed and were thrilled to have you today. The reason youre here today is one of the things pointed out in this years report is the problems v. A. Has managing construction. And finance is clearly weve put a lot of capital into v. A. Ive been somebody banging the table to get that gun. I want to make sure our facilities are first rate, adequate, and there isnt a lack of facilities that did is causing any undue delay or problems with our veterans getting healthcare. But clearly this report points out that this is not always being managed well in terms of how these projects are being undertaken and executed and we want to spend a little bit of time on the management of those Construction Projects. I also want to echo about the tax credits. It is particularly im glad youre here, dr. Blank, to talk about grants and the problems in terms of administrative burdens on grant recipients and also administrative burdens on reporting Crime Statistics that are difficult for our universities right now. But im also glad youre here because i think we need to talk about the growth in improper payments and a new form of tax credit, refundable tax credit, and that is the amount of easily determined overpayments in the american opportunities tax credit. It may not be as large as the other refundable tax credits. Doesnt mean temperature wont be if we dont get a handle on this. And the notion that its just as simple as double checking with universities and seeing how many hours someone is actually going to college is pretty jaw dropping that we are allowing a billion dollars to go out the door every year without just the rudimentary checks and balances as to whether or not those tax credits have been earned by students attending higher education. So thank you all for being here. Thank you, chairman, for having this hearing and ill look forward to questions and comments as we move forward. Thank you senator mccaskill. It is the tradition of this committee to swear in swoitz if youd all rise and raise your right hand. Do you swear the testimony youll give before this committee will be the truth, the whole truth, and nothing but the truth so help you god . I do. Our first witness is mr. Eugene doe dare row. Mr. Doe dare row has been the comptroller since 2010 and has more than 40 Years Experience at the agency. Including his acting comptroller general, chief operating officer, and head of the accounting and Information Management division. Thank you very much mr. Chairman, good morning to you Ranking Member senator mccaskill, senator peerts, its a pleasure to be here. I appreciate very much the words that you said complimenting gao and i will make sure to pass tai long to all the people in the agency. We have such a dedicated talented workforce and they deserve to hear such compliments. I also want to ensure this committee before i get into talking about this years duplication report that i am worried about the Fiscal Health of the federal government. I issued a special report this past january basically saying that the federal governments on a longterm unsustainable fiscal path and i call for an action plan by the congress to deal with fiscal policy changes that are needed to be made. Now, while there need to be changes made in fiscal policy both on the spending and revenue side, particularly with entitlement programs, there are some things that can be done. And addressing overlap and duplication, improper payments and the tax gap are among those areas. This year, in our this is our seventh report on overlap duplication and fragmentation. The we report on whats happened over the last six years with the 645 recommendations that weve made to date in the first six years. 51 of those have been implemented by the congress and the executive branch. 31 have been partially addressed, and 18 have not been addressed at all. As you point out, mr. Chairman, 75 billion has already accrued in savings, but theres another 61 billion in the pipeline that will be accrued because of acces that have been taken so the total amount of savings is 136 billion so far. Now, this years report adds 79 new actions and 29 different areas that range across the federal government from the Defense Department, could save tens of millions of dollars by better managing their Virtual Training program and integrating them and simple things like advertising for recruitment purposes where theres seven different advertising programs competing in the same market, to hundreds of millions of dollars that could be saved in implementing our recommendations on medicare and medicaid, dealing with such things as providing not adequate compensation for uncompensated care that hospitals give. We think the formulas outdated and doesnt really reflect the true amount of uncompensated care, particularly since its going down with the expansion of medicaid, for example. Other areas where they could reduce improper payments in medicare or medicaid. We have a number of recommendations in that regard. Most of the improper payments of 144 billion in the federal government come from medicare, medicaid, and the earned income tax credit so im glad were addressing that today and im glad russells here to talk about that issue as well. So with the new areas that were adding, there are 395 open areas yet of gaos recommended suggestions. I recently met with o b director mulvaney and i mentioned to him that were going to be sending letters to each of the departments and agencies outlining our open recommendations and giving priority attention to those i think the head of the agency needs to pay personal attention to over the coming months. As ive done in the last two years. And i think this will be particularly helpful as they go through their exercise of looking at reorganizing, streamlining, and gaining some more efficiency in the federal government. Most of our open recommendations are addressed to the executive branch. But i also have what i call senator lankford appendix to the testimony this year where he asks every year what can the congress do, give us a list. So we have 61 open matters for the congress consider. I would comment that most of the savings that have occurred to date have come from Congress Taking action. And most of our savings, there are tens of billions of dollars that are still on the table that could be implemented and successfully achieved through implementing our recommendations. So i look forward to continuing the work with congress and i look forward to continuing work with the executive branch which im committed to do. Im in the process now of trying to meet all new cabinet officials, talk about a working relationship and the recommendations that gao has to make their operations more effective and efficient. So thank you again for the opportunity to be here today and i look forward to answering questions at the appropriate time. Well thank you very much. Our next witness i actually got a couple charts. Lets put the first and proper payment chart. Everybody has this in front. Just lay the groundwork in terms of improper payments on refundable tax credits just in this thee programs. Earned income tax credit and this is i believe 2015, correct . 69. 8 billion additional Child Tax Credit 28. 5 billion and the American Opportunity tax credit is 4. 4 billion. Those are the refundable tax credits. Improper payments were 25. 1 billion or about 24 . And the next chart shows how this has been a problem certainly for the seven years of the duplication report but as i was talking to Inspector General ahead of time, this has been going on for 20 years and despite in spite of all the good efforts and publicized in this year after year after year, it doesnt look like were make a whole lot of progress as you can see how much money is being spent on the, you know, tax expenditure on the tax credits and how the improper payment rate still is above 20 . Just stubbornly stuck there. So, again, thats kind of the backdrop for our next witness, mr. J. Russell george. Mr. George, since becoming nominated by president or since being nom mated by george w. Bush in 2005, mr. George has served as a treasury Inspector General for tax administration. Prior to assuming this role, mr. George served as the Inspector General of the corporation for national and community service. In addition to his work as an Inspector General, he serchd adds a member of the Integrity Committee of the counsel inspectors general for integrity and efficiency. Mr. George. Thank you, chairman johnson, Ranking Member mccaskill, and members of the committee. I appreciate the opportunity to testify on taxrelated improper payments. Tick ta has conducted a number of reviews that evaluate the iras efforts for erroneous payments. I will highlight our ongoing work. Refundable credits are designed to help low income individuals to reduce their tax burden or to provide incentives for other activities. Because these tax credits are refundable, they are vulnerable to unscrupulous individuals who file fraudulent claims. To date, the earned income tax credit remains the only refundable credit the irs has designated as high risk for improper payments. However, tickta has continued to report that the irss child credit and the American Opportunity krp substantially understate the risk of improper payments for these credits. These credits collectively account for more than 100 billion claimed during tax year 2015. For fiscal year 2016, the irs issued an estimated 25 billion in potentially erroneous payments for these credits. This represents a significant loss to the federal government. In addition, the assessment of the risk related to premium tax credit improper payments continues to present challenges for the irs. This credit created by the Affordable Care act assists individuals and families in paying for their health insurance. Unlike other refundable credits, the irs is not solely responsible for administering the premium tax credit. As a result, the irs cannot effectively assess the risk of emproper payments for this credit on its own. The irs and the department of health and Human Services continue to work on a methodology to effectively measure improper payments relating to this credit. To reduce certain fraudulent and improper payments, congress enacted the protecting americans from tax hikes act. Among other provisions, the act moves up the deadlines for forms w2, wage and tax statements, and other income information related documents and provides the irs additional time to verify earned income tax and additional tax credits that are based on income individuals report on their tax returns. According to house ways and means committee, these integrity provisions are projected to save roughly 7 billion over ten years by reducing fraud, abuse, and improper payments in refundable credit programs. To date, our work related to this legislation has found that the irs has properly withheld refunds for returns with earned income and additional tax credit claims and release dollars those returns that were not identified for additional review. Irs management informed us of these claims are being verified solely against form w2 data to identify claims that have unsupported income. Irs management indicated that for the 2017 Filing Season they do not plan to use other income reporting documents to systemically verify income reported on tax returns with refundable credit claims. The irs has cited a number of technical challenges and timing issues that need to be addressed in order to use this information to verify income at the time tax returns are processed. In addition, the irs was unable to implement processes to identify erroneous claims for the 2016 Filing Season for taxpayers filing tax returns for prior years to claim certain refundable credits. Referred to as retroactive claims. Our tax our review of tax year 2014 tax returns filed and processed during the 2016 Filing Season identified 35 million in refundable credits that were erroneously paid to taxpayers filing retroactive claims. Finally, the irs still does not have the authority to correct tax returns during processing in which the information provided by the taxpayer does not match Information Available to the irs. As a result, the irs must conduct an audit to address potentially erroneous refundable claims without correct able error authority, the irss ability to address those potentially erroneous refundable credit claims that it identifies remains limited. Mr. Chairman, members of the committee, we atticta remain sneers our mandate to provide independent oversight of the irs in its administration of the tax system. As such we plan to provide continuing coverage of the irss efforts to identify and reduce improper refundable tax credit payments. Thank you for the opportunity to present my views. Thank you mr. George. I did fail to point out the sevenyear total on refundable tax credits just those three areas is 341 billion and the improper payments is over 100 billion. This shows the magnitude of the problem policemen lexington in just those three refundable tax credits and were just kind with obamacare and the house plan were looking at more refundable tax credits. Our next witness is ms. Rebecca blank. Ms. Blank became the chancellor of the university of wisconsin madison in july of 2013. Prior to serving as chancellor, ms. Blank served as the Obama Administration secretary of commerce. Under president bill clinton she was a member of the council of economic advisers. Chancellor blank. Thank you chairman johnson and Ranking Member mccaskill, members of the committee. I appreciate having a chance to say a few words about the regulation of federal research at our nations top universities. I was an economist prior to becoming chancellor at the university of wisconsin in madison, and i believe deep that i we must do everything we can to help Research Universities thrive. These institutions hold the key to our future economic prosperity. But theyve also become some of the most regulated entities in this nation. At least 35 federal agencies regulate our research any university of wisconsin with multiple interpretations of the rules and many confusing, duplicative and often unnecessary requests. So my message today is very clear. We have added layer upon layer of regulation and were at a point where in is seriously impeding the productivity of our scientists. There are as many as 23 different administrative responsibilities associated with every federal research grant. Each of those steps requires time from either the researcher or the support staff. Ten years ago at uw we had 50 fulltime staff handling the Regulatory Compliance issues on human and Animal Research projects. Today we have 80. There is not another function on campus that has added 30 fulltime positions at a moment in time when we have been working hat hard to increase efficiency and reduce staff. Much of the burden falls not on staff but on teachers taking val iebl time away from the classroom and the lab. The last survey indicates that nationwide scientists with federal funding spent 42 of 250i78 u their time on regulatory and administrative activities, about four hours in a ninehour day. We recently surveyed our scientists at uw who do Research Involving Human subjects and half of them, 48. 5 told us they had given up or almost given up on at least one Research Study because of the red tape involved. We cant afford to sideline potentially lifesaving research. The 21st century cares act and the American Innovation and cares act took some big steps in reducing these burdens but as the gao notes in their report there is more to be done. So let me give you two recommendations. First, two key provisions of the 21st century cures and the American Innovation and competitiveness act should be prioritized for plaem mentation. The new Research Policy board should be set up and streamline Grant Application and reporting requirements need to be put in place as soon as possible. Right now, almost every agency has different formats for submitting a research proposal, reporting on research progress, reporting on effort, reporting back on what your results are, and demonstrating compliance with the regulations. And the agencies have very different rules on how results should be saved and be made publicly available. Thats confusing, costly, and inefficient. Recently theres a report by the National Academy of sciences the details these problems and i encourage any of you with an interest to read through their much more extensive recommendations. Secondly, the implication of the final rule should be prioritized which allows lowrisk projects to be subject to different restrictions than highrisk projects. The recently adopted final rule scheduled to take effect in january, 2018, aims to reduce Regulatory Burden on Human Subjects Research that poses little to no risk to participants. For example, survey research should be subject to different rules than medical research that may be testing medical procedures on human beings. But without clear guidance to address differences in how these regulations are interpreted and applied, i promise you that problem lemsz will persist. Let me give you an example. One of our pediatricians is wanting to create a registry to track Health Information from children across the state of wisconsin who have a very serious but relatively rare condition that can cause heart attacks at a young age. Sarg that information can improve medical care and can help keep healthcare costs down. Were actually six months into the effort to try to get approval for this project and we still have not been able to do so because there are multiple sites that provide information to this rej registry. Every site sin terp pregt the regulations differently and therefore every site is demanding different information from us and in different restrictions. Let me be clear that i am not arguing that we should do away with all of the regulations governing research. Federal regulations help us ensure research integrity, they increase access to Research Data and results, and they help protect human and animal subjects in research. But we need to be smart about the regulations that we have and how we implement them. I have spoken today about the regulations affecting our research enterprise, but let me nooet that my rin testimony also gives a number of examples of excessive regulation that increases unnecessary costs and interferes with how we serve students. No nation on earth has been as successful as the United States at building remarkable institutions that offer an outstanding education and conduct the kind of basic research that fuels innovation and helps solve immediate problems in the real world. Thats why the rest of the nation wants ton send us their best and brightest students. But international preeminence does not come with a lifetime forever guarantee. Excessive regulation of research ooupts university can only erode their success over time. Thank you for your commitment to helping to bring this unwielding system under control and with your help great institutions will continue to keep this nation on the cutting edge of innovation. Thank you. Thank you, chancellor. Again, i really want to thank you for bringing this to my attention a kum u couple years ago when you came to my office. And the Small Business administration has studies that puts the cost complying with federal regulations at 2 trillion per year. You divide that by the number of households its almost 15,000 per year per household. I appreciate the fact the university is graping with this problem, that youre highlighting it our entire economy is as well. Our final witness is mr. Keith repko. Mr. Repko currently serves as Medical Center director of Veterans Affairs for the st. Louis Healthcare System where he oversees 3,000 employees. Prior to becoming Medical Center director he served as Deputy Director where he, to in the top 25 of v. A. Facilities as well as patient advocacy. Good morning. Senator lankford and senator peters. Thank you for the opportunity to participate in this hearing and to discuss the design and Construction Projects at the jifr son barracks and john cochran campuses of the v. A. St. Louis Healthcare System. The st. Louis Healthcare System is a dual affiliated full service Healthcare System providing inpatient and out patient care in medicine, psychology, rehab and many other subspecials. Its a twodivision facility that serves veterans in east Central Missouri and southwest illinois. John sock dran division is located in midtown st. Louis and comprises the Medical Centers surgical capability, ambulatory care units, intensive care units, and our emergency department. One of the Top Priorities for the department has been improving access to care. In st. Louis weve take than to heart. While more work remains to be done, both the v. A. And st. Louis has made real progress. In fy fiscal year 16, st. Louis has hired 385 staff including 36 physicians, four physician assistants, 93 nurses, and 252 other critical occupations. Weve extended clinic hours at five of our locations and hold saturday clinics at two of them. Additionally, we have increased the deliver riff care by using telephone consults and secure messaging to better use our providers time, improve access and meet veteranss cares needs where its convenient for them. Jefferson barracks zifgs a multibuilding campus over looking the misriver in south st. Louis county. It provides psychiatric treatment were spinal cord injury treatment, geriatric care, rehab services, and has a program for our homeless veterans. The v. Sachlt currently pursuing a Major Construction project on this campus that will enable us to better serve veterans healthcare for decades to come. The project is a joint vha and nca venture and will construct a total of five new buildings. The project will relocate primary care, Mental Health and Specialty Care clinics out of its current 1920s building into a modern environment and allow for expansion of care. Well also construct a new patient aquatic and rehab facility, replace an older facility that frequently we have to shut down in the heat of the summer due to lack of adequate airconditioning. Lastly, the project will replace an obsolete fire alarm system, construct a new support mild building, provide 800 net new parking spaces, and construct a facility to replace our obsolete engineering and consolidated warehouses. Upon completion, the project will decrease the amount of infrastructure maintained and operated by vha through the inefficient and underutilized building. It will also provide approximately 30 acres to the nca for the Jefferson Barracks national cemetery. Without this land the cemetery would be wloezed for bear yulz in several years. The total cost is 366 million and it was approved in 2004, partially funded in 2007, designed in 2008, started construction in 2010, and is scheduled to be completed in 2020. Currently the project is 52 complete and has no cost overruns. The john cochran campus also has a major project that was designed in 2010. The project proposes to construct a new inpatient bed tower and allow for the expansion of Specialty Care clinics with an estimated cost of 433 million. In 2015, all of v. A. s Major Products including the john cochran project were reevaluate and rescored through the skip process to ensure the projects requirements are still valid and the project remained a high priority for the department. St. Louiss john con cochran project did not score high enough to be included in the 2015 2016 budget cycle and therefore is not currently actively being developed by the department at this time. However, the project is eligible to be reconsidered in skip and will be reconsidered for funding in the future budget year. In closing, each day we move towards our goal of improving and streamlining our processes in order to provide the Exceptional Care that veterans earned and deserve. Mr. Chairman, this concludes my statement. Thank you for the opportunity to testify for the committee today and im pleased to respond to any questions from you and members of the committee. Thank you mr. Repko. I start the question with mr. Doe dare row. Quite honestly, when you take a look at the number of recommendations that have not been addressed at all in government, its actually surprisingly low. I mean, the fact you have over 50 fully implemented, 30 some partially implemented and less than 20 not is really testament to, i think, what youve been able to accomplish of getting your recommendations implemented. You said that congress has actually passed laws which the primary reason for doing that and youve got 61 recommendations now. You can give us some kind of sense how many different laws and just kind of in general it took to get that level of plaem mentation and what would what would you contemplate with your recommendations right now . Would you maybe suggest this Committee Try and put those 61 recommendations into one piece of legislation and try and get that on to the floor and get it pass dollars or was this more effectively done kind of individual bill by individual bill . The approach that has been taken in the past have mostly been bill by bill and theyve taken advantage, for example, in eliminating the direct payments to Farmers Program which duplicated other programs it was handled through the farm bill, congress let the edgea knoll tax credit lapse so they didnt actually do anything and it went it went away. But i think any legislative vehicle that you can come up with would be an appropriate vehicle. Some of the ones that we have recommendations to the congress for action yet havent been addressed for a number of years. And im concerned that they could get stuck in the normal legislative process and perhaps having a combined on the books, if you will, or a package of these bills would help. So i think, you know, any legislative vehicle would be good. I dont in past congresses they tried and proposed legislation that would have forced agencies to do this but id love would work with senator mccaskill and work with the gao and lets craft something that will impose that requirement on the agency tosz implement these things. Yeah. I think the past efforts have been focused on like all of our recommendations, they have to respond to. I think if it would be better if you target the specific recommendations that youre comfortable with and that weve included, particular lit ones in the list of the 61 for congress to take action on. And then theres other opportunities for the congress to put some pressure on the administration to implement some of our other suggests. So well work, you know, bipartisan fashion with your staff, different senators, and well figure out what that slift and well get a piece of legislation i think leader mcconnell would be very open. Hes looking for bipartisan piece of legislation to move across the goal line. So lets definitely do that. Mr. George, i remember, i think it was your 2012 report you listed ten addresses with i believe it was the earned income tax credit where there were multiple filings. And the top address in there 24,000 filings with requesting and obtaining 46 million of refundable tax credits. Was that the earned income tax credit or was that the child there sore many instanss of people taking advantage of the tax system using that scheme, sir, so it may have been the earned income tax credit, it could also have been the first time home buyers credit, or the additional Child Tax Credit. My question was, to me, one address were 24,000 claims were 46 million, i know were not making a whole lot of progress. Have we at least closed down that abuse after all these years . Is the irs still failed ton that part zblfr i have to give, again, as i noted in my testimony, the irs some credit as it relates to the earned income tax credit as senator, you and i spoke out in the hall hall and then as you discussed during your opening remarks and my comments, the amount of improper payments for the earned income tax credit was inexcess of 20 billion a year a few years ago. And so and even though its now roughly 16, 17 billion, thats still moving in the right direction. It has even though there was a slight uptake in the last but again, my question was to me it would be Pretty Simple to take a look at the address and say, well, were not going to allow if theres more than ten, you know, refundable tax credits claim, were going to take a look at that. It is absurd that 24,000 claims went through one address. Have they fixed that problem at least . They have not fixed it, no. They still have the problem, sir. Yikes. Part of the problem with these is the individual taxpayer identification number, correct rather than Social Security number . Thats correct. That is just right with abuse. You can describe that. Yes. Congress passed legislation that now requires the use of Social Security number for or if youre a green cardholder the use of that number for the earned income tax credit. However, for the additional Child Tax Credit which, again, is a growing problem, while we at the igs office believe that federal law does, i that same restriction, the irs has taken a different position on that issue. And we while we, again, have debated this back and forthwith the lawyers at the department. Lefs tack that on to our gao piece of legislation here. Chancellor blank, i do want to give you an opportunity because i thought your written testimony was pretty powerful about other overregulation. As im hearing your testimony, what youre asking for is not no regulation, but some common regulation, some uniformity so that youre not trying to comply with umpteen different reporting requirements that could all be grouped together and provide common forms, is that can you just talk about some of the other parts of your written testimony . Yeah, no, thats absolutely correct. Right now we have different forms for conflict of interest, different forms for reporting, submitting, saving data and it becomes incredibly complex when your University Like wisconsin, like other big Research Universities that are Getting Research funding for many, many federal agencies and every one has dilg different requirements. In my rin testimony i talk not just about the Research Issues but the issues relating to students and wunt regulatory issues that i find most compelling relates to the query act which regulates how we deal with Crime Statistics on our campus. Its a very important act, very, very useful and valuable to us for tracking. But certain interpretations of what the cleary act that the department has put upon us includes such things as any place where our students spend more than two nights we have to collect local Crime Statistics and report them as if they were on our campus. So whether our students, you know were we had engineering students going off to to an elon musk competition. That takes an enormous amount of time and effort working with local police in those areas and quite honestly results in a reporting of Crime Statistics that has nothing to do with our students and is simply a misperception about what type of crime is happening on campus. So, you know, that type of interpretation of the law, just makes life very, very difficult. And increases our expenses in ways that are not helpful. Ill come back to this. Senator mccaskill. Thank you. Let me first do the v. A. Mr. Doe dare row, your 2017 report talks about the management of medical facility Construction Projects and basically what i gather from the report is that youve got an Agency Within the v. A. That is supposed to be overseeing this at each local site, but there isnt appropriate coordination between the onsite personnel and this part of v. A. Thats supposed to be managing all these Construction Projects, is that a fair vumry or you can fill . Theres really not good coordination. V. A. , generally speaking, is very decent tral liesed organization with very little oversight and accountability from the central organizations of v. A. And i could say that broadly speaking, that applies to healthcare, that applies to disability as well. You know, in this case, the change orders that were being approved werent going through a regular timely process and design changes. And you could see these add to the costs of the projects and so we asked them to put that under a better control process so it could be approved in time so everybody knew what the consequence would be of the change orders and design processes there as well. I think the the big change that really congress required is now Going Forward any project over 100 million is to be run by someone outside v. A. Most of the ones right now are run by the army corps of engineers, so you actually have people that are experts in Construction Projects, the ones under 100 million are still being run by v. A. And some of the ones that were over 100 million that werent new, some of them were transferred like the denver project that ran into a lot of problem and then the v. A. Now, the only responsibility if the constructions done by the corps of engineers for another organization is for v. A. To come one costs of activating the facility, actually putting the medical equipment in there and preparing it for operations and so that should help a lot by taking the big new Construction Projects out of the hands of v. A. Yeah. And put them with the corps, army corps or another, you know, competent organization. So Going Forward the army corps will be doing the projects that are as large as cochran. Anything over 100 million. It will either be the corps or the legislation requires something other than v. A. So far theyve gone with the corps. Yeah. They could choose someone else, but the corps is the only one so far. Im proud that we dont have cost overruns with the projects in st. Louis, mr. Repko i think thats terrific. I know were a little bit behind schedule but a lot of that has to did with how quickly v. A. Has decided to request the money. I think one thing that americans need to realize is that congress has been very, very generous to v. A. Since fiscal year 2008 we funded 177 of the request of v. A. In fiscal year 09 we funded 183 of the request. Fiscal year 10, 106. Fiscal year 11, 100. First cal year 12 was the only time since fiscal year 08 that we fund less than 100 of the request that was made by v. A. I dont think theres anybody else in government that has that kind of track record in terms of securing appropriations particularly for capital in even the military doesnt have that kind of success rate as it relates to capital. So im glad that were not your run. I do want to bring to your attention, i have recently learned that there have been some concerns regarding the quality of the ongoing construction at the facility at j. B. , and we have been in contact with the v. A. Ig about this and we have been assured that they are looking moo it. Are you aware of any of these concerns about insteg gritty and quality of the kuks thats ongoing there . I know its not your direct responsibility, but are you aware of any proc lems . Have they been brought to your attention . Just recently actually working with your staff and preparing for this became aware of some but i can tell what you, weve had a very Good Relationship from the facility. In fact, we have a team that works for the Medical Center, so works for my office that interfaces and thats their full job is interface with the construction folks for Central Office in v. A. And our project is managed by the v. A. Office of construction Facility Management because it was prior to. Prior. Prior to that other regulation. I can tell you we have daily conversations, my staff do, with the cfm staff and managing the project. And myself and my associate director have weekly and monthly meetings with our staff. And at this point we have no no concern of any serious issues in this project either moving forward, eejer in fault quality, i can tell you i served as chief engs near for 12 years and in that year in those years i managed a lot of projects and had staff that managed a lot of projects. I can tell you theres no such thing as 100 perfect contractor or project. I would say contractors would say theres no such thing as 100 perfect customer. But i can say in our project cfm is working through any issues and theres, like i said before, theres nothing significant either in quality that im aware of or any concern that would jeopardize this project. Okay. Moving on to the tax credit, i tried to take a look at the education tax credit. One of the things that jumped out at me, mr. George, was that of the 3. 6 million returns with questionable educational credit claims, 49 of them almost half of them were prepared by a tax preparer. Dont we have something in place that if there is there are tax preparers that are doing this, i mean, is that why one address is responsible for all those because thats somebody whos put a shingle out in a community saying let me prepare there have been examples of that, senator, but the irs in response to recommendations that we have made and concerns expressed by congress, they have begun outreach to tax preparers who in all candor are at the frontline in terms of helping to avoid tax fraud. So you think 50 of these questionable education claims, these preparers just didnt know any better or were they trying to get over . Well, i dont want to impugn everyones reputation. Theres no question that some of it is ignorance and some of it was malfeasance. I would be interested if it is possible to know if these tax preparers were individual proprietors or if they were some of the large chains that do tax preparation. Obviously if this is something thats endemic it seems to me the basics of making sure a refundable tax credit that your agency is preparing for a client would follow the rules as to the 1098 and as to how long they are in school and the you know, the appropriate institutions that qualify, which are the three big ones on that particular credit that always raise the flag. Well endeavor to give you that information. But if i may, senator, i dont want to let the irs completely off the hook here. The irs has not used every avenue that it could to confirm that someone who applies for that credit is entitled to it. So, for example, the department of education has a list of databases which the irs for free, or for a nominal fee at least, could have access to. And theyre not doing that . Theyre not doing it. Okay. Thats ridiculous. Theyre not toing it. It is totally ridiculous. It applies to additional credits, too. I have said it many times before at other hearings, but whenever there is Third Party Reporting of income, it is almost a 99 compliance rate. But once the irs fails to have access to that Third Party Reporting and relies solely on an individual, the compliance rate drops dramatically. Finally i know im out of time, but i really would like and if you want to, ill wait for the next round for you to answer it, but i think it is important when you report to this committee or any other committee that you at least give us a sense as to whether or not the lack of staff there have been dramatic staff cuts at irs. No question were leaving money on the table. It was decided around here the way were going to make points with our constituents is is cutting the irs. That is like cutting off our nose to spite our face because these are the people we need to bring in the receivables. It doesnt make sense to me and i would like for you at some point i know im two minutes over and the chairman has been indulgent. Very indulgent. We have given the irs the responsibility as well, so it is a problem. I want to be clear the address used on the taxpayers return is the taxpayers address, not the preparers address. 24,000 returns implies theres 24,000 People Living at that address which is a simple check with databases. Senat senator langford. Thats a crowded house is what that is. Thanks for being here, yall, and the work you are doing. We appreciate you bringing these issues to light. We have often talked about a bill Claire Mccaskill and i worked on and tried to get done in the last session of Congress Called the taxpayers right to know. What you have tun in duplication work is phenomenal. What we tried to get accomplished in the last session and what we can accomplish soon is to be able to get the evaluation tools out there. We are missing a tool and you are missing a tool. We wait for the report yearly when it comes out. It is something we should be able to pull immediately with the agencies making that Information Available. Every taxpayer should be able to pull this information. We should be able to see how things are evaluated. We should be able to see the basic spin patterns. Should not be a Rocket Science request of our agencies. They already have that information, just to be able to make it available. So any other comments you want to make as weve talked about before the taxpayers right to know and that particular bill . I would urge congress to complete passage of that bill and send it to the president for signature. I think it would make a huge difference in identifying overlap, duplication, fragmentation in the federal government and provide a better accountability tool to the congress and the agencies. It is severely languaging. One of the biggest difficults weve had in executing our responsibility under this requirement to produce this report is the lack of information thats available on what it costs for programs, have they ever been evaluated, what has the evaluation shown. This would have that information automatically available and be really, really a very much more efficient way to address this issue. So i would encourage its passage. Well, we look forward to that. It passed unanimously in the house and it seems to get caught up in the senate. So well try to work towards the final passage on that to be able to get that done. You mentioned in your report this year the uncompensated care issue on hospitals. Yes. Which is an incredibly difficult to wrap your head around type issue. I would like you to talk through anything you can can on it. This balances out whether the federal government as they pay hospitals for uncompensated care that comes in, whether they pay on the medicare or medicaid portion, talk us through it because it is a billion Dollar Savings but a big issue to hospitals. Yes, and it has been a big issue for years. The problems that we identified is right now in order to determine how to pay uncompensated care, the center for medicaid medicare studies, cms, uses the medicaid workload of that particular hospital. So they dont have actual numbers on what the uncompensated care has been, so they use a proxy. That proxy is not a good proxy, and, of course, with the expansion of medicaid under the Affordable Care act there are more people insured so there should be less uncompensated care in theory and in practice. Right now thats not the case. The second part of this thats a problem is when cms goes to give t the Medicare Program goes to give money to hospitals for uncompensated care, they dont take into consideration what they have paid under the medicaid program. Theres a possibility you could be compensating more than once for the same cost. So weve recommended to cms that they collect the actual cost figures for uncompensated care and reimburse the hospital a certain percentage of the actual uncompensated care. Theyve agreed with that, but they dont plan to implement it until 2021. They want to give the hospitals time to adjust. I would encourage the congress to encourage them to act more quickly, given the unsustainable nature of these two programs and the need to reduce their costs. I do note you brought to cms an issue you identified before about with the affordable act, in the way the subsidies are done in areas where theres fraud potential there, in areas yall tested. You brought to them eight recommendations of what to do. Cms said they were going to do it and then didnt implement any of those. Yeah, theyre still trying to work through doing the risk assessment. We understand it is almost complete. We are looking at the premium tax credit, the implementation by both cms and irs, and we should have a report available this summer for the congress. That will be our First Complete look at that whole process from as mr. George mentioned, russell mentioned, both irs and cms have responsibilities under that credit so were looking at both. Thank you. Russell, we talked before about this as well, and thats the eitc and all of the refundable tax credits. Often the irs will come back and say this falls on preparers. As is mentioned, about half of them actually have a preparer. Irs said if we get a certificate he have indication on these preparers, then well get fewer mistakes but they attempted to do that about six years ago and failed, and then theyre trying to come back at it again. The recommendation has been made to irs before, instead of doing a requirement thats a mandatory requirement for all of your preparers to go through a certification, you just say to preparers, if youre going to get faster returns, you then have to go through this certification. If youre going to be a preparer, if youre not certified your return may take three months to come back. If you are certified it may take 21 days. To be able to tell them, if you want to be a certified irs tax preparer and get faster returns to your clients, youve got to do this. That way they get training in eitc. Why would that no work . Senator, before responding, and i neglected to do this at the outset of my comments to questions. Since president reagan, every president has issued a directive indicating that tax policy is within the sole discretion of the assistant secretary for tax policy, and so the answers that im giving you is not on behalf of the entire department or the administration. Thats fine. Take that into account. Theres no question that that is an idea that is worthy of consideration. But as you pointed out, there was a sensible proposal to have certification, and for some reason again, whether it was the industry or others, it was not accepted. Mr. Chair. Senator langford could add on to this point. We recommended to irs several years ago that they should regulate the tax preparers. They went ahead with the proposal. It got taken to court. The court found they didnt have the statutory authority. I think congress could give some authority in this area. It could be a good program, but i think congressional support would be important. We have an outstanding recommendation to do this. It is one of the things that we mentioned. Senator mccaskill mentioned theres a high error rate associated with paid preparers. We sent an Undercover Team into 19 tax preparers to try to see if they would give us the right answer. Only two of the 19 gave us the right answer. Thats not surprising in some ways, but it is stunning. One quick comment on this, mr. Chairman, on this for va as well. Thank you for stepping up and taking the lead in st. Louis va and other areas. We have a new director in the Oklahoma City va who is doing a fantastic job trying to help us in turn around. We are the poster child for what gao mentioned on construction issues. Our seventh floor is not usable, our third floor is not usable, we cant get a parking lot finished outside. The elevator doesnt work in the middle of the building. It has been just a chain of issues with contractors that the director is trying to help us unpack and be able to fix, but this issue has been an ongoing issue. It is not new but i appreciate everyone stepping up to be able to take the lead and be able to help us in that as others have done as well. Thank you. I know it is my privilege and honor to serve in this capacity. Thank you. Senator peters. Thank you, mr. Chairman. Thank you to each of our witnesses for being here today and for your testimony. We certainly do appreciate it. Dr. Blank, i owe you a special debt of gratitude, not solely because of your long track record in public service, which of course is distinguished, but you are the former dean of the jerrold Forward School of Public Policy in michigan. It was one of the excellent jobs i had in the past. That was an excellent answer, but not my question. She is not big blue anymore, my friend. Point welltaken. I have several on my staff including some folks in the room today that appreciate your service at the university of michigan and at the gerald ford school. Thank you. I also want to add to my colleagues comments and thank you and your staff for your tireless work in putting this report together as well as your other report. Im encouraged to hear the 75 billion figure weve been given is soon to grow quite rapidly as well and it is because of the tireless work of everybody there. Add my thanks to the other thanks you received from my colleagues. Before i ask a couple of questions here, mr. Chairman and Ranking Member, i would like to join in your efforts to get greater compliance with these jl recommendations as well. In fact, i am working right now with senator gardner. We have a bill before the committee called the cost savings resolution which would require hearings from the relevant committees on these reports within a time period. So however that may integrate with the work you and senator mccass ki are doing, i think theres a great opportunity for us to come together and make sure what we have seen in performance continues. My first question relates to what weve been talking a fair about today, and this is the payments particularly for the earned income tax credit and other credits as far as compliance. The figures are stunning. The fact you have 20,000 returns going to one address is stunning. I say that in the fact that im the really a Founding Member, i am a Founding Member of the senates payment caucus with senator rounds looking at modern payments technology. I had a chance recent to be at one of the Payment Companies to see the work theyre doing in fraud detext. The private sector the has really figured this out because fraud is not just a problem with eitc. Any kind of payment you are making as a company, and if you are in the payments business theres a lot of fraud out there. They have made Great Strides and have limited substantially in the new technologies that are coming on board are really incredibly impressive. To what extent do you think we need to be looking at modern Payment Technology . It seems as if the irs is not using any of it. To mr. Russell, mr. George. Thank you, sir. I will say this. The irs is not in the position to not disclose mistakes that occur or fraud that occurs when it is questioned by congress or the ig or gao. I, woulded in the private is ek tore, senator, and im not questioning your point directly, but a lot of times banks Wont Disclose when their systems are breached because they dont want to shock stockholders or regulators, what have you. Whereas, again, the irs is not in that position. Therest no question th is no qu irs in theory could implement changes in their processes that could make it more difficult for people to engage in unscrupulous behavior, but they are so malleable that he being the bad guys, as i call them that it is very difficult for the irs to keep up with it. As senator mccaskill pointed out, it is partially a resource issue. As i pointed out before, the irs sometimes simply doesnt implement changes we think would be simple. I believe you were in the room when i talked about if they shared more information with other departments such as the Education Department as it relates to the American Opportunity tax credit. This is a fact oid i wanted to make sure i conveyed to you before the end of this hearing, and this is an opportunity to do so. The irs did on its own make a request to congress for what is called correctable error authority which would allow them to if they saw mistakes or different types of information that they have versus what the taxpayer provided, they would be able to change the taxpayers tax filing form and give the taxpayer the opportunity to contest the information if it hurts the taxpayer in terms of causing more of a Tax Liability than they think theyre entitled to. Now, if the irs was given that authority we estimate that it would cost the irs approximately 1. 50 to implement that change. But without that, the only way the irs can do it is through an audit of the tax return, and the audit costs roughly 300 per taxpayer. So there are changes that could be made, but you the irs needs more authority and, there again, they need to be able to cooperate more with other government agencies. Go ahead. Actually, just one other question thats important and we can talk further about this issue off line. But i want to draw attention to the issue in the duplication report about the challenges that we face in maintaining some of our satellite weather monitoring capabilities. Im the Ranking Member on the committee that oversees noahh and what we need to do to have these essential capabilities operating. Could you speak on how the Defense Department may need to rely on and collaborate with noaa and other agencies in this issue moving forward . It is important to have collaboration between the department of defense and noaa. Noaa is the gateway to a lot of International Agreements that we have with satellite systems around that world that could be available to provide assistance. Just for an example of that, and thats one of the problems that we identified in Defense Department. They did an outreach to noaa but didnt have a formal process to be able to do it. They made some inaccurate assumptions about the availability of a european satellite which would dictate what kind of coverage they would have for cloud characterization as well as in defense theaters of imagery of whegteather situas they would need for combat purposes. As a result, they had to redo their study and come up with different plans in order to do this. This could have been avoided through a more formal process. We suggested they do that. They signed some agreements with the air force, for example, right now with noaa but it doesnt cover the rest of the department of defense and it doesnt focus on the Actual Exchange of data that would occur or should occur between the parties. This has been a longstanding problem. Right. As you know, the project before there was supposed to be coordination on the whole development of geostationary and polar orbiting satellites. They were supposed to have combined requirement. They never could come together. After years of effort and billions of dollars they couldnt reach agreement. The Obama Administration said, fine, develop your own efforts individually. Because noaas responsible for one polar orbiting satellite for the afternoon orbit and the Defense Department is responsible for the polar orbiting satellite in the morning, they each have their own activities. What were saying is if thats the policy decision, fine, but you need to talk to each other and coordinate. They could use spare parts, exchange with each other. It makes imminent sense. For some reason they just are too sluggish in implementing this recommendation. We have broader issues we made recommendations with the space program. There are 60 different entities operating and nobody is in charge. We have made recommendations there needs to be some organizational strauk tour changes. I would be happy to talk to you more about this issue along with our experts in the area. It is very frustrating. Billions of dollars get spent here without adequate management coordination. Well, i would like to have further conversations with you about that. It certainly makes seps to coordinate that, but im also concerned about in the president s budget significant cuts to noaa and what that would mean for weather satellites. Those satellites, as you mentioned, are important for the department of defense as well, and a cut on that weather forecasting capability has impact not only with civilian operations but Defense Operations as well. Yes. We have to think about this in a core designated way, would you agree . I definitely agree. In fact, the environmental satellites issue i added to our high risk lists several years ago because of concerns about gaps in environmental satellite Data Coverage that could have significant consequences, both to do d and their operations but also to weather forecasting in the United States. It could have Public Safety and economic consequences if we dont get adequate warning that people could take precautionary measures. I am very concerned about this area, and i would be happy to talk to you more about it. Appreciate it. Thank you so much. Sure. Thank you, senator peters. I want to pick up two comments you made that makes imminent sense, for some reason we cant get it done, and go to mr. George, the air Correction Authority. As a business guy, my controller comes in and says we can correct it for 1. 50 or keep doing it the way we are doing it now, it costs 300. Again, it makes imminent sense you go the route where it only costs you 1. 50. But for some reason can you vib w describe why we havent done this . Has there been an attempt to block, is there some reason for not giving them the Correction Authority . I have no idea. This was within congress, but they do need legislative authority to do it and they currently do not have that. Gene. Yes, the irs has been given this map authority for very specific types of tax credits and other issues. They havent been given the Broader Authority that russell suggested. We have made the same recommendation. And i think with proper safeguards. Think it goes to concerns that congress has about giving irs too much authority, but i think this area makes sense. Theres a good case for it, with proper safeguards that should be put in place. Nobody wants a disadvantage the taxpayer and the due process they have. That would be the resistance, the legitimate resistance about giving the irs more power than it already has, kind of a suspect agency, i got that. I will go right to senator highcamp if you are ready . Thank you so much. As we look at narrower and narrower spending opportunities, more cuts, making this work right is critical. An area that senator langford and i have been focused on is federal hiring. Last congress i introduced the flexible hire act to help the federal government high and retain vibrant and effective federal workers. I think that is absolutely critically important to supporting the work that the government does. This idea came out of the challenges we had during the bachen explosions and looking at the challenges we have hiring importa border patrol. It would make hiring and Human Resources more flexible, including recruitment and retention. Gene, my question is for you. Ensuring that agencies have the resources they need i think is absolutely critical to addressing the federal hiring challenges, and i was really great to hear opms launching of hiring excellence campaign. How do we maintain efforts like that . What do you see in terms of federal hiring duplication improvements that we can make in the hiring structure that will get us people who actually Pay Attention to duplication and come to us with great ideas on how we can save the taxpayers money in. One of the things we suggest and recommend in our rot report is we looked at the hiring efforts, and the one year we looked at this there were 105 different hiring authorities that were available to the agencies but there were only 20 authorities that were used really to hire 91 of the people hired during that prior year. So, you know, our suggestion to opm is, you know, why arent these other authorities helpful . If not, maybe we should eliminate them, refine them. Which ones are effective . Have they effectively communicated that across the departments and agencies . So, you know, in a lot of cases there may be a need to give some additional authority, but theres plenty of Authority Available and agencies arent using it fully. The question is why not. Thats what weve recommended that omb do. So far theyve only looked at and evaluated six of the 105 hiring authorities that we suggested they take another examination of. When you look at the aging of the federal workforce and you look at how many people theoretically will need to be hired to replace people who are going the retire, i think it is like a third of the people in the next five years. Yes, right. How do we improve that process and how do we encourage, you know, some autonomy on the part of the agencies but still maintain an overall system the attic approach and how do we avoid duplication and slowtowns in federal hiring . Well, one of the first things would be to go back to the regularly appropriating the money on time. Really . Yes, yes. We have to i hate to bring this up, but operating under continuing resolution thats less than last years money is effectively you know the most amazing thing is we all agree with you but somehow it doesnt happen. I know, but id start there. Okay. And then i think you need to have opm really look at the hiring i dont think it is a problem, hiring authorities, to be honest with you. I think it is a matter of the execution on the part of the agencies to use the hiring authorities. I think theres a cultural problem here that most of the personnel departments and departments and agencies are based and view their responsibilities to make sure nobody does anything wrong as opposed to making sure that they are proactive in helping the managers bring in the people that they need as soon as possible. So i think that you need to force opm and the chief, Human Capital officer councils, to change that approach. I have no problem with the gao hiring good people. If we have the money and the authority, we can bring them in. But i see other departments and agencies struggling with that process. Opm is not providing enough leadership in this area. I think you should look for more leadership out of opm and the chief Human Capital Officers Council and put more pressure on them to be more aggressive and helpful. I know that you know this is a major focus of our subcommittee this year, and so i want to close by thanking you and all of you for your service, especially you and your team. Gene, you guys, if only we had listened to you, i think we would be better at what we do. Thank you so much for the great work that gao does and that you do personally. Thank you. Senator carper. Thank you. I apologize for being in and out. We have a hearing in the Public Works Committee that i serve on as well, so ive been trying to do justice to both groups. Were working on cloning here in the congress to be in two places at one time. We will wait to see what the tax proposal details look like. I understand some steep rate reductions may be in corporate taxes and other taxes and the election Budget Office would suggest it is going to make the deficit a lot bigger by maybe trillions of dollars, and the Administration Says the pay to offset that would be growth. I hope theyre right because it is a lot of increase in deficit. But what it does, it makes more important what you are talking to us about, that we find other ways to do our work more cost effectively Going Forward. I never understood why we were so intent on reducing the amount of resources we provide to the irs to do their job. We provide the constituent services, all type of constituent services, operations in our offices in home states. We have three counties in delaware, we have offices in all three counties and we get a lot of inquiries about theyre tax related and pertain to the irs. The irs used to provide reasonably good responses. Over time it has degraded, and one of the reasons why is because we make changes in the tax code. We just make them late in the will calendar year and they become effective beginning in the very following calendar year. We dont make the tax code simple or easy to understand and to comply with, and then to add insult to injury we reduce the amount of resources the irs has to either through technology or through people to help explain and work through all of this. It is mind boggling to me. Im told that for every dollar that we might increase through the resources for the irs there are actually increased revenues by substantial amounts. Do you know anything about that . Have you heard anything along those lines . Yes, they do, you know, have a good return on the dollar investment for every dollar that theyre given additional money. What weve though noted is they really cant tell you which specific enforcement activity led to a greater return on the investment. So we think that that he ought to collect and use better information to determine whats the most effective way to get the additional bang for the buck and have better roi information in order to do that, and so that they could use whatever resources that Congress Gives them in a better way. Okay. Good, thanks. Commissioner hodgkin was before the finance committee not long ago and we asked him. He said, we believe for every extra dollar we provided and resource we pay back for, there are estimates higher than that. It sounds like real money to me. This might be a question for russell george. Mr. George, nice to see you. One of the things irs has asked for is something called extreme line credit will cal pay authority, which is something that you know a little bit about. Would you just take a moment to explain what it is and why you think it might be important and the right thing for us to give them . Yes, because of the technical nature of many of the responsibilities that they have, they have to compete with private sector entities in order to gain the expertise needed to fill those positions. And because of the disparity between what the private sector pays and what the Public Sector pays, that Authority Allows not a huge pay differential, but enough so that you can attract and they have attracted key and very effective officials, government workers. That authority expired recently and they lost every single one of the people who were hired under that authority. So we highly support we actually did recommend that that authority be provided once again to the irs. Are you familiar with the issue of folks who were preparing taxes and getting paid for it, theyre not cpas, theyre not necessarily accountants, but theyre people who routinely prepare millions, maybe tens of wimillions of tax returns and the work that they do is not always very accurate . Oh, most definitely. Earlier gene spoke about this, but we too at tigda conducted tests where we would tend them people who were acting the role of people who needed tax returns completed. The outset of that endeavor the Response Rates were terrible. It was less than 50 accuracy in terms of tax what would you suggest we do about that . Well, because of limited resources, as was pointed out, the irs is relying on volunteer tax centers more so. They still have their own Tax Assistance Centers but theyre not fully staffed because of resource limitations. The irs directs people to their website which is helpfulful if you are computer literal. Unfortunately, many people who are Senior Citizens or who are not financially able to gain access to computers are unable to take advantage of that. But there are ways in which to the address this, sir. Thank you. Yes, we have an outstanding recommendation that Congress Give irs the authority to require some certification of these tax preparers. You know, in participation with them, not an onerous thing, but some minimal educational Certification Requirements because there are so many tax returns prepared by these preparers. A couple of other Things Congress could do to help irs yes, please. One is to lower the threshold for the requirement to electronically file your tax returns and the w2 information, for example. Right now you have to have 250 employees in order and above, then you have to electronically file. If you lowered that to 5 to 10 of returns you would be okay. They receive right now about 18 million paper returns yet. So theres still, you know, somewhat drowning in paper even though more returns come in electronically. That would be a big help. Okay. You would need less people because the paper returns have to be handled, they have to be coded, they have to be converted. Also, it would be helpful to give irs the expanded mandate that partnerships and scorps file electronically as well. Having that in an electronic format would be helpful. We talked earlier about giving irs broader map authority to correct errors when things come in, to have proper safeguards to have taxpayers appeal if they think theyve not been treated fairly. That would save them, as russell pointed out before, in order to fix some of those things they could fix right away and senator johnson mentioned this it would cost them 1. 50 if they fix it right there as opposed to launch an audit which costs 300 as russell says, it makes sense to give them that authority. Between gao and the irs or the ig, russell, we could check to make sure theyre using those authorities properly and not disadvantaging taxpayers. Mr. Chairman, the words of my father are ringing in my ears. Just use some common sense. I think weve heard about six good ideas here today, and im interested in pursuing them. I hope any colleagues will want to join me. I know we will have a vote called here at 11 30, so we have a few more minutes left. I want to go back to chancellor blank real quick because it is duplication hearing. In your testimony, remind me again how many different agencies does the University Report to in some way, shape or form . 43. 43. Again, youre not against youre not opposed to regulation, but what you would like is some cooperation, coordination, uniform, common types of standards, correct . Absolutely. Part of the problem is youre reporting very similar things, but each agency has their own process for developing their little questionnaire. How much do you think you could reduce just really talk, if you can give one example of what were talking about here. So, yeah, it is hard to come up with dollar figures on Something Like this, and i think the real issue is the time of researchers actually going into teaching and research as opposed to paperwork. So, you know, let me give an example of a particular project where there was a great deal of interest in trying to use a variety of samples that another Research Project had had collected. These are are medical tissue samples. It took over a year for the researchers to work their way through a variety of approval processes. They were finally simply gave up on the project entirely. It was very closely related to some of the issues around alzheimers. It had a real potential for, you know, expanding our research in that area. They essentially wasted a year of their time trying to get approval on something that they simply could it not get approval to because enough different agencies and approval processes had to be gone through, all of them required different things, all of them so they just said, this isnt worth our time. They gave up on it. Can you name some of the agencies, not to point a finger, but according to usda, fda. It is all of the major agencies, nsf, nih, usda, energy, theres a variety, those are some of the big funders. I might also say that the igs office as well does very good work is often a problem here. They often have disagree with the agencies on what certain standards should be, and so they come in and audit us and hold us accountable for toidoing thingse way the agencies told us to do and bringing us in various way to bat. It means there are two groups in each agency coming at us, often with different standards and believes. That type of coordination has to start occurring. In your testimony you used the same language i was talking about, layer upon layer upon layer. I mean procurement policy, we have layer upon layer upon layer of different controls designed to prevent us from wasting dollars and we probably spent billions trying to comply with all of the layers of regulation. We have to in some way, shape or form figure out how to cut through that, provide some uniform standards on similar types of approvals where you are not having to do some of things things conflict, right . You have one over here, if you comply with this one you are probably out of compliance with something over on the other that is part of the problem, yes. Senator mccaskill, did you have anything . Yes. First on the do not pay working system, is it true that we are going to have to do something in order to let the irs get the full master file . Yes, yes. The Social Security administration believes there needs to be an amendment to the Social Security act to get the full best master file. This includes about 10 more records. We think this is important and encourage that should go in our legislation. The notion that we cant figure out who has died before we pay them, i mean we talked about this in this Committee Many times. We pay and then chase, and that never has a good ending. We have to figure out how not to pay up front instead of paying and chasing, and it is it is something basic like knowing who is dead seems to me the federal government cant figure that out, then theres no hope. There is no hope. I wanted to briefly talk to you, dr. Blank, because i care very much about the clary act and i am painfully aware of how laborious that particular requirement is. I wouldnt mind it being laborious if we were getting data that allowed us to actually get a handle on apples to apple comparison, campus to campus, apples to apple comparison between communities and campuses. But because the clary act does not mirror the uniform Crime Reporting at the fbi, we in fact, your report talked about, gene, we dont even there is is like 16 different ways Sexual Assault is defined against four different agencies that are collecting data. We have no hope of understanding this problem if the data that we are collecting is not done in a way that it can support good Public Policy. Theres no question that this is a problem here. Would your Police Department at the university of wisconsin, would they be willing if we could do it to do the same standards for clary that they have for ucr . We would be delighted to have that type of coordination. I might say it is a further problem on our campus that the state requires us to report in ative format, in a different way as well. We have three different reporting standards. You have clary, you have ucr and you have state . Yes. Well, it would be good if we could figure out a way just to make everybody do ucr, and then all of you are using the same definitions for each crime. You can compare community to campus, all of those things. I made the mistake in a public forum of saying i thought clary i wasnt as, frankly, as articulate as you were talking about how important clary is and that you want that data. I just said clary is messed up, and of course everybody came down on my head, oh, my gosh, you cant quit making campuses report this data, which of course is not what i intended. I want the data to be good and i want Police Department to spend most of their time catching people who are doing bad things to people rather than trying to figure out three different reporting standards. I agree completely. All right. Maybe we can put that in also. I want to also say that i think if we cant get nih especially if we could just get nih and nsa to agree on one standard for reporting and have it interchangeable, i mean that would to a lot for all of the medical Research Facilities in this country. Both the issue of putting in reports, of reporting on effort and on conflicts of interest and on study progress as well as what happens after something is completed, where it gets filed. As you may know, theres recent a recent requirement that is going to be going into effect asking us to file the data for all research thats federally funded. Every agency has is doing this differently, right. And you get many projects that are funded by multiple agencies. That creates just an enormous by the way, the data is not very useful then. Absolutely not. Because somebody comes along and theyve got to go to four or five different databases and invariably what happens is we pay a contractor to make the databases talk to each other when it would be much simpler if we just required one set of data. We add another layer. We add another layer. Finally, i want to give you a chance, mr. George, to talk about the problem at the irs because were trying to starve them and make sure that they dont have adequate resources. I mean right now a taxpayer that has a serious problem that they need to address, they are the customer of irs. They are sitting on the phone to talk to a real person theyre sitting on the phone for ten hours. The customer. I mean this is all under the idea of lets make sure the irs is you know, lets cut it and cut it because we all hate the irs. Okay. We all hate the irs. Lets have enough people there so they can do their job and serve the taxpayers that deserve to have their questions answered, and particularly deserve to catch the people that are trying to get tax credits that they dont deserve. The irs is a Revenue Generating arm of the federal government. It needs the resources necessary to help people comply with their tax obligations. There are studies that show the easier you make it to comply with your taxes the more likely people are to do so. But, senator, if i may just take one quick minute because i in response to a statement by the chairman and by senator peters about multiple refunds going to tens of thousands of addresses, in response to our identifying this, the irs has instituted some changes, and theyve just reported to us that in april of this year they were able to stop over 92,000 of these, you know, ill gotten gains, almost half a billion dollars. Okay. So progress is being made there. I wanted to give them credit there. Ive been making this point for quite some time. The real solution is to you can talk about tax reform. He would rather talk about sax simplification, tax rationalization. Then i think you actually could have an irs that toss their job, responds to the customers, the american taxpayer, and can actually do it with less money, but it is about tax simplification. Thats really the solution. Hopefully we can Work Together on that in a bipartisan fashion. I want to thank all of you. Again, this hearing, again, i think is pointing us in a direction. You will see this committee that has been working in a bipartisan fashion. You hear it from a number of senators right here. Were going to hop on this and work with a number of agencies and work with you to try to address the problems you highlighted here. This is valuable and will result in bipartisan action. Thank you very much. With that the hearing record will remain open until may 11 at 5 00 p. M. For submission statements and questions for the record. This hearing is adjourned. This weekend on American History tv on cspan3. Saturday night at 8 00 eastern on lectures in history Townsend University professor on Victorian Era culture in the u. S. In the last half of the 19th century. These are the values that the victorians are promoting. Restrain yourself. Dont give in to your urges and gluttony and desires all the time. Be modest. Dont brag and make yourself the center of attention, and work hard. Do not be lazy. And at 10 00 on reel america the 1984 film soviet active measures about the so much yet unions measures to use forgery and bribery and spreading of fake news to further their cold war agenda. Secret packages were brought in our office, and almost each time there would be some forgery there and, you know, like sunday at 6 30 p. M. Eastern, historians talk about their roles as expert witnesses for court cases. So as i see it, history is a sort of add on. It is the sorts of evidence or conch tact to which most judges and lawyers turn to, to the extent it is useful in a particular case. Then at 8 00 on the presidency, president ial historians on the most influential first ladies. Dolly madison who really shaped informal politics in washington. She really understood that at social gatherings you could get men to agree to what the president wanted to do or get two warring factions together over ice cream. For our complete American History tv schedule, go to cspan. Org