Transcripts For CSPAN3 Hearing Explores IRS Record Retention Policies 20170726

Million tax returns. Among them are individuals, Small Businesses like my own, who must retain their tax records in case the irs ever wants to review them. The irs must also identify retained records to define lengths of time in accordance with the federal requirements. These records may later be needed to respond to requests from congress, private citizens, or those bringing suits against the irs. All of these parties have a right to ask the irs to produce complete records and the irs has a responsibility to provide those records. However, tgif found that the irs policies do not comply totally with all the federal requirements, which ensure that all records are readily retrievable and usable. Especially the production of the irs emails currently rely on the irss ability to search thousands of employees hard drives, or alternatively each employees willingness to print and file important emails. Neither system is sustainable or reliable enough to satisfy the voluminous records requests received by the irs. The irs also changed its record retention policy three times since 2013, creating confusion across the agency. Additionally, the irs has failed to stand up to a basic email system capable of automatically archiving employees emails. These issues ultimately reduce transparency, open the agency to exposure to civil lawsuits, and inhibit congressional oversight of the irs. They also created a double standard whereby the irs is not required to maintain basic records in the same way that the average american citizen must do. No individual or Small Business could do the same and not be subject to punitive actions by the irs. Furthermore, this issue has been raised repeatedly by congress to the irs for years without a permanent solution. So here we are today to discuss the most recent finding in the irs progress, and addressing these concerns. I believe members on both sides of the aisle want to ensure irs has the authority and the resources it needs to administer the code. However, in return, we need to see stronger efforts by the irs to ensure that records are properly retained and easily retrievable. We would also like to see the irs work to improve how it procures and implements its i. T. System. To that end, i look forward to hearing from the witnesses today. And now, i yield to the distinguished Ranking Member, mr. Lewis, for the purposes of an Opening Statement. Good morning. Thank you, mr. Chairman. Thank you for holding this hearing. I would also like to thank our witnesses for being here today. As we discuss the tax reform, our subcommittee will play a very Important Role in improving the Internal Revenue service. Todays hearing will examine irs policies to store, archive and produce records, including electronic mail. We will also review the irss ability to respond to legal freedom of information act, including those from members of congress. In 2015, the agency received over 10,000 fia requests, and 90 within an average of 23 Business Days. The requests took longer than 20 Business Days. Generally involved privacy of legal issues that prevented a timely response. We all agree that federal agency must process and reply to any request for relevant electronic and other records in a timely manner. For any agency, including the irs, Information Technology is key to meeting this standard. This is one of the many reasons that Congress Must ensure that the agencys i. T. System is not only fully funded, but also fully staffed. Since 2010, congress cut this agencys budget by almost 1 billion. Thats a lot of money. Thats a big cut. In the last five years, the agency i. T. Budget was cut by 71 million. And the irs lost nearly 290 i. T. Employees. Many of you heard me say many times, on different occasions, that you cannot get blood from a turnip. Early this month the Inspector General of the Tax Administration released a report on the irs electronic records retention policy in i. T. System. The report made five recommendations, and the irs agreed with every single recommendation. And suggestion. To move forward, we must remember these lessons learned. And we must be mindful of the irs i. T. System needs. Mr. Chairman, together we have a good and inclusive process and i hope that we can continue our strong bipartisan work to improve the irs. Again, i thank you, mr. Chairman, for holding this hearing, and i look forward to the testimony of our witnesses. And i yield back. Without objection,s, other members Opening Statements will be made part of the record. Todays Witness Panel includes three experts, gregory kutz, jeffrey tribiano, Deputy Commissioner for operation support for the irs, and edward killen, government liaison and disclosure at the irs. The subcommittees will have received your written statements. They will all be made part of the formal hearing record. You have five minutes to deliver your remarks. Well begin with you, mr. Kutz. You can begin when youre ready. Mr. Chairman, Ranking Member lewis and members of the subcommittee, thank you for the opportunity to discuss electronic Records Management. Todays testimony highlights the results of our recently issued report on this matter. My testimony has two parts. First, i will discuss or findings, and second, i will discuss our recommendations. The irs is required by federal law to retain and produce records when requested through appropriate means. However, the irs has challenges responding to several highprofile requests from the congress, the public and the courts. The loss of information resulting from this has a result in inadequate systems and processes along with human error. Some key findings from our report include, the current email system does not meet federal requirements for storing and managing email messages. We reported last year that the irs previous attempt to implement a new email system was unsuccessful at a cost of at least 12 million. Electronics records storage policy have changed repeatedly since may of 2013. The policy has changed from wipe and reuse Information Technology to save everything, to wipe and reuse equipment for all but two parts of the irs, to the current policy of refrain from wiping the data from any hard drive. It is not surprising that this has resulted in some confusion. Storage of tens of thousands of laptops and hard drives at dozens of locations across the country is not a sustainable Record Keeping solution. In the interim policy for irs executives to archive their emails was not implemented effectively. Although many challenges remain, progress was made in several areas during our audit. For example, irs has developed a new policy prohibiting the use of instant messaging for official business and requiring any instant messages that are a federal record to be retained. Improve policies for preserving records for separated employees. In addition, the irss most recent attempt to implement a new email system is planned to be completed by the end of this fiscal year. We also found the irs closed over 70 of freedom of information act requests within 20 Business Days as required. Moving on to my second point. As you mentioned, we made five recommendations to the irs to enhance its electronic Records Management. These recommendations include, implementation of enterprise email solution that enables the irs to effectively organize and retain emails. Develop an accurate list of executives and ensure that their emails are archived. Enhance processes related to retention of records for separated employees. And ensure that foia policy is followed by all employees responding to requests. As Ranking Member lewis mentioned, the irs agreed with all five of our recommendations, and is taking action. Well continue to monitor the progress of the irs in enhancing its electronic Records Management. P in conclusion, given that the irs expects taxpayers to retain records for years in support of their tax returns, irss ability to do the same is essential to maintaining public trust. Mr. Chairman, and Ranking Member lewis, that ends my statement and i look forward to all of your questions. Thank you, mr. Tribiano. Youre recognized. Good morning, chairman buchanan, Ranking Member lewis and members of the subcommittee. My name is jeff tribiano, and i appreciate this opportunity to testify today. In my position at the irs, i oversee internal operations. Which includes Information Technology, Human Capital, finance, privacy, procurement, planning, facilities, security, enterprise risk and the office of Equity Diversity and inclusion. Joining me today from the irs at the witness table is mr. Edward killen, the irs chief privacy officer. Over the years, the irs has worked closely with the National Archives and Records Administration to improve our processes and protocols in regard to retention of federal records to make sure they are appropriate and work properly. Recently we have made several significant investments in an important progress on a number of fronts to improve our Records Management practices for email, and to update our existing management policies, procedures and practices. Our work still continues in this area. In particular, we are well on our way to completing the implementation of an enterprisewide solution of preservation of electronic records for the agency. This will bring us into compliance with the office of management and budget director requiring all federal agencies to have email in an electronically accessible format. More broadly were also taking a number of other actions to improve Records Management. These include the following. We have updated policy and procedure guidance on electronic messages, usage and preservation. This includes guidance on the preservations of instant messages. We have enhanced our clearance procedures for employees who leave the irs, so we can identify and preserve federal records on separating employees before the employee departs. We are in the process of upgrading our ediscovery capability to a more than cloudbased set of tools. This will allow more quickly and efficiently for us to meet our discovery obligations in relation to litigation or governmental investigations. In the area of training, we recently released the first annual records mandy tore briefing for all managers. Regarding the freedom of information act, were upgrading the software used for the daytoday management of foia. Although the irs already responds to more than 75 of foia requests within 20 days, this new system will facilitate an automation and improve our effectiveness and efficiency in this area. Taken together, we believe these efforts to improve electronic Records Management are an important step forward. They are not ong bringing the irs into compliance with the nara standards, but will also greatly enhance our ability to timely respond to congress, the courts, and foia requests. We also appreciate the treasury Inspector General for Tax Administrations recent review in our records retention policies and procedures. We agree with all five recommendations in the report and we believe they are helpful in our efforts to improve in this area. We have already made significant progress towards completing action on the recommendations, and have implemented two of them, and we are on track to complete all of them by the end of this year. That concludes my Opening Statement and im happy to answer any questions. Thank you. And thank you for your excellent testimony. Well now proceed to the questionandanswer session. I would like to hold my questions until the end. I now recognize the gentleman from arizona, mr. Schweikert. Thank you, mr. Chairman. I have a handful of things here. I first want to get my head around a couple of things i was seeing in the notes here. Was there an attempt at an enterprise solution that, shall we say failed . Yes, sir. Why did it fail . Back in 2015, we identified and procured a hybrid cloudbased solution to implement the nara requirements. There is a procurement protest on the procurement that we issued. Gao upheld the procurement, so all work on the program had to stop. We had to go to our plan b, which was an onpremise based solution for the implementation, and that caused the delay in the project. Okay. So you were doing an enterprise cloudbased automated capture backup system . We were or thats what that was one, and a procurement protest that stopped you from adoption . Yes, sir. Gao upheld the protest. So you didnt rebid it . We went out to a different solution and rebid the second solution. The second solution was inhouse onpremise solution. Now youre doing an onpremise solution. Onpremise solution . It will be fully automated that will sweep the im seeing a number in here, what was it, 33,000 hard drives if i were to count everything that is floating out around there, will automatically back up and capture . All of our electronic emails will be backed up and captured, yes, sir. Direct messaging systems . The instant messaging system. But theres a piece of that. Instant messaging according to our policy, mr. Killen can explain this in more detail, but its not supposed to be used to for a formalized record. If it is, then that has to be copied into the system and stored. But if it is used, someone has to make that decision to save it . Yes, congressman, that is correct. So you and i are working on something, and we decide were going to use the direct messaging system, is that how you referred to your system instead of instant . Instant messaging. I have to actually, as the employee, make a decision, saying, oh, i need to hit the button for this one to be retained . That is correct. We refer to that as an Office Communicator system. And the employee would have to if a record is created, and weve been very clear in the irs about disseminating this guidance, but if a record is created, the employee does have the affirmative obligation to save that record. Wouldnt it be better to do a constant capture model . I think part of the context around sort of the instant messaging is that we found that its a tool that is effective for collaborative dialogue, as our employees are working various issues. So i think part of the challenge is that most of the information associated with those instant messages would really essentially be transitory. They would not be authoritative records. So youre basically asking an employee to say, this is appropriate for retention, this isnt . I see a human factor that creates a level of fragility. I know we all have certain concerns of privacy, and those things, but its still a government document, even if its transitory. Im just surprised you havent designed an automatic capture, you know, in todays price of storage, just capture everything. And just, you know, build search tools that are more robust, that may be easier in your life. This is your area of expertise. Ive been asked just because and i only know a tiny bit of it. So youre going to have to educate me here. Talk to me about the Security Summit with some of our, shall we say folks in the private sector and what were learning from their technology and what we can learn to adopt. I appreciate that question. The Security Summit has been a Great Success story within irs. As you know, one of our challenges has been addressing Identity Theft. And working to protect taxpayers from that crime. And so a couple of years ago the irs commissioner decided that this would really be an opportunity for a Public Private Sector Partnership to Work Together with our with the state department of revenue, and also with the private sector tax return community, in order to defend ourselves holistically against this threat. We really refer to it as the tax ecosyst ecosystem. One of the things that weve found, certainly, is where there are weaknesses in any of those links on the chain, it actually impacts others. We decided it would be great if we could all Work Together to try to share lead information, Threat Detection sort of information, in an effort to protect taxpayers. And so over the past couple of years, this has been tremendously successful. We have to remain vigilant. But i am announcing later on in the day the past two years weve seen a reduction in our Identity Theft inventory of over 60 . Thats in large part attributable to those efforts along with others as well. Mr. Chairman, in the second round, thank you for your patience. I now recognize the Ranking Member from georgia, mr. Lewis. Thank you, mr. Chairman. Mr. Deputy commissioner, has the irs received additional funding to implement the fia recommendation . Do you get more money . No, sir. The last increase that we had in this area, to be able to implement, and were really appreciative for, is 90 million that congress appropriated specifically for Identity Theft, cybersecurity, and Customer Service at our call centers. How have the irs budget reductions impacted your operation . What more could you have done, or accomplished with more money . Appreciate that question. The our infrastructure in the irs is very unique. Its large, its complex. If you step back and look at all the stuff that happens within that infrastructure, we process over 200 million electronic returns a year, within the irs infrastructure. We have two data centers that operate on a 24hour, 7dayaweek basis. We have over 187 million taxpayer accounts on the system. We collect and process all the records for 3 trillion in tax revenue. We process and release about 400 billion a year in refunds through this system. We have, if you look at it from all the things that we support, we have one of the Worlds Largest audit and collection firms that we have to support with 14,000 revenue agents and revenue officers. We have one of the largest law firms that have unique requirements within the irs that we have to support from an i. T. Perspective. We also have and operate a Large Call Center that handles about 64 million calls a year. That comes out of our i. T. We also have a large criminal Investigation Force that has unique i. T. Requirements that we have to support. We have also process, received, and digitalized over 80 million paper records that come in with tax returns and correspondence, within the i. T. Infrastructure. So all of that, all of that work is what we protect every year for Filing Season. And when we have reduced funds, we have to then reallocate resources to the areas within that system that we believe needed just to maintain Filing Season. What that does is it causes us to shift funds out of Development Projects that were working on, or other areas within the system itself to be able to fund the Filing Season systems. And what i would really like to do at some point is bring up my cio and maybe meet with the staffs, or any members of the committee, and go through the complexities of the i. T. System. Now, ill give you a few statistics on why its important. We have over 400 tailored applications in support of our lines of business. We have over 2,000 individual products working across servers and main frames. We have over 14,000 physical and virtual servers that run the irs. We have over 7, 700 data bases that support the main frame environments and support over 82,000 desktops and laptops throughout the agency. Anytime we have to shift funds because we have a lack of them to true up our Filing Season systems, it makes the other systems more vulnerable, more down time, for longer times of repair. We have to shift technical experts around. We have a gapping in some of our Technical Expertise within i. T. So we have to shift physical resources to the systems for Filing Season, which takes them offline for development, and production of new systems, or upgrades. So it has an impact on our ability to operate. Mr. Assistant Inspector General, what is your reaction to what has just been stated . I dont understand how you can continue to function, the agency being cut by more than 1 billion during the past few years. Certainly in the Information Technology area, theyve had turnover, theyve had a reduction in staff and theyre thin in a lot of areas with expertise. And there are a large number of people, like 40 of the people there can retire by 2019. So they do have a Human Capital challenge within the Information Technology. The topic at this hearing i think is a combination of systems, processes, and training of people involved in this. So money is one tafactor, and t human beings trained to follow up to make sure in this case records are retained and preserved in the way theyre supposed to be. Thank you very much. Thank you for being here. Thank you three for your testimony. I yield back. Mrs. Walorski . The bpas cover a wide range of supplies and services but generally designed to streamline the procurement process by functioning sort of a charge account with trusted suppliers. One such service covered under bpas is a service that we touched on, solutions, a fancy term for things like email, calendar, contacts, collaboration services, such as instant messenger and retention requirements, archiving and searchability. This particular bpa allows an agency to pick from a range of services from 14 different companies. To make it easier, the gsa breaks down the service sboos this handy grid to make it easy to see whats being offered and by whom. Correct . Yes, maam. Okay. However, the tigta report on the irss failed acquisition of an enterprise email system showed that despite going through the bpa process, the irs purchased items that werent on the bpa. They purchased something with a similar name as the one on the bpa list, but it was a different product. A Company Successfully challenged the purchase with the gao and irs had to abandon the contacts and start over. Taxpayers spent 12 million on software that was never used. Mr. Tribiano, can you walk us through how Something Like this happens and what youre going to do to prevent it from happening again . Basically what it boils down to is you picked from something not on the list, taxpayers get stuck with the 12 million bill and that isnt used. What safeguards are put in place to say, we made a mistake, and well never do this again. Because the people in my district said 12 million is a lot of money especially for something not used sitting on a shelf. What safeguards are in place now that werent before . Yes, maam. The at the time that that was dop, it was my understanding there was an assessment done on the blanket Purchase Agreement, and the products we were going to purchase off the blanket Purchase Agreement was within the range of products that were being offered. It was only when the protest happened the lawsuit . When the gao came back and basically said you purchased something thats not on this list . I dont remember, or read the language what gao said. I know gao came back to us and said were upholding the protest that was filed by a vendor. When that happened we turned to what our plan b would be, which would be the onpremise solution. We went out and contracted for that. So the safeguards that are in place, we have a mechanism now within our Procurement Office that has a process has a policy and process in place that has a secondary view of any schedule that we go to on blanket Purchase Agreement that allows us to have the secondary signoff. Have they caught anything, this new group . Have they been able to catch those same kinds of actions . Have they been the watch guard to make sure this doesnt happen again . I think its been successful. I have not seen anything, and when i talked with the chief officer, i havent seen anything that would stand out as a large item that went through, or was stopped. But im being briefed that its a successful process, and that a process that happened like that in the past should not happen again within the irs. I appreciate it. And then mr. Kutz, do you believe these actions are sufficient, these safeguards, that they will be the net that catches this kind of crossconfusion, and especially to the tune of 12 million just with one action alone . We and gao concluded that the blanket Purchase Agreement, the Cloud Solution was outside of the Purchase Agreement. We and gao both believe that at this point. Well see. Theyre supposed to have their new email solution done by the end of this fiscal year. Theyll be doing work to follow up on that, and determine whether its implemented effectively. I appreciate it. Thank you, mr. Chairman. I yield back. Miss delbene, youre recognized. Thank you, mr. Chairman. Thank you all for being here with us this morning. Mr. Kutz, in your testimony, you state that there are many security measures in place for documents that are pictured in the photographs attached at the end of your report and the vast majority of the items in the photographs were the replacement of aged equipment. I wonder if you could talk to us about the reasons why an electronic storage option wasnt used. If youre phasing out old equipment, really the question is, why not store documents in the cloud, or in some other electronic format that could be searched and secured . Well, the email solution does not automatically archive. So they have been saving. I mentioned theyre changing policies in my Opening Statement. The policy has resulted in the Old Technology and hard drives and other things being at all these locations is that theyre saving it now. Because theres potentially federal records on that information. So i think we have an issue here, were all talking about Going Forward. Once irs has processes to go toward, then we have to deal with the going backward. Theyve got tens of thousands of these devices at 50some locations across the country that theyre going to have to be dealt with at some point. Some of them they may be able to find records in. In other ones, the hard drive may not be matched to the person. I think today when we talk about the solutions, theres the Going Forward solution, and the congress will have to work with the irs what to do with the devices stored around the country that potentially have records that shouldnt necessarily be destroyed. And right now, theyd be kind of just kept in printed form . Its growing. Theyre still keeping more and more items. With the email solution Going Forward, that should help to some extent. Right now, the policy backup tapes being kept indefinitely. I think if we can fix the problems Going Forward, the question is, what do we do looking backward to eventually destroy this information . Its a storage problem. Theres large rooms filled with old equipment and hard drives and old laptop shells that are going to be there indefinitely until a solution is determined. Old systems that people may not be able to access over time, is that thats a separate issue, Old Technology with they have the hardware age and systems that theyre trying to upgrade and modernize also. I also wondered if any of you could elaborate a bit on the role that hr and i. T. Play in retaining electronic records. Theres a lot of talk about employees printing records out and keeping them. But how are decisions made to ensure that Important Information is backed up on a hard drive, and what are you doing to make sure its not just maintained on a hard drive . Because thats also, if theres a crash or anything, you lose all of that information. So whats being done there . Thank you for the question. One of the opportunities that we have as we are moving forward with our new email solution is indeed to move away from that reliance, from that historical reliance on hard drives and people saving things on their local machines. Because that is not an on tptim way to save records. The good news is that the process that we are currently implementing to move to our new email system will address a significant, significant aspect of that challenge. Because the emails and that is predominantly in most of these sort of instances where authoritative records would lie. The email record would be in the server. There are requirements around what constitutes an appropriate electronic Record Keeping system. That will ensure that we are actively able to search, produce records as appropriate. As we move away and one of the benefits of this is we will no longer need the utilization of the hard drives, because it has been previously a storage issue, which is why people youre talking about email. What about other documents . Arent there documents outside of email that you would also want to make sure are backed up . Yes, maam, thats a fair question as well. It really is a combination of tools that will move us into a better direction. Its the policies associated with, informing people that you should not be storing federal records on your hard drives. Because theres limited access to that. Were moving to collaborative sites where share point sites, those sort of things where records should be and can be held where well not have the storage limitations. So that people have a place to put those records. Email, the email solution we think will address a large segment of it. Because if you sort of think about it from a practical standpoint, a record is of limited utility if youre the only one who has access to it. Most records created are actually shared or disseminated somewhere. So we think the email solution will help some of that. And for the remaining issues that we have, were formulating a plan to address that, to ensure that we have no gaps when were done with this process, because we do want to get it right. Thank you. I yield back. Mr. Holding . Youre recognized. Thank you, mr. Chairman. Mr. Killen, how many executives are at the irs . We have 251 scs executives. We have around seven senior leaders. We still have two members on that will be expiring shortly on the streamline critical pay. These are the individuals, which for lack of a term of art, are the critical Decision Makers of the irs, is that how you describe the executives at the irs . Yes. I think as weve pointed out, tigda reported theres independent verification that confirm the email accounts of these executives are configured in archived emails, so that was a finding. And youre testifying today that changes have been made, so are you able to say today that the emails from those number of executives are being archived today, and if not, what steps are you taking to ensure that they are being archived. What im able to say today, sir, is that we are actively implementing the solution that should address that. When i say that were actively implementing it, its meaning that were currently in flight, in migrating all of our irs employees into the new email environment, where all of their emails will be saved and archived appropriately. Excuse me, mr. Killen, is your mic on . The light is on, yes. Okay. We are actively migrating to that new email environment. When i say active, meaning we have literally moved over already tens of thousands of irs employees into the new environment. We think that for the most part, all of our executives have migrated over. And thats important, because the root cause of the finding where some of our executive emails were not configured properly was a part of an interim solution that we put in place, as a stop gap measure on the path to our permanent solution, which were executing against. The important thing about that is, that was a manual process. It depended upon people to configure their email boxes so the new platform that youre migrating to will not be a manual process, it will be an auto archive, you wont have to switch it on or off . Thats correct, sir, it will be automatic and systemic. Which one of you would be able to address the question of what forms of predictive Statistical Analysis is the irs using to combat fraud, abuse, so forth . I cannot speak to that, nor can mr. Killen. Most Financial Institutions, when theyre looking for fraud, money laundering, compromised accounts, i mean, they use forms of predictive Statistical Analysis that runs all their data through it. And thats the reason why you get the call from your bank that says, you know, did you just charge this on your credit card . It sets off red flags. One would assume that the irs uses something similar to what Financial Institutions would use to find that. I would say that they do. I think they have a lot of filters in place to prevent refunds from going out improperly. If so, that would be similar, i think, to what youre talking about, where Credit Card Companies see indicators in the data to call you, to prevent you from making a transaction. They do try to filter up front looking for fraud indicators. They have quite a bit of over 100 of those types of filters. Thank you. If that was where that question the Statistical Analysis is late bit different as well. The analysis of all the data that you have. The are you aware of in a software, that the irs buys from outside vendors, that provides these services, and can you relate as to whether its been effective for the irs . Do you use it . If you do buy it . We do purchase outside software to help with some of our analysis work. And when we talk about return filing, we have a robust system of filters to stop antifraud. We also have a team of researchers within the irs that do research, apply analytics analysis type of work, and statistics work that can predict and show patterns that are happening. I just cant speak to what theyre using and how they actually do that work. That falls underneath another group that im just not thank you. Mr. Chairman, i yield back. Mr. Curbelo . Mr. Chairman, thank you very much for this hearing. This hearing focuses on an issue that i think many of our constituents are concerned about. Which is government competence. And last week we had, i think, a similar hearing on medicare fraud. I got a lot of questions back home from floridians who wonder why if Credit Card Companies can be so effective at preventing fraud, why the government seems to be more focused on chasing fraud. Well, here were exploring a similar issue, whether the government can be competent, can be trusted, whether we can help restore the trust and confidence in our government. And in our institutions. One of the issues that the report were discussing raises is the inability of pgld to compel Business Units to respond to requests for records, and to document their search efforts. Mr. Killen, is that still the case today . We are working aggressively to improve our freedom of information act request process. I would note that on the whole, i think we do a good job of that. And we have 80 timeliness in responding to the foia request that we received. One of the important as expects of foia is that you do rely on the custodian who has the record in order to be able to produce those records. So what we are doing is we are revising our communication mechanisms, were revising our search memorandums to make it very clear what the responsibility of the custodian is, and performing an adequate search for those records. Were revising our training. We are revising our quality our internal quality review process to ensure that we have a quality process, to ensure the efficacy of the search. So were taking a variety of investments and additional tools to help us locate responsive documents. So this is really an area where weve been intensely focused, because document retention and production are intrinsically linked. You have to have both working in concert in order to be successful. Weve got certainly work to do and were committed to refining that, and making improvements where needed. So we appreciate the perspective of the ig in identifying areas that we can improve upon and we embrace that. So this is an area that were focused on. We feel like on the whole, we do a good job. But we certainly have opportunities for improvement. And so were focused on that. So youre confident that at the end of this process that youre undertaking, you will be able to effectively compel the agency to conduct these searches and to document them . I am certainly confident that at the end of this process, we two things, first of all, well be in materially a better place than we have been historically. And secondly, im confident that we should be able to improve the process that we currently have. And that is what were focused on. And i do think that well be in a better place. When you look at some of the things that really routinely cause us challenges and complications, and mr. Lewis spoke to it, it really is those very complicated requests we get, complicated by virtue of the fact that the responsive documents could be hundreds, or thousands, or tens of thousands in some instances of pages. And so the additional investments and our new Record Keeping system and our new foiia discovery tools should put us in a better place. But it is an area that we will have to remain vigilant, because it is complicated and nuanced. But we are squarely focused on making improvements. We realize taxpayers have a right to request information from their government and were committed to be able to provide that information. Thank you. Thank you, mr. Killen. Mr. Tribiano, in the time we have left, what is the agency doing cooperate to get the desired results . Well, two of the things that ed mentioned was the actual training thats happening right now and the ability of our new efoia, ediscovery systems. Once we get our new email Electronic System in place so we can search emails and have the ability to search the email information quickly, the other is to have the tools to go out and redact whatever needs to be redacted and produce the documents to go forward. Were putting in place the policies that wrap around that to make sure that the information is flowing forward. And were able to access all the records and get them through the process and get them to, if its a foia request, get it to whoever requested it, whether its a legal aspect, getting them to our attorneys to go out. Thank you, mr. Chairman, i yield back. Mr. Kutz, let me ask you, there are a lot of good findings and recommendations in the report. In everything that you presented today, what are the top one or two steps that the irs is yet to complete that are critical to beginning the irs in terms of compliance . I would say the electronic the new email system. Theyre starting to roll it out now. Having that done as quickly as possible, takes some of the Human Element out of it. It relies on printing paper or saving to a hard drive or something, if you take that out of it, youre going to have a higher level of compliance. I think once we get to the point of Going Forward, something has to be done about going backward, and the tens of thousands of devices across the country and all of the storage of that, what youre going to do to deal with that. Its costly for them to keep it like it is now. So some solution to that, perhaps working with congress on that, is going to be critical. In terms of working with congress, do you have any suggestions or things we could do more to be more helpful . Today is a great example. I think your oversight on this as a bipartisan basis is very important and holding irs accountable for making sure that they follow through on the actions that they say theyre going to take. Certainly with respect to the email system, follow up to see that they get it done at the end of the fiscal year. Were going to work in the future to report back to you and the irs on the actual implementation of that email system. Thats what we have planned for fiscal 2018. Well do the trust but verify with you. Mr. Tribiano, you touched on you mentioned emails, questions have been brought up. This concept of the future state initiative. Where are you at in terms of that process as it relates to emails . Thank you, mr. Chairman. We are on schedule to have the new email onpremise solution that backs up electronically all the emails from all the irs employees, taking the Human Element out of it. Were scheduled to have that completed by the end of september. We have an end of probably another 30 days after that for some work that has to happen in order to take the old email system offline, and have everything over there. But what were going to do beyond that, before our partners at tigda come in and look at what were doing, is were going to have two independent verifications and validations done. One, were going to go out while were in flight in the month of october and ask mighter, a federally funded research and Development Team to come in and take a look at where were at and make sure we met the requirements. And then well ask nara to come over and make sure weve met all the nara requirements so we can be confident that everythings backed up, everythings moved over, everythings where its supposed to be. And then i know our partners at tigda will come in after that and offer their opinion about or suggestions about anything else we can do to improve that. Now, thats just the future state of where were going with the emails. One of the issues, and my colleague brought it up, is all the hard drives that we currently have stored. And what are we going to do with those. I tell you, the majority of those hard drives are refreshers, meaning we purchase a new laptop, so we copied everything off of one hard drive onto the new hard drive, but we didnt destroy the old hard drive because we are, i would say my words, nervous about doing anything thats going to remove any piece of Digital Information until were sure that we have the new solution in place. Then well go through a systematic process to remove the hard drives that were just in laptops, that were just refreshers in the process, get our Disaster Recovery tapes back into the cycle of copying over, which is what theyre supposed to be doing. Let me touch on one point. You thought you would have it in place by the end of september. Were almost in august, in two months. This is a future initiative. That seems like a lot of work in two months. Weve been working on it, sir, since when we initiated the secondary, the plan b procurement for the onpremise solution. We did that in september of last year. We started the implementation process and testing of it in january. The first people that started moving over, the first migration started in march. We worked through it systematically to make sure we worked out the kinks on how employees would be moved over. Weve been in flight in that process. And we have a committed team of professionals working on it. And we will have it done by the end of september of this year. Great. Thats nice. Because i know they talked about september, actually hit the targets around here is pretty tough. Good for you guys. Mr. Schweikert, do you have another question . Thank you, mr. Chairman. I was hoping just because i have the talent here, to go just a couple side questions that ive always been somewhat curious about. Youre a taxpayer. Your records burn up. Something horrible happens. Like my house right now with the monsoon leaking through my house. So i turn to the irs and say, hey, can i get copies of my last seven years of records . Tell me the process. Sir, im not sure exactly how that would happen. There is a process that taxpayers can go through in order to receive information and get past records. Theres information out there, to get transcripts in other forms. Where im going with this is, many of us have great interest in highly secure methodologies where i could actually use this to be able to access everything, from my College Transcripts to my irs records to my vaccination records, those things. And look, youre all very smart. Youve all probably been tracking, you know, the double pass systems in regards to a distributive ledger. My understanding is even with just the number of servers, you have throughout the irs community, you could actually build your own node network, and then build a world where, you know, nst, you know, about ten days ago published an encryption agreement, or document saying, i can carry my medical records on this, and heres the type of encryption they would believe would be safe and uniform and could be commonly adopted across platforms. The ability that, you know, have the biometric in a password. Can you imagine a world where myself as a taxpayer, i could log in with my thumbprint, my pass code, see my quarterly payments, see my irs records, see my documentation, see how they relate to all my filings, and would that also change just even the paperwork load you have, when im getting a loan, and i have to document because im an independent contractor, so i have to have them have the irs document my last couple years worth of income. What type of visioning is going on at the agency to understand this world of technology thats out there that could make all of our lives much more efficient, much more elegant . Where are you going with it . Thats a great question. And i know you guys have been in discussions with the irs about the irs future state about where we believe the irs should go. And its very similar to what you described. Its offering the ability for taxpayers to proactively interact with the irs digitally, if thats their choice of medium. We still have to offer walkin centers, call centers for those who want to communicate in different means. But the majority of the public says they want to be able to work with the irs digitally, like they would with a bank or youre already doing the project. This ties into the discussion for the Security Summit. If i use one of the package soft wears on the turbo taxes, whatever it may be, i can log in and see all my filings ive done through them going back several years, correct . So in some ways, we already know its being done on the private side of the ledger, it would be an interesting elegance from the Security Summit and then the concepts that if were truly almost to a National Standard for encryption, using a distributive ledger, and the fact that you have servers all up and down the chain, you could also become one of the great node networks and control it. Everything that you described is always doable. The concern that we always that i would bring up from my side of the house, not from the service and enforcement, from my side, the infrastructure. As we transition to whatever that future state looks like, however were going to interact with the taxpayers, however were going to do that work, i still have to deliver successful Filing Season in the current state. Thats what we talk about for the things that could be done to help us. Its to true up our current state of systems to protect the current Filing Season as we do the development towards that future. Mr. Chairman, Ranking Member, where this thought moves through my mind is if were truly going to deliver a tax reform thats much more elegant and simple, also at the same time delivering a methodology where american taxpayers have a more elegant way to use their base technology, to see their relationship, see their filing, see their history. Its sort of a unified theory of simplicity and technology. With that, i yield back, mr. Chairman. Thank you. And let me just close on one other thought. Because obviously all of you have been in this space for a long time. Our goal as a committee on a bipartisan basis is to try to produce a bill, irs reform, by tax filing day next year. Maybe its ambitious, but thats our goal. We would like to get your best thoughts and ideas as we move towards that. Its been 20 years. We want to try to be helpful in terms of the agency being more productive and effective long term. So thats the idea of a lot of these haerks. Well be doing more of them. Any thoughts or ideas youd like towards that. I like to talk about the future state, because my mindset, being in business for a long time, im very big on planning and thinking about where we need to be in the next 10, 20 years, or 5 or 10 years down the road. I would like to thank our witnesses for appearing before us today. Please be advised members have two weeks to submit written questions to be answered later in writing. Those questions and your answers will be made part of the formal hearing record. With that, the subcommittee stands adjourned. Thank you, mr. Chairman. Thank you. In congress this week, the house takes up nearly 800 billion in defense related spending for the next fiscal year. The senate works on repealing parts of the Affordable Care act. Watch anytime on cspan. Org and listen with the free cspan radio app. Justice department of officials in the Trump Administration testify at a Senate Judiciary Committee Hearing on Foreign Agent registration requirements. Live coverage wednesday starts at 10 00 a. M. Eastern here on cspan3. In the afternoon, a house panel looks at the u. S. Qatar relationship in light of a recent blockade by gulf states. Live coverage starts at 2 00 p. M. Eastern, also on cspan3. Watch both hearings online at cspan. Org or listen with the cspan radio app. Sunday night on afterwards, Connecticut Congress won rosa delaura talks about her book, the least among us, waging the battle for the vulnerable. When Social Security reached its lowest point, we had ronald reagan, and tip oneil. Who came together and acted, and the congress acted, to make Social Security solvent into the future. All of this wringing of hands about Social Security, and being insolvent, can be solved immediately by lifting the cap. Watch after words sunday night at 9 00 eastern on cspan2s book tv. An update on the National Public Safety Network for first Public Safety network for first responders. Captions Copyright National cable satellite corp. 2008