Transcripts For CSPAN3 IRS 20240705

On many essential attributes of a plan. It would be extremely challenging too used to document as a document to hold the iris, the Treasury Department, or anybody else accountable for missteps. The few things it almost entirely lax are quantitative targets to measure against, backup data to analyze, and various key operational details including, for example, who at the irs or Treasury Department is ultimately responsible for making decisions on any particular issue. This does not give any detail on how the irs will implement secretary yellens 400,000 dollar pledge. And details really matter here. It also does not estimate what any of the 42 initiatives or 190 odd key projects are expected to cost or clearly answer the basic question of which initiative or key projects can be fully implemented with the 80 billion dollars in funding. What the document quietly admits is astonishing. Despite contrary rhetoric, the irate did not give the irs enough funding to fully realize the plans division. This, despite having given the agency a slug of funding more than six times its annual budget. The irs is annual budget justification goes for, theyre asking for 15 increases in the irs is discretionary appropriations to make up the short term for areas where the i. R. A. Funding for short, particularly in tax Player Services and i. T. Monetization. The irs annual budget justification also warns that if Congress Fails to increase future irs discretionary budgets on top of the 80 billion, and in particular spend even more for Taxpayer Services and i tomorrow night is a shun. The irss future Service Delivery will actually suffer. Finally, the president s budget requests still more irs funding for future enforcement efforts. 29. 1 billion dollars more. That is on top of the 80 billion dollars. Americans rightly have a hard time understanding how an agency provided more than six times its annual funding can still claim poverty. Given that the plan the irs delivered is not transparent and does not allow for any meaningful accountability, this plea is essentially for another blank check. Ive heard some argue that future uncertainty prevents the iris from making firm estimates beyond a fiscal year or two. Indeed, that sounds like a tacit admission that circumventing the new appropriations process for the 80 billion dollars was a huge spent first plan later mistake. But this uncertainty excuse falls completely flat when one observes the countless other examples of long term budget revenue and cost eliminating both in the public and private sectors. When you last testified before us you promised to write really update the irss spending plan and solicit this committees feedback. Based upon what has just been delivered, i strongly suggest you accelerate your timeline and return to this committee in short order with an actual plan. Returning to the subject of this hearing. My colleagues and i eagerly await discussing the irises and you will discretionary budget request and current performance measures. Ive learned more in the last few weeks about the sometimes puzzling ways the irs measures its own effectiveness, such as on entering phones. What i have learned would be more troubling, if not for the hope that you will adhere to your promise to enhance the rigor and meaningfulness of the irss Data Collection and analysis. I recognize that you are only a few weeks into your tenure. And are already facing momentous decisions that will likely have lasting consequences. I was encouraged by your commitments, which include full and prompt transparency. Utilizing best management practices, making decisions based on sound and unbiased data. Ensuring the irs is strictly nonpartisan, not making any policy decisions that are congresses responsibility. And turning to congress at every possible opportunity for guidance and authorization. How will you adhere to these promises will it determine the legacy you leave the irs in the american tax pitchers as well as you relationship of congress. I urge you to walk the street course and set up positive trajectory. And above all, keep the irs out of the partisan gamesmanship. Thank, you mister chairman thank my colleague and as my colleagues all, know we will have further briefings this week on the Strategic Operating plan by mr. Werfel, we appreciate that. Our witness today is daniel werfel, 50th commissioner of the 1y irs. He has previously amended drink partner at the Boston Consulting Group before it joining the boston its nominate to be controller of the office of management and budget where he served for four years before becoming acting commissioner of the irs in 2013. He began his career at omb in 1997, we welcome. Him why dont you go ahead mr. Werfel and will have questions. Chairman wyden, Ranking Member crapo and members of the committee, thank you for the opportunity to testify on the Filing Season and the irs budget. I am pleased to report that the irs provided substantially Better Service to taxpayers during the 2023 Filing Season. We delivered a strong tax season for the nation. The best in several years. Through april 7th, the irs received more than 101 million individual federal returns and issued more than 69 million refunds. Totaling about 199 billion dollars. Irs employees were able to make substantial improvements this tax season because of the Funding Congress provided to the Inflation Reduction Act. This funding made a difference. It allowed us to hire more than 5000 phone a sisters which led to a phone Level Service averaging 87 during the Filing Season. The average wait time on the phones was four minutes. This is a major improvement from last year. One Service Levels were under 15 and wait times average 27 minutes. Perhaps most telling was this, irs employees answered 6. 5 million calls to help taxpayers, that is 2. 5 million more calls than last year. And improvements were seen in other areas, we increased face to face visits at our Taxpayer Assistance Centers to 474,000. That is up more than 30 from the year before. We expanded digital scanning efforts to speed up the processing of paper returns. Providing a better Filing Season experience this year was an important step but more work remains. The long term funding from the Inflation Reduction Act gives us a unique opportunity to transform our agency over the next decade. Historically, the irs receives funding that allows our staffing and operations to keep pace with the size of the u. S. Population. In 2010, that changed. Cuts in annual funding caused iris Staffing Levels to decline by nearly 17 to less than 80,000 fulltime employees by 2022. While the irs shrank, the u. S. Population grew by more than 7 . Reaching 334 million. These reductions caught up with us. You could see that in the poor taxpayer Service Levels in previous years, including last year. We were able to improve this Filing Season by shifting Inflation Reduction Act funds over to our day to day operations. If we continue using Inflation Reduction Act funding this way, however, focused on short term operations, rather than long term systemic improvements, we will not be able to transform the taxpayer experience, modernize outdated Iris Technology and deliver more effective enforcement of the tax laws as the Inflation Reduction Act in visions. The i. R. A. Funding was designed to restore irs core operations and prepare the agency to serve the nation and its future. But that work is outside of our base level funding. That level of funding, which is 12. 3 billion dollars for fiscal year 2023, has not materially increased since the fiscal year 2010, in fact, in real terms, we are 33 below our funding level and fiscal year 2010 if we had just received inflationary in just minutes. It is not enough resources to fund a tax system in an economy that grows in size and complexity every year. So i ask for your help to build on the remarkable progress we saw this Filing Season by supporting the 1. 8 billion dollars in incremental discretionary funding requested for fiscal year 2024. This funding will enable us to maintain our current performance in the next Filing Season, while allowing us to use the Inflation Reduction Act resources as congress intended, to modernize our operations so that we can sustain and improve our service to taxpayers into the future oceanic operating plan lays out in detail our path forward, describing how we will improve all aspects of our operations. The plan, which i call our public to do list, lays out roughly 200 projects from improvements for taxpayers, Tax Professionals and irs employees that will transform our work on the phones, in person and online. Inflation reduction act funding also gives us an important opportunity to improve enforcement efforts to promote fairness while respecting taxpayer rights, the agency will follow secretary yellens directive, not to raise audit rates above historical levels for Small Businesses and households making less than 400,000. I want to be crystal clear, we are not increasing audit rates for hard working taxpayers making under 400,000. That is my pledge, there is no surge of new audits coming for workers retirees and others. We have plenty of other areas we need to focus on. Instead, we will build capacity to pursue high income and high wealth individuals, complex partnerships and large corporations that are not paying the taxes that they owe. We will use Inflation Reduction Act resources to hire highly skilled employees to address noncompliance among this group of taxpayers. I plan to provide regular updates to congress in the public on our efforts to transform the irs and i would be happy to delve deeper into the details with committee members. For example, i will provide a supplemental document that provides in one place extensive details on planned expenditures over a tenyear period and on hiring over a threeyear period. Within the next 3 to 6 weeks, i will be able to add more detail, showing expected hiring across the full tenyear window. I am optimistic that we can build on the accomplishments of this Filing Season. The question is not whether the irs can improve service to taxpayers, this year we proved that dramatic improvement is possible. The question is whether we can continue to improve. I am confident that we continue this trajectory if we have adequate annual funding for daytoday operations coupled with the long term resources, combined, these will transform the irs over the long term and into an agency the taxpayers and the nation expect and deserve. Chairman wyden, Ranking Member crapo, and members of the committee, that concludes my statement. I would be happy to take your questions. Thank, you mr. Werfel, we know in this country, we have a tax gap of hundreds and hundreds of billions of dollars. This is money owed to the american taxpayer, but not collected. Your predecessor sat where you are this morning, not very long ago and he said the tax gap maybe as high as a trillion dollars a year. And he also said that you are not going to be able to collect those monies, deal with the tax gap unless you go after the very wealthy tax cheats. And that is because, and youve mentioned, this the workers who have wages and salaries, we already know essentially a lot about them with respect to the taxes owed. It is that wealthy tax cheats who can pretty much decide what they want to, pay when they want to pay it, they are the challenge. So my question is, a couple of weeks ago, the Senate Finance committee can leak pleaded a long investigation, finding that the big bank credits wes violated a plea deal with the department of justice where, again, you are seeing massive tax evasion by thousands of wealthy americans. Our Investigations Team uncovered an ongoing conspiracy in one instance involving a single familys failure to disclose 100 Million Dollars in secret offshore accounts. If that wasnt bad enough, the investigation found the credit sweeps in total concealed from u. S. Authorities, 23 large accounts worth more than 700 million. And this kind of flagrant abuse, flagrant attacks of asian highlights the point that you and i have been talking, about this ball game is all about going after these wealthy tax cheats. So my question to you is, commissioner how will they agencies, the irs use the funding you have got to step up enforcement to crack down, for example, on the use of secret offshore accounts. Something that is ongoing by wealthy americans. How are you going to use the funds to tackle that . Well, as i have said, mister chairman, the enforcement funds in the Inflation Reduction Act will be focused to improve capacity in these areas of reviewing the taxes of high wealthy individuals, large compressions complex partnerships. Its a place where weve been severely under resourced to take on and the Inflation Reduction Act provides muchneeded resources for us to finally build the capacities that we havent had. To your point, its critical to doing this to i. D. Certain patterns of activity where tax dodging is most rampant. And you point out, you know, offshore, youre not the only one to point that out. In a recent g. A. O. Report on the tax gap, and they i. D. d abusive tax shelters as an area where the irs has to do more. So our plan is to build capacity, and that means subject matter experts, specialized accountants, data scientists, lawyers, all of which understand how these things are set up and how it can help us navigate them and figure out where the funds are that should have been paid back to the nation that havent been. And so you will go after foreign banks like Credit Suisse and the reason i want to ask that question first is, Credit Suisse got busted almost a decade ago. For doing what we found they have continued to do, in other words, they came to the federal government, their ceo raised his right hand, promised 100 percent compliance and then all of the sudden, what we found is we are dealing with it all over again. So youve got recivet people who have ripped off the american taxpayer because it is those working class people that pay when the wealthy americans get out of their obligations. And i think it is very important that the American People hear that when you are talking about a recidivist, like Credit Suisse, who promised that they would stop doing it and then continue to do it, i think its important that we know those are the kinds of people that you are going to go after. Mister chairman, im prohibited from discussing individual taxpayer in a public setting im talking about the kind of action that i believe needs to be a priority. You dont need to go into specifics. I was going to say, lifting up absolutely the goal is to understand these patterns of behavior across these very complicated organizations. Because they are so complicated, large multinational corporations, complex partnerships, they have many divisions and subdivisions that are operating across different countries. They have different financial structures. It is a lot to unpack. My time has expired, and your last point, commissioner, is very much on point. You said the patterns are what is important. Credit suisse, the pattern was all there. Huge violations, huge violations. Entering an agreement with the government and then basically, after a little bit of time goes by, they do exactly the same thing. When you talk about patterns it is exactly the kind of issue that credit swiss presented because when they made the promises in 2014 they went back to ripping off american taxpayers. I want to start out with an issue that my colleague, senator wyden, raised in his introductory remarks where we do have other the irs should be the entity that prepares peoples taxes for them. Some want the irs to prepare tax returns for taxpayers and several colleagues have actually introduced legislation in congress to authorize the irs to do that. The i. R. A. Gave the irs 15 million to study such an outcome. That idea is concerning, not just because of the apparent bias in favor of doing so by those who were selected to conduct this study, but for a lot of other reasons. Having the irs act as tax prepare, Tax Collector and tax enforcer raises significant conflicts of interest in many of our minds. It would incur billions of dollars of cost and development and would expose exponentially more taxpayer information to misuse or abuse. The private industry, the private sector of this country already prepares and files free tax returns for tens of millions of americans. Millions more of americans are already eligible for that. The irss Strategic Plan has an entire admission of devoted to an irs run tax preparation program, which seems to me odd because this is still being studied right now. The question that i have for you, is how does the iris make the determination that is going to pursue this . And if so, where does the irs find its statutory authorization to do so, or the funding allocated and appropriated to do so . Senator, no decision has been made on moving forward with direct file solution. In large measure, because of the point you, raise the Inflation Reduction Act mandated that the irs produce a study for this committee and for congress on the feasibility of such a solution that it studies do in mid may. We are on track to complete the study. I want to jump ahead of the conclusion because the study is not done. Yet so were still working through and what we planter produce will hopefully create an important dialogue between the irs, the administration, and this committee on what the study says and whether it is feasible or not and what the various issues. Are you bracing questions, and hopefully the study will help us have a good dialogue on those questions. And we agree im glad to hear your answer that its not a predetermined outcome. Can we agree that the decision is one that congress can make, not the irs independently . Im not sure of where the legal authorities are. I would actually think its a good question to ask in the context of issuing the report. The report really focuses on operationally shortly what it would take to produce such a solution. Your question, terms of who has the legal authority, is something im not sure is within the scope of the report. Its clearly an important question to ask on any go forward. I would tell, you i encourage you to recognize that congress has the authority to make this determination. Let me move, on my time is running out. Senator wyden also ask you about the tax gap. Have you done an analysis . Has the irs done an indepth analysis you can show us as to where the tax gap lies . What im referring to is, Something Like what weve seen out of the joint Tax Committee that goes by income increment or cohort, where is the tax gap . Whether we can decide on the amount of tax, gap where is the tax gap . Among people who live in the United States who are taxpayers . We released our latest tax gap assessment in october of 2022. It covers used 2014 to 16, i dont think we have time to unpack all of the rich content in there, i will say that it does give us a good roadmap for where to assess where theres a difference between a balance owed in the balance paid. One of the things that is important to understand is we are constantly trying to improve the way we measure the tax gap. As i was answering chairman widens question, when we have better capacity to assess, for example, high income taxpayers individuals, large corporations and complex partnerships, we will learn more about how those financial structures are laid out, and we will be able to hone more detail in terms of what the tax gap is in those areas. Thank, you my times when, out i want to ask my last question. I was very interested in your, again, making the pledge that you will not increase taxes on those making audits on those making for less than 400,000. As you like we have gathered for my opening, statement im concerned that the Strategic Plan did nothing to flesh out the details of this. And i dont have time for you to get into it today, but we know even less about what the irs believes will happen to actual audit members for taxpayers making less than 400,000. And we did before. There is some kind of Historical Rate thats being referenced. There is a pledge now and a pledge from both secretary yellen and, you that we need to get details as exact as to how this pledge will be honored as we move forward. Sir, im prepared to provide additional details. Maybe an additional questions that are coming up, i know we have a Member Meeting with me tomorrow. Of course, i understand that there is a request for more details. I think the plan that was issued is robust, as you said it is dense. That answer every question . No. Thats because we want to work with you to figure out what the questions are that we need to answer to make sure that what we are doing is very clear in terms of how were gonna improve the irs. Thank you. Senator, cardin. Thank, you mister chairman. Director werfel, thank you for being here and congratulations on this tax season. You have triaged the irs in order to deal with the Necessary Services to taxpayers. And you have done it well. I appreciate the point that you make, and that is you need to have the ability now to invest for the future in regards to technology and workforce so that you can maintain that type of service level. One of my highest priorities for the iris is to recognize that it needs to be it needs to be able to answer questions. You need to be able to provide those services. I thank you for giving us the hope that we can in fact do that. In a more acceptable way. I want to first acknowledge that our chairman and Ranking Member have been very sensitive to the concerns of Small Businesses. I chair the Small Business committee and were going to have some joint efforts between this committee and the Small Business committee to deal with the challenges that Small Businesses are confronting in regards to our tax code. As you, know Small Businesses depend very much on the irs improving its Customer Services and improving its technology. It will help the investments you are talking about making, Small Businesses do not have the same type of tax literacy that Larger Companies half. They certainly dont have the personnel to deal with complexities in the tax code related to their business if they only have one or two employees and theyre trying to struggle with the challenges of a young, new entrepreneur. So i appreciate the discussion you have with the Ranking Member chairman in regards to direct filing and the study thats being done. I would encourage you to also include Small Businesses as to the impact it could have on our Small Business population on trying to simplify the way that they could comply with our tax codes. I just will point out that the Authority Issue is interesting because we dont have given new the authority you need to offer paid providers. One of the issues, particularly for low income families is, yes this free tax or vice available, but theres also pray providers that theyre paying for a not sure theyre getting value and all of the circumstances. Unfortunately, we dont have the accountability that is necessary here. I hope that your advice to us will be comprehensive, specifically on how we can deal with low income families and Small Companies in getting through our tax code more efficiently. And lastly, we urge you to give us areas that you believe tax code needs to be modified, as it relates to Small Companies. Because, again Small Companies are using the individual tax returns to deal with their small taxes and it is not as convenient as the Corporate Tax system is generally for Larger Companies. We need your help in making that a reality. So, just give me a brief reply, if you might, as to the sensitivity and work that youre doing right now to help smaller businesses deal with our tax code. Thank, you senator carted. I want to start up by just acknowledging that the point about the Filing Season that weve, had all the credit goes to the irs workforce. I mean, im fortunate up to be here and talk about it and talk about their success. But its just a Remarkable Group of employees that care so much and are so dedicated to this mission that we have, this critical please extend our appreciation. We recognize that this is a stressful period for, everyone particularly the irs workers that are dedicated and has stuck with the mission recognizing the importance of Public Service. I agree with. You and i think the Ranking Member made reference to the plan as being, dense and it, is and i want to lift up the three main things that we are trying to achieve with the plan. I think in doing, so ill get to your question about Small Businesses. First, we want to build capacity to do better Customer Service. That is the first thing. The second thing is we want to build capacity to ensure that wealthy and very wealthy pay what they house, that is individual large complication complex partnerships. We want to modernize the irs infrastructure so we can better protect data and we can better automate our processes. In all of the, planning those are the three things that i want taxpayers to take away. So if you are a Small Business, based on what i just read and what i am committing to, our focus for you is improved service. It is not improved or some wave of audits. It is improve service. How do we improve service for Small Businesses . We meet them where they, arent we have to help them understand their obligations. Under the tax law, we have to figure out how to put new Solutions Online for them to make their journey easier. If their paper fillers, we have to figure out, is there a bridge to get them to electronic . Vials can we work to process their people files more quickly so they can get their refunds and have tax certainty more clearly . If we can modernize the irs, then we can also keep pace with how complex the law is and is changing. And we can meet taxpayers where they are more effectively. We just historically have not been able to do that because of the incremental and aggressive funding cuts that have happened since 2010. But the Inflation Reduction Act provides us an opportunity. Again, if you are a Small Business, our emphasis, our, focus when i go to sleep at night thinking about and wake up in the morning thinking about is how do we help Small Businesses meet their obligation . Thank you, mister chairman. My colleague, senator corman, is next. Commissioner, is indeed true that a tax credit or tax subsidy dollar for dollar ads to federal expenditures in the case of a 31 trillion dollar debt . It adds to the debt . In other, words tax credits or just another way for the federal government to spend money, correct . Technically it like an outlay or a spend with respect to measuring the deficit. We talked a little bit about the Inflation Reduction Act. , in addition to throwing gasoline on the fire of inflation with 700 billion dollars of additional spending added to the debt, as part of the Inflation Reduction Act this partisan bill, this is voted on exclusively by our friends in the democratic side of the aisle signed into law by the president. It lavishes rich subsidies for electric vehicles up to 70 500. Its a tax credit for the electric vehicles. I want to point out that contrary to the original estimate about how much this would actually cost, in terms of outlays, it was originally advertised as being a 30 billion dollar expenditure and the truth is it looks like its gonna be closer to 200 billion dollars. Six and a half times higher than advertised. The president , as you know, has said by 2032 he wants to buy his magic wand say that two thirds of all the vehicles being built will be electric vehicles, even though we now have 280 million cars on the road and almost all, except two or three or 4 , are internal combustion engines. Added to that we know that about 60 of electricity that would be needed to charge those batteries comes from fossil fuels. Only about 22 of the electricity is generated by renewables. We know that, basically, this man day this lavish expenditure for the rich would do virtually nothing to reduce carbon emissions. I want to ask you about the supply chain. 77 of the batteries made in the world are made by china. We know that they are on a path to increase their capacity to build electric batteries by seven fold by 2027. Is there any way that this mandate, that President Biden has ordered, with the stroke of his pen, is there any way that it will do anything except increase the sale of chinese made batteries here in the United States . Senator, i do not know the answer to that question. What i do know is with the irs responsibilities are, to issue regulations and guidance for how these credits will be evaluated and who will be eligible for them based on very intricate arrays of requirements that are in place. What we are doing now is issuing, on a path to issue for congress. The questions you are raising, the tension, the policy tension that you are raising will be flushed out in the comments that we received on the regulations. I will be able to come back, sit in this chair, and be more illuminating in terms of what those comments are. We can talk about what those tensions are. You dont agree with me that those regulations are going to have to be consistent with what is in the law . Absolutely. Actually, the Inflation Reduction Act, misnamed i might add, actually provides a schmuckish board of credits for electric vehicles. For example there is a 4000 dollar credit for use later vehicles. There is a 40,000 dollar tax credit for commercial electric vehicles, that is section 45 w. Then there is a tax credit for fuel cell cars, section 30 b. Do you know if there are other credits that have the same critical mineral and battery searching requirements as the 7500 dollar ev credit . Senator, do not know that at my fingertips. I can certainly provide you information on the. I appreciate that. It appears to me that the american taxpayer will be subsidizing the purchase of chinese made commercial and use electric vehicles by virtue of these tax credits. We would appreciate you getting back to us with that information. Thank you, mister chairman. I think my colleague. We will go to senator johnson. I just want to say as the lead author of this package of more than 200 billion dollars in Clean Energy Tax credits we felt very strongly about the point senator cornyn is talking about, batteries being made in china. The legislation, in my direction, provides incentives for batteries made in the United States. That was something we worked on mr. Chairman, if i could just respond briefly it is not possible to meet that requirement due to this constraint on supply chain and battery manufacturing. Its either going to subsidize chinese made batteries or it is an illusory promise. There are plenty of supply chain issues i will go to senator johnson, but the point is something that i happen to agree with about batteries being made in china. It is something that we took direct action to deal with one remarking of that legislation. We want the batteries made in the United States. We push to make that possible with the incentives. Senator johnson . Excuse me, i said to my colleague i appreciate that. I am sorry, i got out of order. Senator thune is next. My apologies. And know you love that, right . Commissioner werfel, thank you for being here. I know you have probably answered all the questions on this front but in your confirmation hearing you said that you will have dual priorities at the irs. I quote, equally focused on improving Taxpayer Services and improving the irss capacity to often packed complex returns, and quote. I appreciate and respect your aspirations there. The funny priorities of the Inflation Reduction Act and the president s priorities seem very different. The partisan i. R. A. More than of half of the 42 billion is directed towards enforcement activity. Only 4 of the 80 billion, again, 4 4 was earmarked for improving Taxpayer Service. President biden recently proposed boosting the irs budget by 15 over and above the massive funding increase the irs received from the Inflation Reduction Act. The president s budget would provide a separate, additional, 29 billion dollars for the irs for enforcement. And addition to the 46 billion for enforcement they are as received last august. Given the overwhelmingly disproportionate funding to enforcement towards Payer Services would you agree that some of the Iranian Forces funds could be more effectively spent on Customer Service improvements . That is a good question, senator. I think we actually need slogans for do both. I worry that if we were to redirect funds from one bucket to another we would lose important ground that we need to cover in one particular area. I say that, i know it seems like for the enforcement dollars there is a lot. The reality is that today we have 2600 staff that work on high income, high wealth tax payers. Individuals, taxpayers, complex partnerships. There are more than 390,000 of those. 390,000 high wealth, high income taxpayers, corporations, and partnerships and we have 2600 staff. A lot of these filings are thousands of pages. Tens of thousands of pages. Some come in hundreds of thousands of pages. Every dollar we move off of our effort to build the capacity to unpack those returns means that i think we are leaving money on the table for the American People in terms of our ability to close the gap in terms of what is pay versus whats owed. I dont dispute the fact that they are probably in need of some additional enforcement funds but the way that this cues, 4 for Taxpayer Services. 90 of the phone calls to the iris werent answered in 2021. I think it was a little better last year. You have this massive amount of funding infused into enforcement. Not only out of the i. R. A. But now, also, the president s budget which we are considering in talking about here today. I wanna make one of the port that i think was touched on by senator cornyn, the Inflation Reduction Act, 3. 2 billion of overall funds towards Taxpayer Service. The irs inflation direction to drug operating plan which was released more than 45 days late, i might add, poses a total of 3. 9 billion for Energy Security which includes 1. 2 billion of the total allotment for Taxpayer Services. By Energy Security the irs referring to all of the above energy approach . Including conventional Energy Production or simply provisions related to green energy . The funds that we need are to implement the energy credits. It is a lot of work. There is a lot of Customer Service reps that we need. For example, in the budget for 2024 we have asked for a one point a billion dollar incremental increase. Part of that 1. 8 billion is to fund a 1200 new Customer Service agents and staff to help us implement the energy crisis. We are going to get a lot of questions coming in and we are going to have to process. Additional applications for credit. That is what that funding is talking about. As irs commissioner, what is a high priority for you delivering better Taxpayer Services . I will note are projected to blow way past initial cbo projection. Is a Taxpayer Service . Is a Green New Deal priorities . Why doesnt the budget reflect that . The irss responsibility is to administer the law that is enacted by congress. We dont take policy preferences. We managed to i know you dont do that. But you do have to prioritize. You have a certain amount of allocated resources. 4 is going to Taxpayer Services with a deplorable record the iris has in responding to people across this country i am all for secure and Sustainable Energy policy but im deeply concerned that the irs has made more i. R. A. Funds committed to promoting the administrations radical Energy Ginger than for improving the i am working with senator glass lee on an irs funding accountability act which, hopefully, will bring some transparency and accountability to this massive infusion of dollars to be resources and employees that the irs now has. I just really urge you to reconsider your priorities. Senator thune, very quickly, and we will go next to senator warner. This question that you started with with respect to enforcement. You and i have worked on so many of these tax issues over the years. I would just hope that we would say these are not mutually exclusive we would do both, we desperately need to improve services. Our citizens are telling us that is important. We also need enforcement. That is about the tax gap is all about. If we dont enforce the tax gap we wont get the money for these wealthy people. I look forward to the type of proposals that you will be making. Always willing to work with you. Senator warner . Thank you, chairman. Thank you for holding this hearing. Commissioner, good to see you. You dont look that much worse for the wear. Again, i think many of us on both sides of the aisle, regardless of where we may disagree or agree with specific policy, we are really grateful for your willingness to take on this job. Another chairman had already mentioned this but i commend the fact that we are working through that backlog and we are going to have, i think, and efficient taxpaying season. I want to drill down on two issues. One which ive raised with you already in milan which i have not. The first is, and this is the call that we had in late march the Employee Retention tax credit. One of the things we put in place during covid. Again, a bipartisan piece of legislation. Was well intended to make sure that folks, employers, kept people on during covid rather than have them be put on unemployment. As i shared with you there are a number of businesses in virginia, i imagine this is probably the case in other states, as well, there has been a backlog, they can get clarity. They are not getting these tax credits which, i, think they deserve. These are businesses from a policy standpoint did what i think we all thought was the right thing. Keeping folks employed during that period. Can you update us on the overall backlog and where we stand . I can, senator. Thank you for the question. What i would like to do is very quickly walk you through the situation as i am finding it in my first week at the irs. The actions that we are taken, in the results that i expect or we should expect. The situation is the employer retention credit is an extremely complicated filing to process. It is paper based it is often coming through as an amended return. You have to align resources across multiple tax years. The staff of the irs has a lot of work to do when these come in to make sure that they are processed correctly. Secondly, we see a lot of potential fraud, and issues, in terms of nefarious individuals seeking to seek these refunds, or these credits, when they are not eligible. Or trying to do people into thinking that they are eligible. That is the situation. The action is, now that Filing Season has ended, we now expect last calls coming in as most of them have filed a taxes. We can redeplore people off the phones, reset, so prior to this move moving people off of the phones, we were resolving about 20,000 of these retention a week. Using overtime in any downtime on the phones are up. Moving people to do it. All hands on deck situation post this Filing Season now that we can reset the staff i think we can, maybe, the double per week the amount of credits that we are processing. That is the action we are taking. In particular i want to make sure. Ive talked to the team about making sure we go with the older ones first. Those who have been waiting the longest. Really focus on 2022 or prior. They are still coming in. Under the law they can come in until 2025. This is a filing we are going to be dealing with for years but i think we are going to make progress. Thats a great answer, i also took away the fact that you are going to double, per week, the number of these how many how much backlog is being taken care of in a weekly basis at this point . 20 k. 20 k week. , we can look at 40 k . Week thats the hope. Okay. You just said it on record. I will come back to you. Last question. Section 127 of the code has something that has had bipartisan support for years which, basically, as you are aware, allows an employer to go ahead and send an employee back to school to get additional education. That additional education, up to 250 a year, goes, tax free, to the employee. Great retention, great apology to get additional skills. One of the things that my friend jack dylan i put a bill and, a broad bipartisan support that said we do this on a Going Forward basis. Shouldnt we also allow those employees who have student debt to go ahead and qualify, as well . Be able to be the ploy or to pay down tax free . Weve had it in place for a year. It got extended until 2025. The take a puree, it seems like such a nobrainer, the take up rate has been not great. What can we do to help further promote . Regardless of how we feel about student debt. Everybody is all in. Again, it is a great retention tool. I know im overtime so i wont say anything else mister chairman but i would really appreciate an answer. Absolutely. As i mentioned, the three priorities of our work going ahead are to improve Customer Service. Increase capacity. To assess high income filers. To build the backbone of the irs so it is on a more stable modernize footing the First Priority, improve Customer Service, that is doing customer outreach. It is making sure the taxpayers are aware of the credits that they are eligible for. The benefits that they can participate in i think there is a education gap, and then a sense that the irs is so complicated. Even if the benefit might be there, how am i going to navigate the tax loss to get there . These are two things that we have to close the gap on. We have to make sure that people understand what they are eligible for. We have to make sure that they understand and know that we are working hard to create a much easier path for them to navigate these types of rules. The time of the gentleman has expired. Senator hassan . Thank you very much, mister chair. Ranking member for this hearing. Commissioner, it is great to see you. I want to congratulate you on your recent confirmation and thank you for testifying today. Before returning to my question i want to highlight the importance of remote notars asian for consumers and Small Businesses. Something that i just heard about from constituents last night. Commissioner, i encourage you to look closely at permanently extending the irss policy to make it easier for families and businesses to use secure modernization for tax paperwork. On to my questions, recent reporting has shown how emerging Artificial Intelligence technology, such as chatgpt, could be used to scam taxpayers by a impersonating tax employees. These are used to generate well composed messages that trick taxpayers that force kim impersonal information. Using chatgpt to easily generally scam method on the employer retention credit that requested sensitive personal information such as Social Security numbers. How do you expect a tools to change how the irs protects taxpayers from scams . Are the viruses current Antifraud Program is well suited to prevent emerging and Technology Scams . That is a great question senator. We do have, embedded in our operations, tools, forensic tools. Fraud attraction, data analytics. That have been strengthened overtime. I think, i find as i arrive at the irs to be in very good shape in terms of our understanding of the portfolio fraud that is out there and how we detect it. But, we have more work to do. In particular this is fast moving. There is this concept of more law in terms of how exponential e these things move. This is why the Inflation Reduction Act are so important. That is the difference between us being under resourced and allowing these scams and a. I. In these emerging solutions to outpace us or the ability for us to keep pace. , i would look forward to continuing the conversation with you about ways we can make sure you are all in a position where you can deal with the evolving threats. Absolutely. The National Taxpayer advocate have called paper tax returns to the irss kryptonite. Many of the frustrating iris issues faced by my constituents are because of the backlog of unprocessed paper returns. The issues range from families struggling to get the refunds from Small Businesses waiting for Employee Retention tax credits. How is the irs plan to improve processing a paper returns . How will we help our constituents stop in the backlog . A couple of things, first, scanning is a critical part of this. We have really started to scale our investment its gaining solutions. We are scanning hundreds of thousands of paper forms now. That makes the entire process much quicker. I anticipate that we are Getting Better and better at it, week by week. We are going to start to be able to do a lot more skinning especially next tax Filing Season. Right now, dealing with the backlog today. The second thing i mentioned most to senator warner. The end of tax Filing Season, we need to start redeploying some of the people that have been on the phones, move them to paper processing. This is just good seasonal adjustment of workforce. I anticipate that we are going to make substantial progress on some of the paper backlog as a result of resetting where the employees sit. There are other things we can go in term. Again i go back to the fact that we have to make a decision in terms of what we want from the irs. If we are funded, at a steady level or cut and all we can do is maintain our current operation. We have to make investments to deal with the complexity of what we see today. Thank you. I have a bipartisan proposal which would use bar codes to make the paper return easier. I hope that you will look at that. One last thing before my time runs out. A recent report found that innovative partnerships between nurses and Tax Professionals can help first time mothers fully access the tax benefits available to families. For example through the Nurse Family Partnership nurses have helped connect new mothers to tax filing information and tools which can help moms get benefits such as the tax credit. How does the irs support new mothers in accessing tax benefits . How do you think the irs can best promote these kind of innovative partnerships . I love the idea partners hhs, the center for Medicaid Services to do more to figure out how we can support these types of individuals. It goes back to this significant priority of improved Customer Service. Meeting taxpayers where they are. Making sure, a, they understand what they are eligible for. Some taxpayers need more help than others. If you are a new mother, if you are struggling financially in another situation, i want the irs to have a better understanding of the portfolio of different taxpayer situations. And better strategies for how to reach them i think we can work with other agencies to do it. I think my colleague senator is next. We have jumped right into the frying pan. Theres a lot of things that need to be done at the iris. Im grateful that you are engaging in this. We are obviously lacking a lot of the details, as you mentioned. You have said that some details are coming on this. One of the things i appreciate that detail is coming but one of the things that you raised, we are not gonna do audits, increased audits for those individuals and businesses with 40,000 or less and as per the jenning getting statement from treasury. It is difficult for me to track what historic levels may mean. If i look back on, we have. To be able to go back and look at what historic levels of audits were done, 40,000 or less. Some years it was very low. Some years it was particularly high, statistically, on this. We dont know if that is a number, a percentage. If it is a percentage or number, what year that is . If it is going to be a group of years. If you say this is the historic level and you look back ten years ago versus five years ago versus 15 years ago, that is a very different number. Help us understanding what the word historic level means. Thank you for the question, senator. Just to clarify the pledges 400,000 a year. What i believe, the message that i want to provide to you and to the American People is we are, for the next number of years, going to be so focused on increasing capacity for high wealth tax payers, individuals, and complex partnerships. There will be no change to the most recent audit rate that we have. The final complete audit rate that we have for years. Once we feel like we have done the necessary Capacity Building in the high wealth area, then it will take years to even get close to what we see as historical average versus where we are today i want to make clear that audits, we dont have a final audit ray for 21, 22, 20. It is still possible that there could be audits issued we will take the most recent final audit rate it is historically low. It addresses some concerns that you raised in your question. We will allow that to be the marker for at least several years and then we will revisit it. Historic levels means 21, 22 audit rate . Earlier than that its more in the 2018 2019 range because that is actually 2018 is now closed that is a final audit rate. Whereas the other years theyre still the potential that the outbreak could change. I dont mean to pick on this but this is an issue that we debated on the floor during the i. R. A. Debates. Republicans actually brought an amendment saying it cannot include that 400,000. It could not include that. Democrats likely voted that amendment down and blocked it this is why this is such a question now i know everyone is saying it wont be that foreigner thousand all urged but there is nothing in statute does that. In defining a storm and what that is seems to be a moving target. It is helpful for us to get a clarification on that. The 2018 numbers what it is going to be . Yes. Okay. That is helpful for me to get. We will follow up on it. There are a lot of questions about the individual master file and some of the updating there in the technology that unite talked about before. The issue of technology in the irs. I have been in the senate for 70 years. Every single year im here the irs has legacy harbors of where. That is every single year. I know you are saying with the additional funding you will be able to update all the software in fund where systems, thank you for that. The issue on the individual master file, where that stands in the process . A lot of things are built on the. I think one of the priorities that we put in our plan is the desire to fully update the individual master file by 2028. I think the reason we need to modernize it is a couple of reasons. We want to make sure and we think the American People deserve to have the most uptodate Technology Housing that data so it is as secure as possible. And, obviously, with the more technologically sophisticated platform weaken on any more, we can do more, we can meet emerging requirements more quickly. The technology is not all old. As you said there has been investments. Issue is we have across the finish line. My goal is to make sure we are not just updating this part in that part not bringing together the full suite of solutions so that final solution is modernized. It will be less expensive to operate and easier to update in the future. It is a central priority for us Going Forward. Thank you. Senator johnsons neck. Quick comment, if this committee can focus on spending all of our time and energy on simplifying the tax code, stop trying to socially engineer, through the tax code, a lot of these issues and problems just evaporate. It would be a whole lot issue to tackle. That is just my commentary. Mr. Commissioner, welcome. You are quoting statistics of 87 Response Rate versus 15 last year. Where are you getting those numbers . I have something completely different. Do you have the numbers to backup those percentages . We do, senator. This is the same methodology we have used for years. Could you please provide me those numbers. We couldnt find them. The numbers, last, year 63 million calls. You responded, you answered 21 million. A Response Rate 33 . This year the calls are way down. I think people just got discouraged. 26 million calls 16 million were answered. You actually answered last according to the numbers that i got from the irs. I would like to figure out what that discrepancy is. With 45 million flown into your coffers about endorsement im highly concerned about, how are you going to keep partisanship out of your enforcement efforts . How do you make sure that enforcement is a political . We have examples of the irs being weaponized. The tea party, targeting the tea party. The lack of enforcement, quite honestly, when we have emails showing hunter biden simply didnt disclosed income. We dont see an enforcement action. The most recent and i would say outrageous example of this is one journalist matt tyab he was testifying before the House Judiciary Committee, the weaponization of government, basically the day he is testifying irs agents show up at his home. First of all, how common is that . I find a lot of tax returns. Paid a lot of taxes. Ive never had an irs agent drove at my home or place a business. How unusual is that . Having an irs agents show up to any taxpayer home is the first noticed that you have an issue with your tax returns. First of all, senator, i would like to repeat something i said earlier which i am prohibited from discussing understand. Thats why i ask you a general question. What is the normal course of action for notifying attacks player . For example you reject a tax return . We have made public, for all taxpayers to see, what they can expect from the irs in terms of when we might call you, when a home visit might occur. It is something we want to make sure that the taxpayers have an understanding out. There are a lot of scams out there. Well see if the irs is reaching out to you it is probably not the irs. We know, so, i think this is pretty well documented. An irs agents showed up. Put a note on mr. Tybees door. Called him four days, which he did. They explained what the situation is. I find that unbelievably unusual. I am asking you, as irs commissioner, does happen often . How unusual is that . An irs agent shows up to taxpayers home and house them, give us a call. Throw on top of that and irs agents showing up at a taxpayers home that taxpayer just happens to be testifying before the House Judiciary Committee on the weaponization of government against u. S. Citizens. The chances of that happening are infinitesimal, but it happened. Im just saying, in general, how often does the iris show up as the first notice that there may be an issue with the problem of taxpayers return . Making a personal appearance to the taxpayers home. That part of your procedure . It doesnt happen very often . Again, i want to be cautious in the answer to make sure i am not violating a prohibition. Thats fine. Talk in general. I will say, generally, if a taxpayer if the irs is reaching out to you directly it is more likely the case that there has been some issue with your return. We have tried reaching you threw less intrusive means we have been unsuccessful, we want to help and get a handle on while you may not have filed. While you might have an outstanding bounce do. You are not answering my question in terms of how often dont happen . My time is running out so all i can say is chairman jordan has sent you and secretary yellen a letter requesting all the information. I will be sending a similar letter. I would like it if the chairman would join me in this letter to get that information. This is very troubling to have the irs take that type of action the chances are so infinitesimally small that a iris agent would show up at a journalist door the day that journalist is testifying before the irs committee. I will also be requesting that all the information almonte coming and on that specific case, theyve already issued a waiver that the irs provide that information. Im asking . Will you provide these requests . We turn that over to myself and chairman jordan . As long as we can do are consistent with section 60 103. Yes. Senator blackmon is next. Welcome back to a. Tacking on to what senator johnson was saying, i think it is important to know that with the lowest learner schedules and targeting that took place at the irs, you are very familiar with that because you were brought in to help clean that out. When there is the perception that people are being targeted, there is anecdotal evidence and that information makes it to us it mean that we need to question you about this. You know what a debacle that was during ms. Learners time. I would like to return to when i was with you in the first hearing. We talked about the sitka and the 400,000 dollar limit. How you would be able to put that in place and not have it affect people who have tip income who are actually making less than 400,000 a year. As we discussed, i dont think you are able to give me an example of someone you knew, or any profession you knew, that would make 400,000 a year that was working for tips. So if the iris and focuses on taxpayers that are making 40, 000, how do you justify this sit good program . How are you going to handle this so it does not become a mandate on employers . I appreciate the question. Again, i think it is absolutely the case i want to reaffirm, those individuals who are making less than 400,000 well see new wave of audit are no increase in the audit rate, as i have described, earlier in this hearing you will be increasing their taxes . This is a question that i think we need to do better our reach with the associations. Restaurants, tipped workers, to make sure we are better aligned. Is your goal to make the program mandatory . Right now it is voluntary. Are you trying to make this mandatory . I have no intention. No intention . Okay. Let me move on. You talked earlier about the Historical Rate of audits. Previously you had said you and yell and had each that you are not going to raise taxes. The president has said no one making under 400,000 a year is going to see their taxes raised. Now that has changed. To no more than historical levels. If you could give us in writing how you are catching that. Five year levels . Ten year levels . Is it going back to 2018 and setting it there . Was that a high mark, without a low mark . I think there needs to be a little bit more clarity on that . I would also like to hear from you because this is causing great confusion, how do you calculate the 400,000 . Is it based on adjusted growth . Is it based on net . How are you arriving at this number . The reason i asked this . Commissioner tennessee is a very entrepreneurial state. As you know we have a lot of people in the music industry. We have a lot of people that do tours, that work with these tours they are self employed. They are independent contractors. While they may have a higher gross, their net is very low. It is important to have definition of what do you mean, what is 400,000 growth, adjusted gross, not. Where are you packing that . On that question we are going to look at total positive income as our metric. If the return comes in and the total positive income on the return is under 400,000 we will know that it is in a segment of population that would visit increase their audit rate . No. That is the point. There would be no increased likelihood of an audit if they had less than 40,000 in total positive income. Okay. Lets go back to the issue we previously discussed about teleworking. I know that senator thune talked a little bit about the phones not being answered, which is an issue we hear quite a bit. You have a heavy lift to go. I would love to know what percentage of your employees are currently in the Office Working how many are teleworking. Are you pulling that vpn data and auditing that . That is what you ought to be auditing to see if they are actually conducting business, logged in, working. Or are they asleep on the job . Senator, let me offer you this. First of all i want to qualify all employees are working. My first two weeks of the irs i focus my questions as follows. Army answering the calls . We answered 87 . Are we in the taxpayer Participation Centers and walkin centers keeping the launch or to meeting all of our employments . We are really making progress in processing the paper backlog . We are. Are we defending cyberattacks . We defended a billion cyberattack successfully every year . I understand the question. I think also onb just issued guidance last week on telework. Im going to now turn to that figure out how to make sure the irs is aligned with the rest of the government. I would say that the success that we have had with the Filing Season was the most important metric to start with before i got into the details of where someone might be working. Time of the gentlelady has expired. I just want to say because we are getting ready to make sure that everyone has a chance to ask questions but the program senator blackburn has been talking about, the Small Business program is voluntary i want to assure colleagues that as long as im chairman of this committee it will not be mandatory, period. Full stop. It will not be mandatory. Senator bennett thank you mister chairman. Thank you very much for being here we really appreciate your service during your confirmation hearing i raise concerns on how the irs considered taxing Colorado State tax refund which we call table refunds. I also sent a letter out this yesterday. As you may remember the iris notified colorado taxpayers in the middle of Filing Season, right when people were filing their taxes that it could tax the refund. In 30 years the irs has never done that before. In february the irs issued guidance saying it would not tax table refunds for the 2022 tax year, which we appreciate. The guidance also open the door to tax refunds in the future. In the fine print, the irs groups these tax payments into two categories. The first category was state tax refunds, which the irs almost never taxes. The second category was general welfare in Disaster Relief payments, which the irs is more likely to tax down the road. For reasons that i still cannot understand the irs put colorados taber funds in the second category. I think that the table funds should have been placed in the first category. They are state tax refunds. This is how the irs has treated them for 30 years. Taber reef runs only go out, as i think you know commissioner, to colorado when the state collects more in taxes when we allow it is a refund and it has been treated that way for three decades. You have committed to working with my office in the state of colorado ahead of the next Filing Season about this can you talk about how you are thinking about this now . Give some assurance, i hope to the people of colorado and how this is going to be treated . I appreciate the question. I have had some time to start to roll up my sleeves and look at the issue. Obviously there are multiple states that are impacted here there are questions about the transition out of the pandemic whether it if it is different treatment for covid payments or not. I agree that there is confusion. We need to remediate that confusion. The one thing i will tell you is we will not allow there to be confusion next Filing Season. I want to make sure that you, the state of colorado, other states impacted have a heads up in terms of how we are sorting through this issue so there is greater clarity going into the next Filing Season next year. I also need to sort through, senator bennett, whose decision . This was a question that came up earlier, was it you the commissioner, was a congress, who decides on this . Im working with my colleagues at treasury to make sure i understand is this a tax policy call or an iris administrative call . Bottom line as we head deeper into spring but before the summer i will come meet with you in your office and let you know where this is headed in terms of what the process is a make sure that you in the state have a heads up in terms of the moving pieces. I appreciate the commissioner. I hate to say this but i dont think i get to make the call. I hope that the people who are looking at this understand, come to understand that the irs has made this call the same way for 30 years. It is really aggravating irritating that this happened during the middle of tax Filing Season. I appreciate you saying that wont be repeated. But that is only part of their. The part of it is upsetting an expectation that has existed for decades. I know that there are other states involved in this. There is no other state that has tabor. I hope that you consider that i had another question for you, but i dont have time. I will submit it for the record about the importance of staffing at the irs. The importance of having a staff counselor to be able to help do the work that you are going to be required to do. Honestly, i think part of the problem we ran into the last time we were going through this was the department was not staffed up in a way that it needed to be people making decisions without being in a position to feel like they had the latitude, i dont know. I can explain. It can use a word about the importance of . It is absolutely critical. Look there are only two Senate Confirmed positions in the irs. My position and the chief counsels position. It is really important that we have a chief lawyer at the irs. As we have been discussing, so many of these issues every one of these issues, actually, has complicated legal elements. We have to recruit lawyers in, we have to work with other Senate Confirmed general counsel across government. Not having a Senate Confirmed general counsel is an impediment. I am hoping that the administration can put a name before this committee. That is the point. Senator bennett is absolutely right. We need a nomination. Senator daines it is next. Chairman, thank. You outlined to address by putting my First Responders act by signing into law as part of the retirement legislation that we can sit in this Committee Last congress. This law will make compensation received by disabled First Responders tax exempt even after retirement and, importantly, will end the improper audits of disabled First Responders that stem from ambiguity around their retirement age. However, the version that was signed into law moves the Effective Date of the bill to 2026, which was different than the committee passed version which had this provision taking this effect immediately. The unfortunate consequence of this is that erroneous ir audits have continued for the next few years. I ask for your commitment to immediately and the improper audits of disabled First Responders following a confirmation hearing. Frankly, i was very dissatisfied with the response. Youve been confirmed, congratulations. I will give you another opportunity to answer this, i believe, very straightforward question. Will you commit to ending the improper audits of disabled first . Responders first of all, senator. I want to thank you for championing this really important issue. I think it is absolutely critical. I am committed to helping you with your objective. What i can commit to you is us issuing clarifying guidance that will assist disabled First Responders when they are preparing their tax returns. We will conduct outreach with them we will walk them through the guidance. We will try to mitigate the risk of it being a issue a followup. If there is an issue of followup we work directly to address them. I cannot commit to exclude audits on any one topic. I just cant go that far. And as my attention, it is a priority for me. We will work with this committee to make it right. I tried to make it easy. I said, improper audits. Here, let me give you a chance to answer it again. Will you commit to ending improper audits of disabled First Responders . Yes, i will. Yes. It is a yes or no. Im trying to give you the lane here to make it clear. As you know, a lot of folks watch these responses. Our First Responders, when you hear their stories. They have been disabled while on duty, there are a lot of terrible stories about the iris coming after them. They live in fear, not knowing that the most frightening letter to get in the mail, the irs letter that says audit. They are already dealing with so many issues. I heard you say yes, i did. Thank you for that answer. A lot of families of disabled First Founders will be excited to hear that answer. This committee passed it. That is our intent. Thank you for taking away anxiety from families who are already doing with a lot of pain. Absolutely. I appreciate it. Commissioner werfel, you have been quick to tout the success of the irs in the taxpayer experience. However i think it depends a bit on what metric youre looking at. Prior to getting into Public Service i was working for companies, Procter Gamble being one of them. Another was a Cloud Computing company where we focused on our crm sweep for large and public entities and private entities that had a b to see how the model here in taking care of customers. You are touting an 84 Customer Satisfaction rate for total free assistance. Simultaneously, the manifest seemingly deep prioritize banded tax returns, amended tax returns, in correspondence. There are literally tens of millions of files languishing. All of us here when we are working with Constituents Services deal with our constituents who are saying we feel like we are tow trucks. Turning to pull this out of the ditch. To help the people that we serve. Should treasury and the iris really be taking a victory lap at this point based on cherry metrics like the highly misleading and often criticize level of service as the toll free assistance . I have several thoughts in response. First of all, i think the issue with the backlog paper returns is we are actually making dramatic improvements. We were at 20 million backlog. That was caused by covid. We never had a backlog like this before. They had to shut down operations right in the spring of 2020 as the world with shutting down days and days of paper piling up. We are still catching up. We are making progress. We cut it in half last year to this year. Now, during Filing Season, we have to redirect resources to the phones we do not have as much staff that we can manage the paper backlog. The end of Filing Season we anticipate making more progress. I also want to address your question about the victory lap. I think it is absolutely critical for the American People understand that when we are funded at the right level we can be there to answer the call. They dont have to wait for a 25, 30 minutes on the phone wondering if they are ever going to get through. If we dont have that funding, if we cant staff the Customer Service centers with the right amount of people, it is just math. A question of volume. Can we meet the demand . I think that is why we want to celebrate this. Im out of time but just one thought on that. As you look at your metrics, perhaps, sometimes its not as much enjoyment in looking at metrics still very discouraging. You can talk about the improvement of 20 million was the number you are down to 10 million, lets track that number and report on a. Keep it public as you are chipping away trying to get that the time of the gentleman and expired. Senator warren. Thank you, mister chairman. For years lobbyists and tax extremists have worked to get the irs to present it from chasing down wealthy tax cheats and to keep it from being able to help americans who are honestly trying to file their taxes. Thanks to the Inflation Reduction Act the irs now has the resources it needs to make tax filing free and easy. This has been on the irs agenda, they are to do list for decades. Back in 2003 the irs set up the Free File Program, a partnership with Companies Like into air and 8chan our block that was supposed to make filing free for 70 of taxpayers. Today, that Free File Program serves just 2 of americans. That is because the Tax Companies sabotage the program so they could keep raking in money. Deliberately hiding free via web pages from google searches. Confusing eligible taxpayers by marketing other fake free programs to them only to scam them by collecting a fee later on. Let me start here, commissioner werfel. Do you agree that the current free file failure is a Program Failed i agree that it is not reaching as many people as it should. The difference between 2 and 70 . It is massive. I think that is a failure. Tactics economy has sabotage the Free File Program. They have tricked american tax muellers into paying for alternative services that should be free, are marketed as free, but in fact are not free. The result is that today the irs reports that americans wait an average of hours and 250 each year fail their taxes. The Treasury Department estimate that about 12 million low income americans miss out on thousands of dollars of refunds likely to because it is too expensive and too difficult to file through these, supposedly, free options. Commissioner werfel, do you agree that the private tax filing options at the companies are pushing instead of free file is also failing american taxpayers . The whole process needs to be improved, i agree. We need better clarity. When i hear the premise of your question i think about the taxpayer bill of rights. Taking off three of them, three of them were violated in the questions in terms of the implications. We have an obligation to make the tax system easier for taxpayers to navigate. Congress hands us a very complicated i understand that. We need to make it simpler. Yes, i want to work with you in this committee and with taxpayers to make that process easier. If they are eligible for free file and they are not taking advantage of that, or are getting tripped up along the way, what can we do to help . Government accountability office, the National Taxpayer advocate, treasury secretary yellen, many of the colleagues on this committee all agree that it is high time for the irs to develop its own truly free and easy way for hardworking americans to file their taxes and to claim their refunds. Thanks to the Inflation Reduction Act the irs now has the resources to do so, including dedicated funding to develop a roadmap for directy filing options with a direct report to congress due next month. I am looking forward to the report. You dont have to say here what it is going to do i know that we have an opportunity than to talk more about the specifics on what the irs can do to help tax fillers. Broadly speaking, commissioner werfel, can you explain why offering why free and easy ways to file directly with the irs would help american taxpayers . Particularly low income and middle income families . Again, as you said, we are issuing a report by congressional mandate in mid may. That will walk through a lot of the issues. One of the goals that we have at the irs is to increase the options that taxpayers have to engage with us. If they want fully digital, they should have a fully digital. If they want to do it with paper, we are not thrilled with that but we will want to meet taxpayers where they are. To meet with taxpayers working through a third party we now the opportunity to study that and Tell Congress what the implication of that is. As a guiding principle, the more workable options, the better. Because Congress Asked and has legitimate questions about the issues associated with the direct file program we are going to answer them and then i will come back in mid or late may and we will talk to the reports sayd. I look forward to that. I think it is clear that the American Public deserves an irs that ensures that folks at the top pay what they owe. Honest, hardworking americans can file their taxes with how spending excessive mounts of time or money to get that done. I think that is where we are aiming. Thank, you thank you mister commissioner. Thank you mister chairman. Im thinking that as i listen to this we have been working for more walkable options for decades now. It is time to figured out. Okay, next lets see, senator cortez masto. Won the lottery here. How are you . Good to see you. Thank you for joining us, commissioner. Rios appreciate your attention and response to questioning calls, as well. Let me talk to you about something that has not been discussed here but it is important for many of us who are dealing with, unfortunately, disasters in our communities and governor declared disasters. This winter nevada has dealt with a series of severe winter storms which has resulted in major damage resulting in widespread flooding, contributed to more than 10 million in damages to our Public Infrastructure the governor and our federal delegation has asked President Biden to issue a major disaster declaration. I wanted to discuss how issues like this can impact tax filing. I have a bipartisan bill that would allow the iris to delay the tax filing deadline upon the written request of a governor when a disaster has been declared. It is very critical that we have what we are seeing wildfires disasters happening, it has an impact. What im hearing from my constituents unfortunately who are dealing from these disasters on their ability to try to file these taxes. Do you agree with the need to provide taxpayer flexibility in meeting that filing deadline when Something Like a Natural Disaster occurs . I do. We have a long history of extending deadlines and creating flexibility for individuals impacted by Natural Disasters. I think it is an important function for the irs. Not just to have a one size fits all approach elicited every taxpayers and in the same situation. We appreciate the tools. We can take over and rest with the guiding principle tools to help taxpayers and needed something that we are very interested in at the irs. That is what im hearing from you today in my colleagues questions on the jump to a separate subject. Immigrants face unique barriers to finally taxes. As a result, we have seen lower immigrant up grade rate, especially in the tina families. Two questions i have for you is what steps is the irs taking to remove barriers to finally taxes and receiving tax credits . Currently, it is my understanding that the irs does not allow i10 applications to be processed electronically. It requires that i10 applicants file a tax return along with their application. My question to you, would you consider eliminating these barriers for i10 applicants . Two questions, if you would, regarding the i10 application. How do we deal with these barriers to finally taxes and receiving tax credit for some members of our immigrant community who want to file their taxes . It has been a theme of this hearing. Taxpayers who are eligible for benefits and refunds, credits,. We recently announced, publicly, and have been trying to make a lot of press about comp file the statute of limitations on your refunds are expiring. We have a lot of on claimed refunds. People who can file who can claim their refunds are not doing so we want to make sure that we are paying people what they are owed. How do you reach out to those immigrant communities . Those immigrant communities who are paying taxes or want to pay their taxes but there are barriers to those . Maybe a language barrier. We have to do more with our stakeholders, intermediaries we have to work more in communities. Senator, earlier i was talking about one of the reasons im excited about the Inflation Reduction Act plan that we issued. It really does allow us to establish three very clear priorities. The First Priority i listed was customer share this. That is not just about answering the phones. It is not just about improving the call center, all of which are important but its also about outreach. It is about better understanding packs payers. There are a diverse group. They are not on the same situation. Some are struggling because of a disaster some are struggling because they are acclimating to the United States in some way some are struggling because they cant, financially, afford to pay what they are. We want to get them on installment agreements and help in that way. We can do better in all of those outreach efforts. Im looking forward to working with the team at the irs to do that. Thank you. I know my time is up but in response to the conversation earlier with senator johnson, as you provide that feedback, that information that he requested to the chair, can you distinguish between the two . You have auditors and you have investigators . We have criminal investigators that investigate for fraud, criminal fraud. And then you have auditors that are looking at the tax returns of individuals and corporations. Can you when you provide that information, distinguish between the two. Would an individual receive outreach from an auditor if there is a technical question that water has about the tax return . That could be separate from a criminal investigators that may be responding to an investigation theyre doing for criminal fraud, correct . Yes, we try to be clear. We could ramp up our communication efforts on this, when you can expect to be contacted by the irs, it can happen. It typically happens because there are questions we have about what you filed it might be a criminal question it might just be an audit question it does happen. One of the things that im worried about is that we need to make clear, more often than not, if someone is telling you they are from the irs, they are not. It is a scam. It is not easy to navigate. We do need, at times to be as transparent as possible, to reach out to taxpayers. Im really committed to creating a culture in the irs when we are doing outreach it is to help. This is the Customer Service time of my colleague has expired. Senator brown . Thank you, commissioner. Thank you for returning to Public Service. Not these job on the planet, especially when you are subject to political attacks, pretty much, all the time. Im glad that youre up to the task. Earlier you told senator warren about how much Virus Services have improved since last Filing Season. My constituents are still frustrated with the irs, no surprise. Particularly Small Business waiting to achieve the Employee Retention tax credit which their entitled. I appreciate your attention. I know you touched on outreach to senator warner earlier. Last fall iowa center to 9 million households and appeared to be eligible for the easy, or ctc. Something thats under weidman have made such a committee a priority but have not claim them. We know that roughly one in five eitc eligible households dont climate. What are some of your findings from last falls outreach, how you improve our nations households . I think the reality is that we have work to do and in particular because what were seeing too often is individuals are seeking to encourage people to apply for the credits they were not actually eligible, and so we are seeing some challenges in improper payments and fraud in a system that we have to weed through. That does not mean that we want to make sure the people again understand what they are eligible for. And so i think that there is more take up rate that can happen, and were seeing Employee Retention credits and other types of credits still coming in the door, but every time we do an outreach effort, we learn something. And we are on a continuous improving journey. And so the challenges, how do we hit the right people with the right set of guidance, make sure that they understand, help them navigate the complexity, that may be disincentivize, they may think its gonna be too hard, how do we answer those questions effectively and how do we also create important firewall to make sure that the people are not duped by nefarious players that they are trying to take advantage of them. Speaking of that, could you improve tax prepares . Yes. Important to know. When you hear last to ask about the ten 99 k reporting threshold, my concern that this was a burden on ohioans, a burden on thirdparty platforms, a burden on the irs, but with a higher threshold to make this simpler for you to administer so that iris can focus its resources mark patiently and therefore, would you support congressional efforts to increase the threshold . So i will answer the first question. Absolutely, yes. The higher the threshold, it would reduce volume, it would reduce complexity, it would make the irss job a lot easier. In terms of whether we can support that initiative, i always have to defer to treasury on that. On any piece of legislation, i do not have the authority to give the administrations position, it is treasury that does that. I, know and the senator, as you know, we talk to senator hassan to talk about threshold at 10, 000, coming down the red tape for taxpayers, and doing the villages to arrest that you mentioned. Last question, i would like to see the new energy tax credits from the artery work in support of american manufacturing, spurring genuine domestic supply chains, particularly in the Solar Industry were so much capacity needs to be built quickly. My state, northwest ohio, as the largest solar manufacturer in the country, and so tell us about irs plans to administer these manufacturing credits to minimize Administrative Burden and delays to issuing the credits. The critical irate funding will truly benefit these reassuring efforts. We have a lot of work to do, senator, weve issued a variety of different notices. We have requested information. Were taking a ton of input from a variety of different stakeholders about how they want to see irs regulation, and irs guidance issued. I expect that will issue it in the coming months, additional notices of a proposed rulemaking, and we are going to get a lot of comments. And i think i was answering the question earlier i think from senator cornyn about, you know, theres a lot of moving pieces to track in terms of different input and different stakeholders, and the right way to do it is to go out with a advance or a notice, lay out the issues, collect the feedback, and then publicly discuss, as much as possible, the various tradeoffs we need to make and making these work. And i look forward to talking to you, once we have a fuller set a feedback from the various stakeholders, as part of our notice and comment rulemaking, where things are landing and getting your feedback. Thank you commissioner. Senator brown, good points, and in particular appreciate your hemingway on solar manufacturing. Youre going to regret it deeply in this country if we look back at this period and we gave short to solar manufacturing. A lot of panels coming from overseas, get all that, we have got to manufacture more home. Thank you for making the point. Our next question will be senator young. Good to see you commissioner, thank you for being here today. I know youve only been on the job for a short period of time, and there are no doubt a whole number of improvements that you would like to see made that have not yet been fully carried out, and so with that in mind, i want to first focus on some trends that we have seen in this 2023 tax Filing Season. In remarks today, you state that the tax Filing Season has gone well. Among other things, you point to the irss own performance, claiming to have answered more calls from taxpayers seeking our help them in 2022. On this particular point, i would have to refer you back to our own reported numbers. 3. 9 million with a number of lower calls as of april 8th that the irs has answered, in 2023, that is compared to that same time last year. So there are 3. 9 million fewer calls. Jan, this i would like to reflect on a few additional irs provided numbers given to us by tequila that are not routinely reported to the public. All as of april 1st of this year. 10. 5 million are the number of calendar year 2022 and 2023 original tax returns that have not been fully processed because they have been suspended. 3 million is the number of these returns that the irs considers to be over aged, which worked out to nearly 30 . 6. 7 million is the number of calendar year in 22 and 23 amended tax returns which have not been processed. And 4. 7 million is the number of these returns that the irs considers to be over aged. Which works out to be more than 70 . Almost done painting the picture here. 10. 2 5 million is the number of calendar year in 22 and 23 items hall of taxpayer correspondence that had not been worked, and 5. 9 million, the last number here, is the number of these items that the irs considers to be over age, which works to be almost 60 . So, you know, its nice to hear that the average call wait times have decreased for those who call and are actually able to connect to the irs, but call volume to the irs is down significantly year to year. Despite this decrease, the backlog of taxpayer inventory continues. So just to clarify, commissioner werfel, after getting all these numbers on the record, and trying to bring some clarity to the picture, do you believe that the tax Filing Season has gone well for the tens of millions of americans whose original returns remain suspended . Amended returns remain and processed, or correspondents language is an a ban somewhere, none of whom are receiving their refunds or having their questions or issues addressed in the meantime . I would say compared to last, year the tax finally season has been a dramatic improvement. And i think it is important to amplify that, senator, because it was only possible with Additional Resources in our ability to add more staff. We did make progress on the backlog, but not enough progress. This started during covid. We never had a backlog like this before, but when we had to shut down operations, we had trucks full of returns sitting in the parking lots that we could not process. Until we can get back to operations, and i will say, this irs employees came back earlier than any other federal employees, had a work social distance, it was really heroic with the irs was able to do in the spring of 2020 as covid was unfolding. And this raises the key point, which is, how do we build a infrastructure in the irs, so that we can do both . So that we can manage the call volume and reduce the call volume. I dont have my numbers right or your numbers right, we will get to the bottom of that, these numbers are right. But if you say that the call volume went down, thats actually a good thing. That means that i website is working effectively. That means that our apps are working on our smartphones more effectively. If we can build that infrastructure in modernize, it is an example. If we just operate at the same budget or less, then maybe we can answer the calls. If we have investments, then maybe we can build and build a call back option. So the people dont have to wait. What the committee wants, what i want, what i think you and certainly my constituents want, commissioner, is to make sure that we are getting and giving the whole picture here, in terms of what the packs players experiencing and what the irss performances. And you want to be transparent. I voted to confirm in this position because i still believe, that and i did it at the time, yet its not transparent when the bad news of Filing Season, there is a mix of good and bad, its provided by inspector general, while the irs only highlights what it believes to be the most positive facts. And so Going Forward, just in short, we do everything that you can to increase full transparency with respect to the irss performance good in that. I love the idea of a balance scorecard, senator, and absolutely. I think the reason what i want to amplify the positives is because i want to make sure that its understood how important fully funding this based operation is. Thanks commissioner. Senator whitehouse. Commissioner. Yes. I wanna talk about the use and abuse of 501 c 3 and 501 c for entities in the political space. That is an area that the irs has responsibility for overseeing, is that correct . That is correct. And so the Citizens United decision of the Supreme Court positive something that i have no disagreement with, which is that if big political spending is not transparent, it is corrupting. That is why transparency was so important to decision. Political spending that is not transform parents corrupting. That is the law of the land. And we have massive non transparent political spending taking place. Corrupting political spending. Its over two billion dollars, and it could be a lot more depending on the importing glitches. And so here are some of the problems that we see emerging. First of all, to play in the political space with 501 c 3 s and 501 c 3 force, the current stateoftheart is to have a twin 501 c 3 and 501 c 3 four. 501 c 3 four is only supposed to do half. The 501 c 3 is in the vibrancy forest and at the same locations, the same staff, the same boards, the same founders. And yet nobody is looking at piercing the corporate bail and seeing whether the 501 c 3 s are being used to improperly support 501 c 3 for political effort. And so i would like to have you take a look at that question. Second, 501 c fours are only supposed to do less than half for politics, but what we see is associated 501 c 3 force that are providing a orchestrate cascade where the donor gives lets say 1 Million Dollars to front group 501 c Forefront Group number one, which spends half of that on politics, gives the other one to front group number two, which means half of that on politics, now are up to some hundred 50, 000, which gives that other 250 to another elated front group, another hundred 25, and now youre up to and then one more and you are over 900,000 out of the million being spent on politics in a coordinated way to secretly around a single table in a single meaning room. And finally we have instances of what seems to be massive self enrichment in this environment, as people seem to be paying each other off. Again, using these 501 c 3 and 501 c 4 mechanism. My child issues that i have seen big blow back from big special interest when the irs has tried to do its job in this space, they think he sought some of that pretty close to hand. And i think that the irs has trickled out and refused to do its job in this space because they fear that political blow back, and theyve created basically a lawless arena here in which the referee has chickened out and left the field, and i ask you to pull up your socks, do your job, look at these 501 c threes and 501 501 c 4 force. And look at these new behaviors with the numbers being so massive, with the coordination between 501 c 3 s and 501 c 3 for us being so suspect, and with a 50 rule being flouted, to the senate made any sense in the beginning being floated by coordinated groups of the operating in conjunction. Will you do that . So senator, its interesting that he is the referee analogy. I shared with the team when i arrived at the irs that it does feel like the irs is the referee in that we get food whether we get the call right we get the call wrong. Theres nothing wrong with that. But we cannot leave the field. We can take the boost but we have to be on the field, and so my answer to you is, if we are following short of our responsibilities, then we have to take a close look at that and figure out what we are doing and we have to meet our responsibilities. You completely falling short, you vacated the field, theres no effort being put into any of this, because of the harassment that the irs receives when elastic look in these areas. I think i would ask if im, wrong please correct me. Youre not wrong in that its an extremely complicated space, and weve learned ten years ago that how complicated a space that it is. It asked the iris to answer questions that are extremely extremely sensitive in places that onus on the irs, and then environment where were trying to build trust with taxpayers, and improve the overall dynamic that we have with taxpayers, and so my time is up and so we will follow up. But let me also just quickly thank you for your or work on the reciprocal bill and i think that is important to both standing offshore tax evasion and dealing with those assets, and i yield back. Thank you senator tom carper. Thank you senator. Welcome, back it seemed like a month ago were sitting here having confirmation hearing, your parents, your spouse, and your children were all sitting behind you, full of joy and pride, and i hope they still feel that way, and again we are so grateful to all of them for sharing you with us. Sometimes two inches shorter now, senator. You dont look at. I have a great team holding up here. Thats good. Today there are no minimum standards, as you know, for our professional requirements or paid tax preparedness. This is not an issue, when we talked about, and frankly not done enough for three years. But the problem with the tax finally, sometimes or outright fraud, as you know. Well most areas provide Excellent Service to their clients, the irs receives tens of thousands of complaints, tens of thousands of complaints each year about bad actors. For these reasons, the general accountability officers recommended again and again and again that the irs, that Congress Give the irs the authority to establish same standards to regulate especially those who may be acting in bad faith or preparing inaccurate tax returns. Again, this is not a new issue. Its one that i think weve actually discussed before. How is the irs managing the risk associated with paid prepares who knowingly or unknowingly prepare inaccurate returns, and what more should the congress do to further protect taxpayers. Senator, it is such an important issue, and as i move up my learning curve, every day on tax administration, you start to see that there are moments where problems occur and there is not a victim. It is just a mistake, the wrong amount might be paid, the victims might be the governments finances, but there isnt an individual person that is a victim, but in the cases that you raise, there are victims. There are people who are being taken advantage of. Often vulnerable populations, unsuspecting, and he can be heartbreaking, and its angering. And i want the irs to be doing its part to really close this type of stuff down and to be as aggressive as we can be in dealing with these nefarious individuals who are creating victims in order to financially benefit themselves through the tax system. More tools would be helpful. As i said earlier, i cannot comment formerly on legislation. That illuminate the Treasury Department, but we always welcome tools they can help us do more outreach or crackdown on fraud and on the type of behavior where the result is a victim. And so, i know that we have teams of people at the irs that are looking at these in the various prepares, trying to determine how we can get to them earlier. Theres a lot of education during Filing Season, senator, we do something called the dirty dozen. Which is where we outline the tax scams that are out there. We try to promote it, get as much publicity as we can out to americans, that these are the types of things to be on the lookout for. And scamming preparedness is one of the things that is always front and center in our dirty dozen. So help get the message out is critical. Good, thanks for that. I think senator warren may before arrived at the hearing today, the issue of no cost filing services, but with the 2023 tax finally season coming to a close, many of my constituents recently went through the complex and often had a process of filing the tax returns, my wife and i did too, and was created to simplify this process, at no cost for low income taxpayers. The program is not working as intended, and a review of the program that i requested from the general accountability office, not long ago, found that the rate is drastically low, disappointingly low. Some 4 of eligible taxpayers using the program in the 20 24 . And in response to the the irs offered additional filing service, unfortunately, thank the Inflation Reduction Act, as you know, the irs now has resources to expand access to free simplified filing options which could improve task compliance and strengthen fairness attack system. Heres my question. What are the benefits of expanding no cost filing options for low and middle income taxpayers, and what action is the irs taking to make it easier and more accessible now for taxpayers to file the tax returns in future years . Yeah, so the main benefit is options. Different taxpayers have different preferences based on their preference, based on their position, in terms of how they will engage with the irs. We would love all taxpayers to engage with us anymore digital way, but not all taxpayers can. Some of them want to walk into our walkin centers, weve been able to walk into more wall considers with the Inflation Reduction Act. The benefit, senator, is options. Taxpayers need options, and the other benefit is, if we can implement these options, in a way that simplifies a very complicated journey that can often be very intimidating, and we have created a true benefit to americans, and that they have optionality, and we have made their job easier have complied with the code. Thank you. And the Inflation Reduction Act does provide us need resources to be able to build those channels. Now i know there is this one question that is out there on direct file, and as i mentioned earlier, we are mandated by the Inflation Reduction Act to study it. I think when we produce that study, we will be able to discuss potential issues, strategies, what to do from here. All right, thanks so much, thank you mister chairman. Senator cassidy. Thank you. Commissioner, thank you for being here. During her confirmation hearings, i ask if the irs would consider having a Third Party Vendor to do your i. T. Management. At the time, i submitted for the record, news reports going back to the 19 80s where irs has requested lots more money, and then a lot of news reports that say, theyve not accomplish what they attempted to do. Its like christmas. Every year, irs wants more money for i. T. , and every year theres reports that its delayed. And so you suggested a openness to the concept then, and has that been acted upon, analyze, in any way encouraged . Absolutely, looking at our i. T. Strategy, i moving up my learning curve on where we are with our technology, and what ive learned is that there have been successes. Im very interested in those successes, and i can talk to you about them. Why am i so interested in the successes . Because what are the preconditions for those successes . Why were we able to build and deploy a successful modernized the file program. How did that happen . And then there are nonsuccesses. There are areas where we set out to accomplish something, for example, to fully modernize the individual master file, and weve only made progress, but we have not fully modernized it. And so that is how many years overdue . I mean you could look at different timeframes, but its years overdue in terms of being fully modernized, but there are elements of it that our modern. Let me just ask, because i have other questions. Has contracted with a third party such as the department of defense does, for some of the services, then part of the considerations . Yes, and one of the things that ive also learned is that about two thirds of our i. T. Spent is on contractors, one third on irs employees. That doesnt mean that that is the right level. Of course, contractors are separate the two going to the cloud with you raised that during the confirmation hearing, and im absolutely pushing the team to look at Cloud Service oriented architecture is like cloud as an alternative. Great, dont we to cut you off, i just have a limited time. Next, and in 2020, the irs proposed made final regulations regarding guidance on the definition of medical care. Under section 2 13 d of the irs code, essentially, the primary services, what primary services are and are not qualified medical expenses for the purposes of hsas. And the rules, the final rules, so that the direct primary care a quote expenses for medical care under section 2 13 of the code, because these payments are for medical care, Health Reimbursement rearrangements provided by an employer, generally mate to re arrangement payments. Thats great. It worked for businesses, but it stopped short of saying the same thing for individuals. And the irs still take the position that d. C. Arrangements are insurance, some sort of health plan. And so we have two separate treatments for a piece of, you see what im going with that . I totally see where youre going with that, but its a really good question. It was not on my radar stream and it is now. I want to get to the bottom of whether these things are insurance or not. I started to have conversations, and i understand the complication under their benefits to interpretation that would not have a treated as insurance, i wanna get back to you on it. I appreciate that. Secondly, my officers pushed, part of the reason for the backlog that they have the services that kind of fill up your phone calls with automated services, so that if you go to them to get through. And you had a Pilot Program as to how to address that. I was the pilot Program Going . It worked. Part of it is that we were able to get the reporting time down to four minutes, for the waiting time down to four minutes. Is that by taking off the automated calls . Its part of that reason. And so is that pilot going to be expanded to the entirety of this, because i was told it was pilot, and it is now become i cant say, we are gonna continue to leverage that type of solution to make sure that we are preventing that practice, because that is not a fair practice. Yeah, it seemed like it should be we had success. The bottom line is, you always want to replicate that success. Were very interested in figuring out why it went out right and how to scale. It sounds great. Then you are finally, one of the private sectors obviously, the filing returns for people, but do receive a conflict of interest where the irs, which is going to tax people, its also helping them develop their forms. The interpretation which an independent file or may take on their behalf might then be taken in a different way . Its an important question, and i think its a policy question actually. What i want to do is answer the questions like, what are the operational implications of a direct file program. The idea that the irs would be more involved and tax preparation through a direct filing, i think other countries do it, it is a debate. I want to weigh in on the debate. I want you in the Treasury Department and the president to decide, and then well figure out how to administer it. Thank you for great answers, i yield. I think my colleague. I think he missed some of the other discussion, because i am senator ben cardin, senator warren, have asked questions about prefile. History this is pretty interesting. Down at the end of the dan coats was with me on a bipartisan file proposal, years ago and of course all of the powerful interest came out and said western civilization was going to end, and we tried to simply say, it would be voluntary. In other words, all parties agreed if you go forward with such a thing, the people move in, oregon, everywhere else, we will be an option. It will not be required in any way shape or form, and so we look forward on that discussion, i thank you. Senator menendez. Congratulations senator, you confirmation. Over the last, year i let eight letters to the arrest about a range of Customer Service issues impacting taxpayers. Just as the irs expects taxpayers to follow on time, taxpayers and Tax Professionals should be able to count on the irs to answer the phone, responded questions, and process refunds in a timely manner. Thanks to the resources provided by the Inflation Reduction Act, the irs has hired 5000 new Customer Service workers to help meet taxpayer needs. It is now consistently answering the phones, as i understand it, between 80 90 of the time, i dont average speed of four minutes compared to last year, when the average level of phone service was 17 with a speed of answer rate of 27 minutes. So thats good. But theres still more work to be done. Currently, it takes approximately 20 weeks to amend paper and electronic returns. Commissioner, can we expect a more acceptable timeline for the irs to process amended returns. You should expect, it and we should be held accountable for it. I mentioned earlier, we have the ability post Filing Season to redirect some of our staff and the backlog, versus being on the phones, because the call volume should be going down, and that lead us to process more. Were skating or paper forms, and the more that we scan, easier it is to make the process more fluid, and theyre a longer Term Solutions to help process these paper unamended returns. And Building Technology solutions to more automated, because right now in most cases, we cannot accept a omitted return, the Inflation Reduction Act is not just about managing the daytoday. It wasnt supposed to be about that. Its mostly at modernizing, and i hope that we can observe those funds with the inflation reduction. And so with all of, that what can we get this down to, and what time do you think . As an example, i mentioned that on the retention credit, i mentioned senator warner that we are trying to resolve 20,000 a week right now, post finally season, and i am asking the team to double that output, and to focus on the oldest first obviously to make sure that those have been waiting the longest. But i appreciate the question. It is part of the challenges that we have in terms of this paper bog, but were making progress. Directing the small mistake should not lead to receiving a refund. And so im part of the progress that weve made, but we need to do better. Its a let me ask, you with reference to the joint report from stanford university, the department of the treasury, found that black taxpayers are at least three times as likely to be audited by the Internal Revenue service. The arrest is not like data, or on race or ethnicity, and reports of just that the disparity is attributed to discrimination in the irss computer algorithms that select returns for audit. The report also found that the irs disproportionately audits people who claimed the arent income tax credit. So commissioner, last time your before this committee, you committed to providing a report on this issue within 60 days of your confirmation, that would be may 9th, and so were not there yet, understand that, but with that commission, it three weeks away, what have you learned about the issue and how is the irs planning to address this inequity . I will start with the important premise that it is essential that our tax system is fair, fairness is what anchors our mission statement, and when i got the director from this committee to issue a report in 60 days, i engage with my team on day one to make sure that it is a priority to fully understand what is going on with this report from stanford and how do we get to the bottom of it, and what are we doing ahead. I dont have the final report, because its not done, yet but i will share that we are asking the right set of questions, and we have the questions of like what are the major tenants of corrective action for improper payment, to existing eitc case selection process, unfairly raised audit rates for by taxpayers in relation to non black taxpayers. Theres about six or seven key questions that we are entering. Are you still committed to providing this report by may 9th . Absolutely. And finally, while were on the topic of tax equity in tax administration, the irs contracted with for Verification Services, this tax season, despite a track record of inequitable outcomes from minority taxpayers. When can we expect the iris to use. Gov for Verification Services . We are very interesting and i did digital authentication providers and login. Gov is one that were interested in. Its my understanding that they are working through at gsa some Security Issues that they want to make sure that they have wrapped up. Once those Security Issues are wrapped up, we will move forward with login. Gov as the one. Id like to be a big miss report when you are on your way to that. Yes, absolutely. Thank you. Thank you senator menendez, and for coming down strongly on this matter of the racial disparity, that was so striking when we heard the original conversation. If they got that kind of information when they werent looking for it, it just struck us that we better get on, it because if youre gonna look for, it could be significantly more serious. Its a thank you, look forward to working with you. All right, senator thom tillis. Thank you mister chair. Werfel, i appreciate the time that weve been in the office, i was one of the four members of this committee that voted for confirmation along with two others off of the committee. Because i think that you bring private sector experience, deep knowledge of the irs. If i was confronted, if i were back at my job consulting with inter flyers transformation, and i was assigned a client that was struggling to meet Current Service level agreements, trying to get Customer Service, right trying to get the technical people that you need, to fulfill the primary mission, of the organization, the first thing that i would tell my client is, dont think about a big new system that expands a responsibility before we fix the current fleming, which i believe that you are well qualified to do. Why shouldnt i look at all of the calls for free finally, as one of the address projects, and my transformation, when 70 of the taxpayers already eligible for free file. If my data is correct, anybody making less than 73,000 a year with a Public Private partnership that the irs has today, with tax finally in cities, they already have it, and so even if you felt like you need to get to 100 , why would you figure out how to play out that relationship versus build your own, and compete with the private sector with the need. Senator, it is an excellent question, and as we were talking, i was thinking, we have to keep the lights on. We have to be, there we have to concurrently build incremental improvements. And i get, it and you answer that question in a way that will satisfy me, and sondland is typically the two going to give me a good answer, because i want to move on. And so you are confirmed, and can you tell me whether not you believe that the irs has the authority, without the new appropriations, to develop and implement a system for the service to prepare returns for taxpayers or allow them to directly, fiedler with the services in the government run software. I know theres 15 million out there to study it, but i got this question earlier, and i think the committee will come, back because the remit under the Inflation Reduction Act is for us to assess the feasibility, and most often, we are doing that because i suspect that you dont have, i hate cutting people off, but i want to take my time. But i suspect that you dont have the appropriate authorizations and funding, and so now, were going to take our attention away from your permission, which is to transform the irs and say we also want you to focus on this other big project, which really doesnt have a lot to do with a lot of the kpix you need to be working on now. And so last question, related to this, recognizing welldocumented leaks of taxpayer information, outdated computer technology, what is your assessment of the Service Technical capabilities to develop a complicated program that would actually do that . Or do you view that as an Implementation Risk for all of the other big rocks that you need to turn over as soon as you need confirmed. I think ive said it during my confirmation hearing, it has to begin and end with data security. Its fundamental. People have to know and trust that their data and we have some credibility issues to deal with there. There are mixed results. Like ive looked at, it and i said okay, tell us about our technology. Well we successfully defended a billion cyberattacks a year. And we need to continue on that path, because one success at the time. Lets hard in the base that we are already stewards of. Prove that we can do that on the same basis, and then decide whether we will dramatically increase that base that would be subject to the same vulnerabilities. I know that your Training Experience in the private sector puts you in a position to say, we are asking things to move things ahead of the inflammation station to headline, theyre standing in the path of the things that i need to get done quickly. And i think Congress Needs to hear that, to understand, we dont do all of the prima when its technology, cybersecurity, everything else. If we dont focus on the primary goals, so the taxpayers can be more satisfied, so that your satisfaction rates can go up, we will look at this. Last thing, and i will submit a question for the record, but also on the tax gap, it is going to say that its all about finding a handful of billionaires and trillionaires, if there will, one it will be one soon, and the right is going to say, oh all youre doing is hurting Small Businesses with the tax gap, but we dont have the information to even know that. I ask a simple question. Lets stratify all of the people that contribute to the tax gap, so that we have a distributional and alice s of where we need to go after it, and i cant even answer that question. So why is it that i cant give an answer when someone says that we have a trillion dollar tax gap, that i cant have at least at the 30,000 foot level, what bucket they fit into, because i think were talking past the fundamental issue. If somebody owes we can have a separate discussion about whether not that tax should exist, but to the extent that it is in the tax code, then the taxpayers need to pay it, and we can work on repealing it. But i really need more information, at a more granular level, then a trillion dollars, so that i can start applying a rationality test to some of the statements that are coming out of these committee hearings, and of the mouth of my colleagues, because i dont think that they actually have the data upon which they can base some of these assertions. Im going to try to serve the meeting to come with you. Would you commit to having a meeting in your office to go through your Enterprise Transformation plan. Absolutely. I look forward to, it thank you mister chair. I think my colleagues, just to give them 30 seconds with history before youre on the committee, the reason that the tax cap issue was so relevant over the last year is because it wasnt some member of this committee, a democrat or republican, but it was donald trump commissioner who held the post of this, and with Chuck Redding, who has been a long time out of there, he is the one who made the statement. That could be up to and b, it was his opinion that it was overwhelmingly due to those who are extremely wealthy, because of the argument, and ive certainly made, it that for somebody who is a trucker, for example, in oregon on north carolina, the government actually has the information and the vast majority of cases. And share, thats why i find that extraordinary that i cannot get an answer to my question. If people have made that assumption, and hopefully someone who made that statement actually had extra data on which to base that statement. And we dont have it. And so whether it is the Trump Administration or the Biden Administration or obama or bush or clinton, that doesnt matter to me. What matters to me is that i havent seen anybody share that with me. And so all we have is a trillion dollar number in a great political whipping boy, but i want you to do that. Im here to solve the problem. Even if it is applying a tax code that i disagree with, if you owe it, pay it. But lets get more strategic about the way that we go about dealing with it. If we want to solve the problem, if you want to keep it at a highlevel and use it as a talking point in the committee, that is great, but if we want to solve the problem, we have to have data to drive our priorities. Thank you mister chair. And i would only say, my colleague is absolutely right, and saying that it is smart to get more detail. And as you and i talked about, an example of a detail is our Credit Suisse investigation, where Credit Suisse got busted a decade ago, and our investigators found that theyre doing exactly the same thing. So we have hard information on it. And so as you seek to get more detail on, it put me down and im happy to work with you. Okay, senator. Thank you so much mister chairman, thank you for being here, and we visited in my office, and when you hear for your nominating hearing, i asked you for your opinion on the Funding Priorities in this reckless tax and spending bill. I express my concern, about 80 billion dollars of additional funding for the irs, specifically, we talk about the enforcement amount versus the amount for Taxpayer Services. 45 billion for enforcement, and only three billion for Taxpayer Services. And so the ratio of 50 enforcement for every three dollar, 1 of services, and they are a Strategic Operating plan for the spending of all of this money, the first objective that you lift is to dramatically improve services to help taxpayers meet their obligations, and receive the tax incentive for which there eligible. But the money ratios 15 to 1 enforcement over providing for services. And this doesnt even include the additional 29 billion request for supplemental funding that you have come up with. Its why would the irs in its discretionary budget, request, despite 45 billion in funding for enforcement, request again more money for enforcement, 5. 9 billion, then its requiring for Taxpayer Services, 3. 4 billion . Really portion of the question, so think its important down on budget. In a way that makes sense and can be understood. So our base budget pays for a daytoday operation. The volume of things that come and go from a services and enforcement standpoint and as i explained my testimony, if you look at our base budget over the last ten or 15 years, it has been a steep decline while the u. S. Population in the tax laws and fillers has all but much more complicated. So when covid hit, everything kind of broke, and at that point, it was basically, we cannot do and continue to manage the way that we would want, and services plummeted, and frankly audit rates plummeted. And so what we need to do now is not think about the Inflation Reduction Act as, lets use that to patch the holes and our base budget, because what the Inflation Reduction Act does is its spins for increased capacity so that we can improve operations. The difference, senator, between just answering the calls versus having a call back option, having more Digital Channels, having more bots in the phone lines are the people can get through quicker and things that they can do an animated way. And so now, to your question, look, there is room for us to increase our capacity and enforcement. The stats on this are pretty eyeopening. We only have today, 2600 staff that are responsible for existing compliance with the highest wealth tax payers, and theres more than 390 high wealth tax payers. And so to give you a ratio, that is one irs person for every hundred and 50 high wealth tax fares, and these filings are big and complicated. There can be thousands of pages, tens of thousands of pages long. And so, look, if we started to move money out of enforcement into services, we would lose the ability to develop the capacity in that area, and that ratio would suffer. And so the reality is is that we need to do both. It is our job and our role to make sure that the tax system is operating effectively. Answering the calls, improving the calls, but also making sure that people pay what they owe. Because we discussed, and what i hear about in wyoming, people call the irs, trying to get information, cant get somebody to answer the phone, and all of those issues, and so sticking to the issue of Taxpayer Service, when you look at the justification that youve had for this fiscal year budget, it says quote, unless the irs realizes sustained increases in discretionary funding, Service Quality is going to continue to suffer. I still dont know why the irs, its plea for more money in its budget requests, threatening Taxpayer Services instead of wanting more and more money for enforcement. That is why im on that. The other issue is the long awaited Strategic Plan for the socalled Inflation Reduction Act. It is well documented, very late, and despite the extra time, they pull together this highly anticipated plan, and its lacking, and a measurable targets, and basically, to summarize the indicators that we will do better. And so, the wall street journal reported that the deputy treasury secretary, while referred to the plan, and he says, we dont want to be locked into numbers on a piece of paper. I would just tell, you mr. Werfel, every taxpayer in this country believes that they are locked as numbers are piece of paper that they can go to jail. That is the difference, but if you are assistant deputy secretary doesnt think that you dont to be locked into numbers on a piece of paper, i have taxpayers all around wyoming who have very similar concerns. So thank you, thank you mister chairman. Thank you colleague. Senator casey . Mister chairman, thank you very much. Commissioner, good to be with you. I want to start with a program that is a little known, and probably underappreciated, but has enjoyed Great Success. And its not a program that many people have heard about, the socalled vita, via, volunteer income tax assessment program. And so i was just up in, not far from where i am in northeastern pennsylvania, strasbourg pennsylvania, and the pocono mountains and i met with a group of volunteers who work as part of vita and we know that last year, vita had held nearly 2 million americans to their taxes and claim tax refunds for free. The tax returns are very very accurate, and its volunteers have a 96 accuracy rate in preparing returns, well paid prepares have only a 40 accuracy rate, according to a g. A. O. Study in 2014. And so 96 accuracy rate versus 44 and you get a great bang for our taxpayer buck. The irs spends about only 21 per return to prepare through vita, and ten times that much, about 220 per return for tax preparedness. Its clear that vita is a great deal for taxpayers, and we can get results from it, and it states taxpayers time and money, and penalty fees, and it saves the irs time and correcting incorrect returns. However, the irs was not specific about its plans for the Vital Program and the Strategic Plan. What does the irs plan to use the infusion of funds from the Inflation Reduction Act to improve the volunteer Taxpayer Services. And thank you senator, and i agree with you, it is a critically important and successful program, i was pleased to see that the number of vita prepared returns increased. It was one point million last taxes, and its over 2 million this year. And so it is nice to see the program expanding. Part of what we are doing in the irs is working more towards engaging these types of programs, and stakeholders to meet taxpayers where they are, and better understanding how weak can land that helping hand sacks fares, how they need it. Do they need a more Digital Channels . Do they need more help from trusted partners like vita, it absolutely has to be an area of investment, and i can provide you with more details in terms of how we might scale or invest in that program but it absolutely is, im a personal champion of that, and i will continue to work with them. I appreciate, that and i want to sleet you and your team on the Great Success that you have had in providing better Taxpayer Services. The numbers are very compelling and irrefutable about Better Service in the investment that we made. But another area i want to ask you about was the bonus tax credits in the Inflation Reduction Act. That reward companies that are either building new Energy Projects and coal communities, thats a provision that i worked on push forward, or companies who use american manufactured products. So we dont want to just improve supply chains generally, we dont want simply to create the Clean Energy Future which we have to create, but we want to make sure that we can have the elements of those energy products, the content of them, made in america. We know that last, year we gained almost 800,000 manufacturing jobs, or i should say over the two, years and we want to build on that. And so we need strong domestic content rules to reward companies for building their Energy Components in america. Not good enough to have a Clean Energy Future if it is all going to be built by some of the country. For example, like china. However, there is an treasury have not released guidance on how companies can claim these bonus credits for domestic content. So i would ask you, can you commit to working with me to release a strong and clear domestic content set of rules very soon . Yes, absolutely, and we have, ive talked to the team, and they are working on that very guidance document along with others that are coming up in the next few months, related to the Energy Provisions in the Inflation Reduction Act, and so the answer is yes, senator. Commissioner, thank you very much, i wasnt a question too for the record, but thank you. Commissioner, or waiting for a moment for senator maria cantwell. I do want to take up for a minute, just as we wait, this last point with respect to these communities, that he is speaking of, and designing the Clean Energy Tax credits, and this is something i was involved in for a full decade, joe manchin, we allowing him to come to west virginia, and said todd young that we were gonna come up with a tax code there was technology neutral, so has to be market oriented, and be a system that would reward those out there who would reduce carbon emissions, and we have a number of senators in this committee and elsewhere saying, i want to be part of the future. I want to be part of something better, but we have to make sure that we have tangible concrete tools out there, for communities that are serious about being part of the future, and want to be know how to do it. Senator casey with the efforts, and we call the incentives program, sometimes we call it the bonus tax credit provision, and we said, very bluntly, that these communities had to have an opportunity to be part of the future. Like with senator casey, senator browns, and others. And so i want you to know that we are going to be with every step of the way until all of this is fully implemented, and with the other side of the coin, the energy communities, you just keep raising it, i will be pushing for you every step of the way. Okay, senator cantwell has joins us. Please go ahead. Thank you mister chairman, appreciate it. Appreciate being at this important hearing, the particular this time. Last week the irs announced that we are nearly 1. 5 million americans have unclean tax refunds from 2019. And washington state, the pandemic and other disruptions prevented as many as 22,000 people from violent of 2019 tax return, leaving a total of 44 million in on claims refunds. When you hear last february, sorry, the irs, use of the irs should be able to communicate in a much more timely in aggressive fashion for taxpayers, and i agreed with that, and in april 12th, the unplanned refund that you stated frequency students, parttime workers, and others with little time to realize this. And so what, i know that to ensure these individuals have the money that they owe, then each be ahead of the july 17th deadline, and so what is the irs doing to create better Public Awareness for these unplanned refunds, and you have plans to reach out to individuals, to make sure that they file before that july deadline . Yeah, and i was pleased with the type of publicity that was created when we announced the delight deadline. A lot of Media Outlets covered it, and basically said, look, that the irs is informing you that you are eligible for a refund, and you should come, because we are warning people that are eligible whether it is for a credit or refund, to claim it. Now, how do we continue to build on that outreach, and there has to be more than we can do than just issuing a press release. We can use social media, we can engage with intermediaries, and associations, and groups, and this is part of the vision that we have for improve Customer Service. Its not just, hey, we are here, we can answer your call, thats part of it, thats critical. But its also a reach to meet taxpayers where they are, and so it is too way. It is a sphere when you need us, whether it is in an assistance, a walk in center, or the call, but also, we want to meet you where you are to help. To help Small Businesses meet their obligations. Sorry sir. How many taxpayers you estimate are missing or receiving the earned income tax credit because they failed to file on 2019. Overall, besides our state . I think we have an exaction ember, but we believe that its over 1 Million People that could be cleaning refunds, but i can try to get your more precise number. I mean just give the numbers in our state, i would think that that would easily make 1 million. Again, i think we communicated also about this notion that when it comes to owing money to the irs, we have a lot of direct communication with people. And so i am for creating a more virtual experience for taxpayers, particularly by segmentation. These are the problems, these are the issues, right . I know you have frequently asked questions, things of that nature, but i think that the response from the irs, and direct communication, and i appreciate that. All right, thank you mister chairman. I think my colleague, and we are going to liberate you momentarily, commissioner, but i just want to give you my sense of where we are. The reason the tax gap is so important, and i started talking about it, its come up repeatedly, is that looking up all the data that we have with Chuck Redding and others have said, hes closing the tax gap cannot really be addressed, unless you also beef up enforcement against those very wealthy individuals, who are not paying taxes. Second, i think you have made the case with respect to improving Customer Service, and i think that you have done it in a appropriate way. You have not stood up and shouted that we have done, we are done, but you have said, look we making a lot of progress here, its high time that we did in terms of the calls, and the waiting times, and the backlog, and i like the fact that weve made it clear that weve a lot of heavy lifting to do, nobody is having a victory parade today. And your comments with respect to auditing of taxpayers, again, and comes below 400,000 were going to clearly make progress compared to what we saw a few years ago, and i think that that is important objective as well with the release of the Strategic Operating plan, weve got a opportunity to really do this right in terms of making sure that we protect people, and you cannot be suggested with it, going after the high income individuals, and corporations, partnerships. And so one last point that i think i have touched on is that when i look at this question of the high fires and the people that have repeatedly skirted the law, i am especially focused on the irs going after repeat tax evaders. What people asked me, when i hear about Credit Suisse, they said ron, you are kidding me. I read that they got busted just a few years ago, and their ceo came in and raise their hand and said, never going to happen again. You cannot explain the taxpayers how youre not doing anything about it if it happens again, and you basically, we actually give them a discount on their penalties the first time, because they made all of these claims that, we will be honest. And so how you deal with these repeat tax evaders is particularly important to me. I want to close with three quick points. Tomorrow, the finance members will have a briefing by the commissioner, commissioner werfel on the Strategic Operating plan, give you an opportunity for numbers to ask additional questions. I incident menendez both ask each day about this question, and the racially biased audits, very troubling, and from the very first day, i asked about whether it would be on time, and for a repeat response, you said you bet it will be on time, which is good to be something that members Pay Attention to, because youre following through. With respect to, that we will follow through and say for the information members, questions, and for the record, im going to be due by 5 pm on wednesday. That is on april 26. Mister chairman, before you gavel close, i just want procedural point, which is that i mentioned to both you and senator mike crapo that after the plane was issued we had questions from congress, both authorizes and appropriators about questions, where we have been providing information, and as a result of providing that information, there is now available to you tenure spin numbers over the life of the i. R. A. , more detailed fte nimbus over a threeyear window, but i realize that, as we provide that information, it is not simple for you to know where it is, and so we put together a compendium of that, and i would like to introduce that for the record, so that you can have a one stop shop for, it and the public can see it as well. Without objection, the welcome news that there will be a one stop shop is introduced in the record at this point, and we will look forward tomorrow as well, and again, i dont want to thank you for saying that you are going to be hands on, and you are going to follow through. That is with jobs although. And youre saying that is your focus. With, that we are adjourned. Thank you