Have stuck around because they know its a new day. We have some amazing current priorities and staffing, some hiring plans and what is on their desk. And what we can expect in the year in two years to come. Let me get right to introductions. To my right is mary beth murphy, commissioner of Small Business and selfemployed division of paris based in washington d. C. To my left come immediate left is don fort chief criminal Investigation Division ira sent to my far left is nina olson tax tier National Taxpayer advocate. Their bios or on line and if you want to review them they are amazing. They have done tremendous work on behalf of the taxpayers of this country and its going to be really great evening. Let me start by having each of them talk a little bit about the state of the irs and their divisions and then we are going to go into some q a and certainly opened up to the audience for any questions that you might have. Marybeth, can you kick us off . I want to thank the ada for inviting us today. Im the commissioners Small Business selfemployed. Im in my 60 or so one of or so one of the ground that are team i think nina and i nina fischer as the youngest longest tenure but i have found one of the longest commissioners. What are we doing at ses see it . Sase has an interesting role. We are charged with in our mission to help Small Businesses and selfemployed taxpayers as well as all 1040 taxpayers understand and meet their tax obligation. While applying the law in doing it with fairness, integrity to all taxpayers and when you think about that think about the number of taxpayers that we serve. Our Customer Base is huge and it is such a diverse work group. As a go around the country and see the work that we do sometimes i think i cant believe we do all that we do whether specialty tax, employment tax, excise tax, are exempt spaces unbelievably complex and then on the collection side we have seen a lot of changes in collection. We are responsible for 57 million returns filed annually, 6. 8 million corporate turns, 27 million employment tax returns, 875,000 excise tax, 249,000 estate and gift tax returns and then trust as well about 35,000. We have got a big job in Small Business. Carolyn mentioned the modernization plan and the new commissioner and i think they really go handinhand for us. We really need to increase the use of technology to really change the way we do business especially in Small Business selfemployed were. We have to bail them power our employees as well as taxpayers. If you have the opportunity the modernization plan lays out some great foundations and then one of the things that we are going to be working towards her in a couple of years and im going to talk about a few of those but you are going to hear some common themes in one of them is an appropriate talents of enforcement and Customer Service and we cant do that without engaging our employees. They meet facetoface. They are the face of air is whether its facetoface contact or over the telephone. We have been working hard. A couple of years ago whenever big pushes for a future state that has evolved into her modernization plan as well as our strategic goals and really getting our employees focused on that and listening to them as we go forward. This last year has been really big for sesc her biggest priority was tax reform. We were responsible for 29 provisions of Small Business. We didnt get any extra to do it and i think we have a great team we are on track and on target but i would say we are in the process of getting ready to train and our commissioner said we are going to put our training out. Its not out there yet on line but we are working with second occasion folks as we finalize all of our training so you will know what we are training folks on as it relates to tax reform. And the 29 provisions we are responsible for. Other priorities for us its been hugely successful for us. Its a great program. Taxpayers come to us. It amazes me the number of full pay taxpayers we see on a weekly basis and these are taxpayers that have large balance as well of small so that program is working well for department of state and really havent had any problems. I was like to add has anyone here had any taxpayers with the tax case . A couple. So we are continuing to work that program. Hopefully it went well and you are able to get it resolved and processed. Our nonfiler strategy with a reduction in staffing we have taken a hard look at nonfilers and thats an area where we are looking for stakeholders to help us to figure out what is the best way to get these people to file again. We are looking at testing. Many of you know some of the programs we have some of the return programs. Thats a very laborintensive program for us as well as for taxpayers as well as practitioners. We are looking at the refund whole program and how we can better make decisions using data and really looking at data instead of doing things the same way. Youll see some initiatives out there. We are looking right now at educational letters for taxpayers so we have got nonfilers stop filers and how to do we get those taxpayers back in compliance . Another priority for us is disaster relief. We have been lucky we havent had many fires were storms. Sbsd is responsible for those programs as well across the iras as well as penalties and interest. Another area where focusing on as well is taxpayer digital communication. We have been doing unauthenticated or not authenticated chat with taxpayers to answer basic questions. Hopefully in the future we will be able to use automated responses to give taxpayers basic answers to questions that they have so we are doing text chats at acs and the small number of single issue audits in our correspondence examination area and we hope to grow that to do more. They have to authenticate themselves and there are some challenges in security is paramount that we are hoping to continue to increase the number of Digital Communications that we can do is taxpayers. Thats the state of sbsd. One big highlight for us is we are hiring revenue officers and revenue agents. We are currently at 18,200 and Small Business. Our goal is to get up to 20,000, 22,000 by the end of september. We have had challenges. His mentioned we have seen a number of folks. We make offers and they declined and they get better jobs in the job market as well as different areas around the country. Its really expensive to live in new york city, to living californians live in the boston area. We have had some challenges that we are on track to hire 750 radio officers and 1200 revenue agents, new hires so we are excited about that. We Party Started with the revenue officers in the first week of training and we will be on boarding revenue agents by the end of the summer. The government lacks in funding. They canceled his meeting once. We are just catching up but we are really excited to get those new folks on board. You mentioned may maybe higherpaying but not better jobs. Yes, higher pay. Okay thank you for that update. Let me turn to nina. Can you tell us about whats happening in the Taxpayer Advocate office . Well, this is on the clock. I will be retiring on july 31 after 18 years as the National Taxpayer advocate so this will be one of my last public appearances. Ive been obviously spending a lot of my time trying to think about how to prepare my office to hand it off and ensure that the work we are doing for taxpayer rights continues. That is my focus and ive a very short list of some issues that i feel like i need to tidy up before leaving. One of the things that has happened to us over the years, when i came in 18 years ago we had 2200 employees and 74 offices and we are down to now about 1650 employees spread out over 79 offices. We have actually been shrinking our offices over the last five years. The number of employers and offices so he can open up more offices because we believe that the irs becomes more and more centralized and disappears from having a geographic footprint around the nation that we need to be there. Congress has actually said my mission is described in the Internal Revenue code at 7803c of the code. We have to have at least one office in each state so we have been opening more offices that are smaller and the most recent one has been el paso, texas which i will visit before i leave. Im really trying to get out there in the community with your employees which is very difficult because we do not, unlike espy or cia or anybody else who gets to decide how many cases they are going to start in a given year we dont. The taxpayer is experiencing significant hardship they call us in the case comes in. Sometimes my office has tried to reject the case but usually people try to email me because my email is all over the place and they let me know my office has rejected them and then they get into the system. Congress has told us taxpayers are experiencing significant hardship as a result of what they iras dozer isnt doing or is about to do. I dont know how to say you are experiencing significant hardship they dont get through the door. I dont have to do that so it difficult for employees juggling some of these cases. Some of this is brought on by some problems and systemic problems with iras in simple cases but you know they take the peoples time. We are hoping, thats where were concentrating on some fixes in their fraud detection system. As you file returns and youre asking for a refund you go to their fraud detection system and it has a very high false positive rate. 81 of the nonIdentity Theft returns last year that were identified for questionable items not related to Identity Theft but like inflated wages or Something Like that are just a mismatch of information, 81 of the returns the irs got were actually determine legitimate. Thats an abominably high false positive rate. We have been really focusing systemically to get that fixed because that has been the largest portion of our cases. They have increase by 287 last year from the year before and we can get them cleared out of our system we be able to do a lot of good things. Mary beth mentioned the modernization plan of this is something in my annual report to congress. I made the number one legislative recommendations of the iras native multiyear funding in order to replace this archaic 1960s based database or the irs has the two oldest databases in the federal government according to the Government Accountability office and they happen to be the individual master file and the business masterfile which are the two official records of the taxpayers account. Lets just stop and be afraid of that. So we really need to modernize the databases not just list them but actually replace them and all of the plans on the modernization plan hinged on us getting in to 21st century technology. If we get we wont be able to deliver meaningful accounts for taxpayers. All of those times when you call up the iras people on the phone and the person says, i know you contacted us or send something in but i cant see that information. Its because their systems dont talk to one of us all of that needs to be change in Congress Needs a fund that with the multiyear stream so we you dont just start and stop and start and stop and never get ahead. On the topic of digital and this is something ive been focusing on a lot with all of the commissioners that ive worked under all five or six or seven depending on if you count the active ones 41 million taxpayers in the united states, taxpayers people of file the return of the last three years based on ours to statistically representative survey of u. S. Taxpayers that we did two years ago, 41 million did not have Broadband Access in their home. 41 million of the 650 million taxpayers that we have filing returns each year. Any strategy in a modernization strategy that does not understand that you have to provide in Person Service for taxpayers persontoPerson Service and on phones as well as moving to digital is going to not serve the taxpayer is going to create harm to them that mary beth spoke about and theyll have to do it the downstream consequence. One of the things that ive been thinking about in terms of a Digital Future and i will just throw this out and turn it back over to carolyn is a 10 noodling about it and will probably write it to my reporting congress in june comes something up and calling taxpayer anxiety index. That is a way of thinking about how you want to communicate with taxpayers from the taxpayers perspective. Lets say taxpayers are perfectly comfortable in a file their return. They are willing to go in and check on line and you can do an analogous situation. You all are practitioners. Send something and you to have access to taxpayers on my account with your client you could maybe check and see that document has been received and you are fine about that. Go in and thats great. That saves you a phonecall but lets say you are waiting for response. Your attacks here waiting to get your refund. They go on line to check in the message has changed or the message is the same or the message goes, we are looking at here return, check back in two weeks. Suddenly that clutching feeling in the throat of the taxpayer, your anxiety is just increased and you may even be willing to check back in a few weeks but if you dont get an answer youre going to pick up the phone and try to force people to digital when what they need is there anxiety is increasing all along the way. Its going to actually undermined exactly the kind of thing you are trying to do in driving compliance. The practitioner now, you get in there and you can see those documents have been received in iq are waiting for a response. You get their response. You are going to want to call. Youve got a paying client and you also want to know what the irs is thinking about what that document. If you give push to on line and you can get to a live human teen to have that discussion there may not be a meeting of the minds. And so understanding where anxiety levels are and where you need to have that persontoperson interaction should be the driver of our modernization plan. I fear with the budgets the way they are in the driver of their modernization plan is how many people we can get on line because that is cheaper and eliminate some employees that would be answering phones etc. So i think i am watching that like the hot weather inside the irs are outside of the irs. I dont quite have the same sanguine view of the private set collection. International issues, offshore issues, people trying to resolve multiple International Tax issues with regimes that have very different concepts of taxpayer rights and dispute resolution. Those are all the things ive been looking out. Spent this is her last appearance in her tenure and its been an amazing tenure as attacks. The kid and we are extremely fortunate to have her here tonight. Theres a treasure trove of information out there. Lets turn now to the ci speaking of taxpayer anxiety. Don fort is a career agent of 28 years with the service and no one knows c. I like don does. We are so lucky to have him as chief and deputy chief eric who is in the audience former agent tom bishop is in the audience. I is a great waste to be not as a target that as an agent under his leadership. Thank you carolyn. I appreciate it. I am a morning person. This is my favorite time to speak and after that i just came back last night from a 10 day trip to scotland and ireland but it feels like its about 1 00 in the morning so he may need some good q a to get things going this morning. Its an honor to be here with my colleagues with nina nina and mary beth. We dont do this and often carolyn ive had the pleasure of working with for a number of years and i know many of you out there do. I am 28 years with ci. Im a cpa as well and have had the unique experience of basically having almost every position within ci. A unique experience knowing basically every corner of the organization and all the work that we do so it is a really exciting time and talking about some those priorities and initiatives. Its a great year for us this year. We celebrate our 100th anniversary as a Law Enforcement agency. Not many Law Enforcement agencies can say that but starting with six agents 100 years ago an incredibly rich history within ci so its an incredible honor to me. My 28 years there havent been many of those years that ci has not been my career. A lot of good things going on. Some of you are familiar with it not give you a quick overview of the work we do. We are the only agency that has jurisdiction over federal tax crimes so if you hear about, read about any federal criminal tax case there is a 100 chance of ci was involved in it. We have a much broader jurisdiction than that. Id also like to say we hear of any significant financial investigation Money Laundering, a cyber case theres a good chance of ci was involved in that as well. I talked about the jurisdiction that we have. I always say believe we have one of the largest and broadest jurisdiction of any federal Law Enforcement agency because of that. The ability and being the only agency that has a Tax Jurisdiction. Having jurisdiction over Money Laundering being involved in literally hundreds of offense to Money Laundering and we are heavily involved in secrecy cases. That being said my priority is to make sure we have got our core mission covered. The tax case being the only agency that can do that and being down terms of staffing. We are at 2100 special agents now and thats down from 360020 years ago so ive been here for the height and that in here now for the level we are at now as where we were 50 years ago. Think about some of you arent old enough to think about what the world was like 50 years ago but if you are about how many more people and how many bore tax returns were filed and how much more complicated the system is. So we have had a substantial decli