medical isolation room, the child or her children are assigned to that room with her, isn't that a fact? >> are you talking about a particular case? i'm not aware of that. >> generally. when a woman is assigned to a medical isolation room, her child would be assigned to that room as per the reports that i'll put into the record at this point. the mothers and children allegedly locked in a dark room for protesting detention conditions and also that's a think progress article. and also for the record, i'd like to tender a "new york times" magazine article entitled "a federal judge and a hunger strike take on the government's immigration detention facility." >> without objection. >> and you're aware of those reports of the hunger strike and the woman with the 11-year-old child who was placed in the medical isolation unit? >> and the assertion in "the new york times" article that there is barb wires at our family facilities which is not the case. >> in the medical isolation units, those units are the unit that this woman who had the 11-year-old child that was assigned to the room with her is a cell with a bed bolted to the wall and an open shower and an open toilet in that room. and it's basically a detention jail cell. isn't that correct? >> i'm not aware of that. >> you're not aware of that? >> i am not aware of that. >> would it trouble you to know that women and children because the mother participated in what's called a fast, others called it a hunger strike, but she participated in it and was assigned as a punitive measure to that medical isolation unit. would it trouble you? >> is that something you've also got out of that "new york times" article, sir? >> i received the information from republican as well as democratic staff who actually took a visit within the last two weeks to that facility and spoke with the woman and the 11-year-old son. >> congressman, if that's a fact that disturbs me greatly. i'm happy to visit with you regarding a certain instance. i cannot go into the specific facts of individual cases. >> ma'am, you have taken an oath. i'd like to ask you pursuant to that oath that would you supply me with the quarterly reports compiled by the detention monitoring council subcommittee per 7.5 subsection 7 of the directive title review of the use of segregation for i.c.e. detainees issued on september 4th 2013, as well as a list of all facilities designated for heightened review under section 7.5 subsection 5 of that directive? and also all surveys, audits, reviews, memos or other reports by i.c.e., opr, i.c.e., odo, i.c.e., odpp, d.h.s., oig or rcl regarding, one, the use of segregation in i.c.e. facilities and two the use of medical isolation cells in i.c.e. facilities and also the full contents of the segregation review management system, the database created by i.c.e. to monitor use of segregation following implementation of the directive? would you be willing to supply my office with those copies, and i'm send you a written request -- >> thank you very much sir, because i stopped writing. i couldn't quite keep up and included in that iq reportg report -- >> you will supply me with those. >> to the extent they exist. i couldn't keep up with the entire list but if you provide it in writing i will certainly try to run them down. included in that was what i wanted to mention was the ig report on the karns sexual allegations a made an investigation and decided there was not sufficient evidence to support those allegations. >> the gentleman's time is expired. the gentleman from iowa, mr. king, is recognized for five minutes >> thank you, mr. chairman. thank you, director for your testimony. i appreciate the chairman's remarks about cooperating with the committee prior to this hearing. i understand that you're in a difficult position in this job. i would note the irony that one side is angry when you enforce the law. the other side is angry when you don't enforce the law. and so i happen to be on the side of the latter. and i'm curious about a few things here. i noticed in your written testimony that you have participated in high level discussions with mexican government officials, discussing opportunities to more rapidly repatriate mexican nationals and then it goes on to the interesting part. i also met with government officials from honduras, guatemala and el salvador where each pledge to do our part to stem the tide of citizens of those countries. i think we understand in that committee what all that means. i'm curious on what you learned because we have passed legislation here in the house i think a couple of times that would require those kind of negotiations to establish i think i'll use the term an expedited return for those unaccompanied alien juveniles to the noncontiguous countries that i mentioned are in your testimony. did you see a level of cooperation there that do you think it would be possible negotiate those terms of return for the unaccompanied alien juveniles to those countries? >> actually, i think i mentioned in my written statement that we have actually in guatemala and honduras initiatives in which we have representatives of those countries here in order to expedite removal of people from those countries. >> is there anything in statute that prohibits us from doing that right now if we can reach that agreement? we don't have to wait for congress to tell you, do we? >> i'm not waiting on it. we're discussing this, as i said. that's one of the things i did early on. >> whose detion wouldcision would it be then? could director johnson issue a directive that we complete the negotiations and begin to return the alien juveniles to their countries? >> we're actually doing that now. we're negotiating. >> here talking. we're working hard with them. >> does he have the authority to the issue such an order? >> legal authority, sir, i just haven't studied that question. >> okay. then are you aware of an agreement between guatemala and mexico to provide for expedited transit for guatemalans on their way to illegally enter the united states and to grant in mexico that 72-hour transit permit. >> i believe there were discussions when i met with those countries in february to that effect. yes. >> and i recall a press release from a press conference held between the president of mexico and the president of guatemala who announced this agreement. i recall the president of mexico saying they hope to be able to complete such agreements also with el salvador and honduras. has that come to your attention? >> it has, yes. >> then i would ask then how do we consider them to be cooperative countries if they're cooperating with each other to expedite the removal of their own citizens across through mexico and illegally enter the united states? >> well, sir, actually the mexican authorities stopping central americans from coming benefits the united states greatly. >> i agree with that. but their giving permits for guatemalans to have 72 hours as well as they're in transit to mcallen, texas. i don't call that cooperating with our policy. i call that contravening. are they talking out of both sides of their mouths or is there something i'm missing through the translation in the agreement? >> i can't say that. what i saw in honduras and el salvador were sincere tofert tryefforts to try to help get their people back. first lady of guatemala looked at me closely and said, please, until we do, take care of our children. i took that to heart. because i think it was a sincere comment. that's what we try to do. >> we are taking care of their children. we're flying them from places like guatemala city into the united states now completing the human trafficking. eye find it ironic that just a year and a half ago december of 2013, when the judge wrote an opinion that there was a coyote who had smuggled a 10-year-old girl into the united states. they were interdicted. they prosecuted the coyotes for human trafficking and ice delivered the 10-year-old girl to her birth mother in virginia and to quote from the opinion of the judge, thus completing the crime of human trafficking by i.c.e. now we're doing it hundreds and thousands of times and buying plane tickets to do that. that's a bit breath taking to me, and i think it's got to be very difficult to take an oath to uphold this constitution and support the rule of law when you're watching above you it being subverted in the fashion it is and i'd give you an opportunity to correct me on my analysis. >> sir, we also have a humane approach to the law in the united states, unlike many countries. that's why i'm so proud to be a member of this country. and as part of that, we -- if there's a situation, i'm not particularly familiar with this one that you're talking about, where a family is reunited and doesn't present a risk to public safety or a risk of flight, then i agree with that approach. >> i would just say our policy reunited themselves in their home country. thank you, i yield back. >> the gentleman from puerto rico is recognized for five minutes. >> thank you, chairman. good morning, director saldana. welcome to the committee. >> i like the way you say that. >> pardon me? >> i like how you say that. >> understandably a lot of the questions so far in this hearing have involved i.c.e.'s mission to enforce our nation's immigration laws. i want to discuss i.c.e.'s equally important mission to disrupt and dismantle drug trafficking organizations. as part of this mission i know that i.c.e. works in partnership with other dhs component agencies like cbp and the coast guard, doj component agencies like the fbi and dea, and state and local law enforcement. you are an important player in a whole of government effort to combat drug trafficking and the violence associated with it. in january 2012 i met with your predecessor, john morton. puerto rico had just experienced the most violent year in the u.s. territories history. in 2011 there were 1,136 homicides in puerto rico. that is the equivalent of over three murders a day every day. it was roughly the same number of homicides as texas which has a population seven times greater than puerto rico's. as my colleagues can attest, official after senior official who have appeared as witnesses before this committee, i have been on a campaign since 2009 to persuade federal law enforcement agencies to increase the level of attention and resources that they dedicate to puerto rico so that these resources are commensurate with the threat. the reality was that the level of attention and resources from the federal government was, and i emphasize the word was, clearly defideficient and too often my constituents were paying the price with their lives. starting in late 2012, however, the tide began to turn under the leadership of secretary napolitano, dhs agencies began to substantially increase the resources they assigned to puerto rico. for example, the coast guard has dramatically increased the number of hours its planes and cutters spend with count ter drug operations around puerto rico and will completely replace the current fleet of cutters with faster, more modern vessels by mid-2016. moreover in, 2013, your agency, i.c.e., sent 30 additional agents to puerto rico where they arrested about 900 violent criminals and seized a great deal of illegal narcotics and weapons. in addition, dhs assign a border enforcement security task force, a multiagency team of federal and local officials be signed to dismantle criminal organizations. furthermore, cbp repaired the counter drug raider system in southern puerto rico which had been destroyed in 2011. along with congressman mike mccole of texas, i led the successful effort in congress to save the program from elimination and to transfer the program from dod to dhs. moreover, tsa has enhanced searches of luggage parcels and kor go transported to the u.s. mainland for illegal narcotics and weapons. finally, this year, the office of national drug control policy within the white house published the first ever caribbean borders counter narcotic strategy as required by congress. collectively, these efforts produced remarkable results. in 2014 there were 681 homicides in puerto rico. that is 40% lower than in 2011. 30% lower than in 2012 and nearly 25% lower than in 2013. you and your colleagues at dhs should feel very proud of this accomplishment because you played a major role. nevertheless, as i'm sure you would be the first one to say, we cannot relent. rather, we must sustain and build upon this hard earned success. puerto rico still has a murder rate that is far higher than any u.s. state or the district of columbia with an average of roughly two homicides each day. so i would like to give you the opportunity to tell the committee what i.c.e. is currently doing to fight drug trafficking and related violence in puerto rico our nations caribbean border and what plans i.c.e. has for the future. >> well, you have identified i think i mentioned earlier the successes in this regard including 32,000 criminals and 1.3 million pounds of narcotics. a substantial part of what we do in hsi because we're focused on transnational criminal investigations is in the drug area. i don't have the specifics with respect to puerto rico. i can certainly share those with you. but those outlined are of great concern to me because obviously it's harder to manage, but under the secretary's unity of effort initiative, you have mentioned the coast guard. you mentioned i.c.e., hsi in particular. obviously border patrol. all of these people and customs and border protection, all of us work together pursuant to the secretary's direction to try to make sure that these transnational drug smuggling gangs are not successful and we've had a number of operations in that regard. operation coyote operation identity crisis, all of these operations that go to focus on these kinds of smuggling operations of people and things. >> thank you. >> the gentleman's time has expired. i recognize the gentleman from arizona. >> well, thank you, mr. chairman, and thank you, director saldana for coming to be with us this day. i know that your job is a difficult one, and it's one that i would find formidable beyond words. i also know that a lot of the focus of this hearing has been the constitutional question of the president's actions, and for a moment if you could -- and i understand that you have suggested that perhaps his actions were within the constitutional purview. so for a moment let's put that aside. you took an oath to uphold the constitution that was part of your oath. if there were a situation from this administration or from any other administration that you found yourself serving and there was an executive order that you were convinced in your heart was clearly unconstitutional, which would hold your commitment? would it be your oath of office to uphold the constitution or would it be to subordinate the constitution to that executive order given that the president would be ostensibly your boss? how would you deal with that subject if it were circumstances where it was clear in your mind that the directive from the president was unconstitutional? >> well that's not a difficult question. i mean, i have always in both my u.s. attorney, my assistant u.s. attorney and my director oath have sworn to uphold the law, and if it were a matter as clearly as you say that something was clearly unconstitutional, i can't be a part of that. >> yeah. >> if you're implying that's part of executive action which i think you set aside, i don't agree that's unconstitutional, but with respect to your general question, isk i would. >> i appreciate the answer to that, and i think that's an honorable answer and i hope i would have answered the same way in your circumstances. i know there is the disagreement, you know, given zsh -- and that's the issue at hand. you understand some of us given that the president said 22 times himself that what he was doing was unconstitutional, i think he's put you in a very difficult position, and i say that sincerely. if i were in your place, i would feel in an uncomfortable position. article 1, section 8, clause 4 of the constitution specifically, specifically bestows on congress the duty to create immigration law, and this president has rewritten that, and i think that it puts you in a yes awkward position and i'm not going to ask you to respond to that because i don't know what i would do if i were you but it seems clear to me he's put you in an awkward position. awkward is being a very significant understatement. the president also said, and i know this question was proffered earlier that if somebody is working for i.c.e. and they don't follow this policy, there's going to be consequences for it. have you enforced that? are there consequences for not following that policy? >> there are consequences for not following the rules of an employee's status with the agency. i have a whole manual on that. >> what would the consequences be if someone in the position that was required to follow through with the president's directives, and again we'll set the constitution issue aside for a moment. if the president has done that i guess we can do that. what would be the consequences for doing that? >> well whether it's that directive or assaulting an employee in the office or not abiding by some other rule or policy, the range of punishment can range from anything to a verbal meeting where you council that person to ultimately what's available to any employer, and that's termination. >> yeah. so, in other words, there are employees that work with you that are subject -- potentially subject to termination for not following the president's directive in this particular case. >> for not following any policy or directive or rule of employment -- >> which includes the president's directive. all right. i understand. the difficulty of your position becomes even more apparent, i think. is it true that under the administration's new guidelines that aliens, and i say unlawful aliens i should say, have to be convicted three times for three separate incidents in order to be deemed a priority for removal? >> not -- they're all categories. it can be one serious offense. it can be three misdemeanors if that's what you're talking about. that's one of the elements in this card. >> so if -- but in this case you're saying so potentially it's not -- potentially it's not true. in other words, if they were convicted of a serious issue that could be basis in and of itself to be required or deemed a priority for removal. >> yes, sir. the offenses are listed in here. >> okay. is it also true that border crossers who came to the united states after january 1st 2014, illegally, those who overstayed the terms of their visas and are fugitives from that law are not required to be processed for removal through the program? >> the gentleman's time has expired, if you could just answer the question. >> 2c addresses recent border crossers, sir, 2c. aliens' apprehended anywhere in the u.s. after entering the united states and who cannot establish to the satisfaction of an immigration officer that they have been physically present in the united states continuously since january 1st 2014 -- and i also want to remind this committee that there's a general provision with respect to these priorities that give an officer flexibility in making a decision whether someone fits within the priorities and should not be removed -- should not be put in removal proceedings or does not fit and should be because of their public safety concerns. >> thank you mr. chairman. >> thank you. >> thank you. i will now recognize the gentle laid fri gentlelady from california, miss chu. >> thank you. director saldana, the recent expansion of family detention to 2400 beds is truly alarming. a vast majority of these women and children escaping the northern triangle region are fleeing domestic and gang violence and abuse. in 2011 el salvador had the highest rate of gender motivated killing of women in the world followed by ga watt mali and honduras. these women are escaping some of the most dangerous countries in the world to seek protection in the u.s. and instead they and their children face prolonged detention while they fight their asylum claims. in my view there's no way to detain families humanely. when i first learned that the average age of a child in family detention is 6 years old and that there are even babies and toddlers being detained i was truly shocked. as a psychologist, i know the mental health concerns that children and families in detention face. detention in jail-like facilities retraumatizes victims of violence and children in particular. reports show that children in detention experience weight loss gastrointestinal problems, and suicidal thoughts. in fact, dr. lewis diaz from the university of texas-austin interviewed several families at the karns residential center and found mothers and children showed high levels of anxiety, especially separation anxiety for the children symptoms of depression and feelings of despair. children showed signs that detention had caused developmental regression such as reversion to breast-feeding and major psychiatric disorders including suicidal ideation. the doctor further states in his affidavit that ongoing stress, despair, and uncertainty of detention significantly compromises a child's intellectual and cognitive development and contributes to the development of chronic illnesses in ways that may be irreversible. these very serious psychological concerns combined with the many due process concerns like prohibitively high bonds and difficulty accessing lawyers makes family detention a truly troubling institution. in fact, it runs contrary to the 1997 fluoresce settlement agreement regarding at that time in s' detention of children. the agreement said that juveniles should be held in the least restrictive setting appropriate to their age and special needs, and generally in a nonsecure facility licensed to care for dependent minors. and it said that detaining children in prison-like facilities have are both secure and unlicensed runs contrary to the very heart of the flores agreement. as we speak flores class counts petitioned the court to reinforce the agreement in light of the expansion on family detention. director saldana, given the concern regarding the mental and physical health effects on children around prolonged detention, i urge you to adopt a family detention policy that minimizes the lengthy detention of children and use more humane alternatives like alternatives to detention. i also want to say that my staff attended a live bond proceeding for a mother and her 5-year-old child who ha been sexually assaulted. the child was suffering from severe psychological distress while being detained at artesia including nightmares and bed wetting. the family had already been detained three months before the bond hearing and yet the 2014 priorities memo from dhs states that field office directors should not expend detention resources on aliens who are known to be suffering from serious physical or mental illness. so how do you reconcile detaining mothers and children with such serious physical and mental health illnesses in light of the directives and the priorities memo? if you could answer these two questions, the lengthy detention of children as well as the detention of children with mental illness. >> well i'm not going to comment on the litigation, but there are two separate issues. one is unaccompanied children who we do not detain. and those that are coming over with families. i said earlier that i wanted to satisfy myself that our detention facilities for families were operating securely, safely and humanely. so that's why i visited dilly back in february just a month after i came on board. and i found that to be the case. in fact, i was very irm pressed with two teachers i met for these children who are there in the facility, and the openness of the facility and these teachers who i visited with who said -- whose commitment and love and mind you i was a school teacher at one time, whose commitment and love for their children the children they were educating, was very evident. the facility was wonderful. actually the technology they had for these kids was incredible. i'm not sure i could operate some of the interactive items that they have, but that's an issue of great concern to us, ma'am. under that order that we're under with respect to family detention, we have reviewed all of those people that are members of that class. a number of those families have been released. you know one of our problems is the immigration courts and trying to get a resolution and a decision based on credible fear or whatever there is to move on with respect to these families and have them know what is going to happen with them. and that's a matter of i think the last number i saw was something like 480,000 backlog cases in the immigration courts that are under the department of justice, and so i urge this committee to the extent there's anything you can do to help those courts to get more judges that would be help us with our disposition and our request for 2016 for more lawyers to assist us to get these people through the process so they don't have to be waiting or be detained. >> thank you. the gentle lady's time has expired. now i recognize the gentleman from south carolina and chairman of the subcommittee on immigration. >> thank you, mr. chairman. madam director, i want to thank you for your service as a prosecutor and as a school teacher. i am biased towards both so i hope that my questioning does not reflect that bias but i do thank you for doing -- both of those jobs are incredibly hard. i thank you for your service. you have cited a case that explains 8% of the releases. how about the other 92%? >> i'm sorry, sir. 8% of any releases? >> 8% of the 30,558 convicted criminal alien releases were under the holding of zavadas. >> that's in 2014. >> right. so 92% were not. >> no, another 10,000 or 35% were under orders from the immigration courts that we have to comply with. >> all right. i want to back up and ask you to put on your old hat. prosecutorial discretion, what are the limits of prosecutorial discretion? >> on a situational basis, sir, i think you're very familiar with the process where you kind of have to decide can you take a fraud case with a $1 million loss which is substantial to many victims or do you have to limit it to cases above $5 million? it depends on resources and the safety issues in your specific community. >> right. and there would be declination levels based on the element of loss and declination levels based on drug amounts and bank robberies could go state or federal usually depending how good the case was, but immigration cases can't go state or federal. they can only go federal. so you mentioned in your testimony that you counted 3,000 statutes you were responsible for enforcing as the united states attorney. how many of those 3,000 did you announce ahead of time that you were not going to prosecute anyone under that particular statute? >> announce it to the general public? >> ahead of time. >> no, i didn't do that. >> right. >> i think many people knew what they were somehow. you know you can't limit everybody. we shared those priorities with all the federal agencies that we work with. >> sure but again, you always have the recourse of going through the state. the state can vindicate -- texas has narcotics statutes. texas has fraud statutes, bad check statutes. so there's always a safety net if it didn't meet your declination level, the state could step in. >> that's correct. >> and i am stunned, and i'm sure you may be, too, i don't want to put words in your mouth you work with state and local law enforcement as a prosecutor right? >> yes, sir. >> and you would have worked with them in the full range of cases from child pornography to you name it. there's a state and local officer at the table with federal officers. right? >> that's absolutely correct. >> so why are my colleagues on the other side of the aisle so resistant to giving state and local law enforcement officers any role at all in immigration? >> to the extent they're here, i guess could you ask them. i'm not sure i can answer for anybody else. >> well in their defense, i'll give you the excuses that i get, that the statute is too complicated, that you can't possibly expect state and local law enforcement officers to understand the complexities of our immigration law as ifd dui laws are not also complex or rico. >> i'm not aware of that. i can't speak to that. >> the state and local law enforcement officers you work with, do you think they were capable of understanding the complexities of immigration law? >> i'm sorry, no, that someone on the other side of the aisle has that view. i don't know that. >> well, they do. let me ask you this. prosecutorial discretion, does it apply in all categories of law? you know some laws require you to do something like register for selective service. some forbid you from doing something like possession of narcotics, and some laws, for instance congress could make you issue us a report. are you able to exercise prosecutorial discretion in all three categories of law? >> i certainly can with respect to the first one. >> right. >> i know you'd be on my case if i did with respect to the third one, so i would say no. and i can't remember what your second one was. >> the laws that force you to do something, register for selective service. >> i mean, i don't enforce that law, registration for selective service. >> i know. you're a smart lawyer, and you've got a broad background. i really -- all politics aside i think it's important that our fellow citizens understand whether there are any limits to this doctrine of prosecutorial discretion because my time is up and i know the gentleman from idaho is going to gavel me in just a second, but there's a big difference between you exercising your discretion not to do a $20,000 fraud case in texas and your decision to confer benefits on that same group. those are two entirely separate legal concepts, and regardless of who is in the white house and regardless of what job you and i have, i do think it's important that we have some bright lines so people understand what the limits of this thing we call prosecutorial discretion is, and with that i would yield to the gentleman from idaho. >> thank you very much. and i now recognize the gentle lady from washington. >> thank you, mr. chair, and thank you, director saldana, for being here with us today. many of my colleagues have talked about the terrible conditions in family detention camps and in detention centers. we have a detention center in my region in washington state the northwest detention center in tacoma. i understand currently in the middle of negotiating the terms of a contract, and it's had to be extended -- gognegotiations have had to be extended twice now. the firm deadline to wrap up is now the 23rd of this month is my understanding. there's been very little transparency in these negotiations. according to some estimates, american taxpayers are on the hook for $300 a day per detainee with all that money going to private prison companies. so why is there is little transparency in the negotiations like this that are taking place across the country and are you doing anything to open up the process so we can see what's happening? >> i'm not familiar exactly with that. i can certainly give you some more background after this hearing with respect to that particular negotiation, but, no, we do want to have transparency. you know there are parties to a negotiation, and usually it's up to those parties to come up with the final terms, but i will tell you that we do seek through all our meetings with all of our stakeholders whether they're law enforcement or nongovernmental authorities or others their views on how things can be improved. i certainly -- i hope i can get out there, but i want to get out to more facilities to make sure -- and i think we've communicated pretty clearly to folks doing those negotiations to make sure we're doing them in the way that ensures security but also humane treatment of individuals. whether they're documented or not. >> if you have other information that you're able to give me, i'd greatly appreciate it and if you're able to come out to washington state and visit the facility, we'd appreciate that too, so you can have that direct experience. >> i'd actually like to do that. >> as a follow-up, there was an october 2014 gao report that i requested with a number of colleagues identified three areas where i.c.e. is falling short in tracking and managing detention costs and expenditures. the three areas were, one, collecting and maintaining cost data, two, ensuring cost is considered in placing aliens in detention facilities and, three, preventing improper payments to detention facility operators. so do you agree that there are improvements that can be made in this area, and if so what steps are being taken to improve? >> i always think that we can be more efficient. i have preached that since i have joined the agency, that we need to look for efficiencies because as we well know, funds are not guaranteed from year to year as we experience firsthand at the department but no, we are looking at all of those things. we're looking to make sure that costs are allocated properly. we've got staff that has been trained in order to look for that specifically and we do periodic audits of those contracts, and i'm not familiar with the report you're speaking of. i would like to read it. also to make sure we've addressed those areas you have identified. >> okay. if we can follow up on that, too, i'd also appreciate that. >> thank you. >> and there are a number of counties in my state in washington, including king county, our largest county, that have formally adopted policies to ignore certain i.c.e. detainer requests and so i know you've talked about this a bit before, but i was wondering if you could explain your views regarding whether states and localities should be forced to comply with i.c.e. detainers. >> we are in the middle as you know, as i indicated earlier, of a cross country tour of those jurisdictions that have refused to work with us. we are trying to assure people we're looking at priority enforcement, not just general undocumented immigrant enforcement. we're looking at requests. we're not asking anyone to detain someone as we did before beyond the term of their local jurisdiction sentence. we are working to identify the areas we can all agree on, murderers, you know, sexual assaulters, those folks that present a danger to the community based on all the facts and circumstances pertaining to a case. so we -- it's a challenging job and presents opportunities for us to visit with our local and state officials and not only them but nongovernmental organizations to help us allay their fears and assure them that p.e.p. is different and we're trying to work with communities to do it in the best way for that specific community. >> the gentle lady's time has expired. >> thank you. thank you, mr. chair. >> i would recognize myself. director saldana it's great to have you here. i understand how hard you work and the work you have is very important. i was an immigration lawyer before i came to congress and i actually worked representing aliens who were in the united states without documentation and so i worked a lot with your agents. how many agents does your agency have? >> on the ero side about 6,000. about another five on the hsi side i believe. >> so about 11000, total. >> agents. >> agents. okay. >> or officers. >> now you are saying that you are here to enforce the law, is that correct? >> yes sir. >> yet you spend most of your time explaining to us why you don't need to enforce all of the laws which seems really interesting to me. you gave the analogy of fraud cases. when you were a u.s. attorney you would have decided that maybe a $1 million fraud case is not a good thing to pursue because of your resources, but a $5 million fraud case would be something that would be worthwhile pursuing. is that correct? >> that's one example. >> that's one example. so let's use that example. what would have happened to the crime in your area if you would have announced that anything between zero and $5 million in fraud you would not be enforcing as a federal agent as a federal officer. >> again, i use that as an example. >> but it's a great example. >> well we would work to try to find a local jurisdiction that might take the case, but they're strapped as well -- >> what if you had the sole authority as a u.s. attorney to enforce a law regarding fraud. we know that's not the case, but if that was the case that as a u.s. attorney you had the sole authority to enforce a law in that area, in that region that you were covering, what would happen to the fraud rate in that region if you announced publicly that between zero and $5 million in fraud you are no longer enforcing? >> i presume there might be more activity in that regard. >> you would presume or doesn't your experience tell you that it would be a fact there would be more activity in the commission of fraud between zero and $5 million? >> using that analogy, i would say so. let me correct something. i'm sorry it's hard to let things like that go by. i have not spent my time expounding on the reasons why executive action is a good thing or not good thing. i tried to respond to your questions. that's all i'm doing here. >> that's fine but that's what you have spent most of the time doing and my concern is that's exactly what this administration has done. they have told the people from other countries that there is a limit, there is a threshold they're not going to enforce a law. in fact, you just showed us a card. can you show me that card again? >> sure. >> that card is what you use. can you imagine if you had a law enforcement agent in your area that decided to have a card like that about fraud and on that card about fraud it would say that no case be higher than below $5 million would be enforced in that area and every time they arrested somebody with fraud, they were taking that fraud card out that card out showing that these crimes are no longer going to be enforced by the law. you know what would happen in that area. the number of fraud cases would go up. the number of people committing fraud would go up. the number of people who would think that they can get away with fraud would go up. would you not agree with that? >> yeah except you're talking about criminal activity in fraud and you're talking about a civil enforcement system in the immigration laws. >> well what if fraud was just a civil activity? would the number of civil activities go up? a civil violation is still a violation of the law whether it's a criminal activity or not. it is still a violation of the law. >> that's true but i'm worried about the impact on public safety. a civil violation is not the same as a criminal violation. >> so you're saying that the united states is now safer because we are allowing more people to come into the united states illegally? >> i disagree with the premise. >> that's what you just said. you said you're worried about the safety of the community. i'm worried about the safety of the community. one last point, you have said several times that congress has extended due process to the people that are here without documentation, is that correct? >> yes -- >> and you are aware that the ina sections 235, 238, and 241 explicitly state when we should have expedited removal of people that are here without documentation, are you not aware of that? >> yes. >> so that's what you should be doing, and one last question, it's really important, i keep hear being all these stories about what's happening in all these detention facilities. would you not agree that if we did expedited removal if we actually took care of the law if we actually were enforcing the law, that these families would not be held in detention for a long time. we would be able to expedite their cases, we would be able to figure out who should be here, who shouldn't be here, and they could go back to their home countries and actually live in a better environment than in a detention facility would you not agree with that? >> i agree that we need to prioritize and that the families are not in general going to create a public safety risk. >> not in general. >> no. >> so we should allow then any fraud under $5 million. thank you very much. >> our decisions on a case-by-case basis congressman. >> i don't believe that they are. they're not on a case-by-case basis. you just showed me the card. that's not a case-by-case basis. you're deciding where a whole class of people should stay in the united states and, frankly people who work under you are not happy about that decision. they're not happy with what the president decided to do and it's unfortunate that a law enforcement officer would come here and testify before this committee to say that it's okay to allow people to violate the law whether it's civil or criminal and i'm done with my time. thank you very much. >> that's a misrepresentation of my testimony. >> we now recognize the gentleman from illinois, mr. gutierrez. >> thank you very much. welcome, director saldana. and i thank you. i have been listening to the testimony up in my office that you presented here today, and i guess i'm very interested in this dhs civil immigration enforcement priorities this card. so you say you carry this card with you? >> yes. >> has it been entered into the record the card? i'd like officially to enter the card, and who has this card with them? >> all our officers that are out there making these decisions. >> all of your officers, so all of your i.c.e. agents have this card with them? >> generally. >> and it states the priorities of the administration. let me ask you something. does the lawsuit in the fifth circuit have any implication in terms of your ability to carry out these enforcement priorities? >> the one in south texas deals only with -- >> it only has an implication on expanded dacap. >> and that's my sister agency. >> these were the priorities issued by the secretary of homeland security? >> yes. >> so those are still in place. >> yes. >> and you're carrying them out. so a couple things. number one, there is concern among those of us that have advocated for a changing of the priorities. in terms of making sure that there is a clear line between i.c.e. and immigration and local police departments. we understand that you have a new program that you have yet to unveil, p.e.p. i think you're calling it. we look forward to that program. i just want to state for the record, i think if somebody is selling drugs, somebody is gang banging, somebody is out there murdering, somebody is doing harm, somebody is creating or committing a serious felony i think we should just lock them up, give them a fair trial, but if he's found guilty sentence him, jail him, and as soon as he's finished, deport him immediately from the united states of america. now, that's very different than if i'm driving my children to school i have been here an extended period of time they're american citizens, and i had a tail light out which unfortunately, secure communities and many local law enforcement departments were using. they were using secure communities as simply another way of going out and taking their immigration policies locally and saying, well, we're just going to arrest everybody we know lives at this trailer park is undocumented and works in this community and hand them over to you without any discretion. so i'm happy to hear your clarifications -- the clarifications you made before and the clarifications you made today in terms of making sure there is a is a difference and this local jurisdictions, because many of my colleagues on the other side of the aisle will always say the experiments of democracyies are always conducted at the local level of government. well at local level of government and chicago and throughout districts of america we do not want immigration policy carried out by our local police department. we think that creates a division between the population and their safety and their security and the police department's ability to be able to carry out. so i'm very happy to see that you brought this list of priorities to each of the agents because a group of us last week put out this family defender tool kit that we are issuing. people can download it from my website and from the websites of other members of congress. and at the bottom it says you can tear this out. it says do not deport me because i'm eligible for doc or adopta and we put and give all the things people should put to the just in case -- because i think this is wonderful. you take the gutierrez cool kit on the one hand and the birth certificates of your american citizen children, for example, and you put your work history and you put your visa or your id from your country. and if you could stop by-- get stopped by one of the agents, he looks a this you have your information, you you put them together and you're not a priority for deportation. i think that's the kind of discretion we should be using. now again, just so that we don't get confused if you're driving a car and you're drunk, you go to jail and you get deported. if there's a taillight out and you're taking your children to the emergency room because they're sick, then you should be able to proceed. if you can prove that you are not a threat to the society and not a threat. i'll just end with this. i thank the gentleman for being -- look director, you've got a tough job. you've got to keep the criminals at bay, but at the same time you have to have an immigration policy that protects american families from the devastating affects of our broken immigration system. and i thank you for your testimony and for your incredible service to our nation as a u.s. attorney and today as a director of i.c.e. thank you so much. >> thank you, gentleman's time has expired. i rec sunrise the gentleman from florida. sorry. >> that's all right. >> gentleman. >> thank you. thank you, director for being here. in november -- november 20th, judge andrew han, i know you're familiar with the case and order but he said this temporary injunction enjoys the implementation of the program and to the three expansions additions to the doka program, also contained in the same dapa memorandum. he said it does not enjoin the previously instituted 2012 daca program except for the expansions created in the november 20 2014, dapa memorandum. there was an advisory, dhs advisory, that said it's dated march 3rd, specifically between november 24th 2014 and the issuance of the court's order, uscis granted three-year periods of deferred action to approximately 100,000. we know that was now 108,081 individualing who had requested deferred action under the original 2012 daca guidelines and were otherwise determined to warrant such relief including the issuance of three-year eads for those 2012 daca recipients who were eligible for renewal. these preinjunction grants of three-year periods are deferred action to those already eligible for 2012 daca were consistent with the terms of the november guidance. do you know who issued that november guidance, bassically indicated it would be okay to issue three-year benefits? >> no, sir i -- you know i.c.e. does not have responsibility for the dock and dapa. that's our sister agency immigration services. >> okay. so you don't care who issues the orders or the benefits that say you can't do your job and deport people who are here illegally? you don't care? you don't look to see who is responsible for benefits that are violating a court order? you just say, oh, well, they've got the benefits even though it violated a court order, i don't care that they're illegitimate? you don't care who issued those -- the guidance or the illegal order or the illegal benefits in opposition to the court's order? >> i care about violations of court orders sir, but that's not something i was directed to do. that's those who confer the benefit, which is citizenship and immigration services. >> yes. but if someone has benefits that are fraudulent or illegal, do you say oh well i guess we can't deport these people because even though they're fraudulent or illegal, i'm going to recognize them because i never looked beyond the face of the benefits that people that are illegally here have. surely you don't accept fraudulent or illegal benefits or visas allowing people to stay do you? >> no i don't like fraud. >> well, i would not -- i wouldn't think so. so i come back to the original question. your job is in part to deport people who are illegally here. correct? >> yes, sir. >> so let me just ask you, i want to know why you didn't deport people who got three-year benefits when those three-year benefits were illegal. >> i am -- i'm not aware of that being the fact. i have not seen anything that says that someone that was granted status or lawful presence under the 108,000 has anything to do with me. we're enforcing the priorities. that's how we're going about our business. >> well, the judge made clear that this court -- if this court had ruled according to government's requested schedule it would rule without the court or the states knowing that the government had granted 108,081 applications despite its multiple representations to the contrary. yet they the government stood contrary -- stood silent, even worse, they urged this court to rule before disclosing the government had already issued 108,081 three-year renewals despite their statement to the contrary. if you don't like fraud, does it bother you that your homeland security department that you work for has actually instigated a fraud upon the united states district court for the southern district of texas? >> representative gomer i -- with all due respect, i would appreciate you not yelling. i will answer your question as well as i can. but my -- >> thank you for your answer but i would like an answer. >> if i may. that whole issue of the 108,000 as you said, is in the middle of litigation. i cannot comment on that. i don't represent the entire panaple, of agencies coming into the united states of america. i can only speak to questions regarding i.c.e. i'm glad to do so if you've got one that connects the subject to i.c.e. >> thank you. the gentleman's time is expired. >> mr. chairman, i would like to ask unanimous consent to give her one more chance. you're telling us in this hearing you have no idea where the november guidance came from that authorized three-year benefits? >> as they say in federal court asked and answered. >> the gentleman's time has ek pired. thank you very much. >> i just want to make sure because i don't believe that. >> just really quickly to correct the record. we heard from mr. gutierrez very eloquent on this issue and was very good on -- at making statements here in our proceedings. we heard that you -- we're deporting a lot of people here that are with traffic offenses but yet we should be deporting people with duis. are you aware that over 13 now people -- 13,000 people were released from custody over duis. 15,000 people. between the two years we've had close to 30,000 people being released into the united states because of the orders of this president with du icon vikzs. >> well, i don't know specifically the numbers you're talking about but i will tell you that i explained earlier that a good portion of those are court ordered releases. the others are made on a case-by-case basis depending on an individual --e-- oh. >> you're aware close to 30,000 people have been released from i.c.e. custody with du icon urks irksui convictions. >> i presume you're looking at something we provided you. >> i yield the time to the gentleman from florida, mr. sanchez. >> thank you for coming. november 20th, secretary johnson issued the memorandum establishing priorities for apprehension, detention, removal of illegal aliens. my first question is if an alien was illegally present in the united states but did not fall within the enforcement priorities would that alien still be subject to premove value? >> it could be because as i pointed out earlier there was a provision in here that says even if someone doesn't meet the priorities and -- but you believe they're a threat to public safety you're permitted to go forward with that, to speak to your supervisor and see if that -- if a difficultecision -- >> somebody is not in the one of the criteria, you obviously would note some affirmative evidence that they were a threat to public safety. there are people are threats that we may not have evidence for, so the absence of evidence doesn't mean they're not a threat. in that situation, if there's no evidence then under these enforcement priorities there would be no action whatsoever against that individual who was here illegally, correct? >> if there's no evidence of a threat, that's correct. >> okay. how many aliens who did not fall within the priorities have -- we will leave this hearing at this point and go live to capitol hill for remarks now from irs commissioner john koskinen. he's testifying today before the senate homeland security committee. expected to talk about the implementation of the tax penal penalty and health care law. this hearing examines the irs' enforce chlt of the health care provisions requiring the purchase of health insurance and providing tax credits. >> we're all aware probably painfully aware, that it is tax day today. so we chose this day because we figured not particularly busy. but i know millions of americans are trying to comply with our tax code. my wife was talking to me actually last night. she was a former irs agent, and now that i've got my job she's actually doing our own family fax taxes and she did ask me when you retire from this gig will i take it back over. i'm pretty satisfied with the current arrangement. i like to do that. of course it's tax day, which is different from tax freedom day. i did ask my staff to find out when that is, which means that's day when americans actually have paid taxes the federal government so all the money they've earned up to that point in date -- point in time on average goes to federal government, past that point they get to keep the fruits of their labor. so that's tax freedom day is april 24th, which my recollection of this is actually starting to move back a little bit closer to the actual tax day but still a very long period of time that we work for federal government. now, as is my custom i've got an opening statement which i will ask unanimous consent to enter into the record. i always get it because senator carer er carper is a nice man. >> reserving the right to object. without objection. >> without objection, it's entered. what i would like to do is read something else. this is a letter we received from a constituent. i think it's pretty appropriate to read today. it's a little bit longer but if you would bear with me i think this will set the discussion that we need to have today because it's is serious letter there are some serious concerns. senator johnson, we are writing to you because we are not sure where else to turn and also to make you aware of yet another issue with our affordable care. we are both retired. we live in a moderate annuity payment which we have -- which we each have and social security. we have been receiving distribution from a retirement plan discontinued in may of 2014. by the way let me mention this is written to me by scott and julie thompson. they did allow me to use their name, which we're finding is getting more and more difficult to have taxpayers allow us to use their name because they are concerned if the irs knows who they are and they're complaining about something at the irs they're afraid of being targeting. now, that's pretty sad. but anyway, scott and julie thompson were willing to let us use their name. in the spring of 2014 we moved back to wisconsin from colorado to care for scott's elderly dying father. in doing that we moved out of the network of our colorado health insurance. with the changes in health insurance for 2014 we were buying a high deductibility health insurance plan through an insurance agency in colorado. at this time our income was too high for us to quaul faye for subsidized premiums. in april 2014 we contacted the health insurance marketplace because that was the contact for health insurance coverage for wisconsin. we were unsure if we would be able to change insurance in the middle of the calendar year. we spoke of the marketplace agent who informed us that we had two qualifying events, the move from colorado out of the network of our health insurance around the substantial reduction in our income as of may 2014. we were told we were eligible for coverage through the marketplace and arranged for coverage with the plan that had providers in our area. effective june 1, 2014. we were told that we were eligible for premium credit and arranged the full premium credit would be applied toward monthly premium leaving was a monthly cost we could afford just over $400 a month. we were told we needed to submit profit of current income by july 20th, which we did. in response we received a letter from the marketplace dated september 20, 2014, stating, quote, we have verified your information, your el jilt as described in your eligibility termination notice will continued unchanged. fast forward to february 2015. in the process of completing a 2014 federal tax -- income taxes we now find out that our teet tall income for 2014 is being used as the basis for eligibility b for the health insurance coverage. with that we are not eligible for subsidized premiums and are now told we must pay a penalty returning the entire subsidy amount of $11,550. there is nothing in the reporting process which allows for taxpayers to report when there was a qualifying event. we knew their income in the first half of 2014 was too high for us to be eligible for coverage. that is why we had to buy our own insurance in colorado. we were very straightforward in our -- about our situation in coming back to wisconsin when we spoke with the marketplace in april. we were told that a qualifying event would make us eligible for the premium subsidy, even in mid year. now again, this is a couple moving to wisconsin to take care of dying father. they followed all the rules. they talked to people who thought who were knowledgeable. they were told they would be eligible for a subsidy and now all of a sudden they are finding they're going to have to pay back 11, $550 of subsidy. our entire gross annual income for 2014 including the distribution received for four months early in the year and scott's social security is just over $62,000. the penalty being imposed is $11,550. this is 18 1/2% of our entire gross annual income. considering the fact that it is being imposed via our income taxes it is actually going to have to be paid out of our after tax dollars, raise that percentage of our income even higher. and for a real ironic turn of events, we will possibly have to withdraw this money from a retirement account which will create $11,550 of income which will probably create a penalty for our 2015 coverage. we don't know what the threshold is for eligibility for health insurance, but in $11,550 penalty on an annual income of approximately $60,000 for two people seems excessive bep really don't have any options except to pay the penalty for nor to file income and state federal income taxes on april 15th. we did not do anything criminal. we did exactly as we were told by the agents for the market place. we paid for coverage even when it was very expensive, so that we would be compliant with the new law. moving to wisconsin was a difficult emotional time for us. we were thrilled that our new circumstances would allow us to have good health insurance coverage. we never expected that what we were told would not be true. it seems to us that there must be many other people who had things happen to them during the year that effected their health insurance and their ability to pay for it. can you help us at all? scott and julie thompson. now, the sad fact of the matter is, and this is what this hearing is about, how the irs is trying to comply with the patient protection affordable care act. that law that's in place now didn't particularly protect scott and julie thompson. and there are thousands if not millions of americans we know lost health care coverage are paying higher amounts. are having to comply with now an even more complex tax system. and of course that's really the purpose of the hearing is how is the irs trying to grapple. again, i've got a great deal of sympathy for your agency in terms of the task it has trying to deal with and help taxpayers try and comply with the even added complexity of the patient protection affordable care act. so again, that's the purpose of the hearing. i look forward to your testimony and answers to our questions. i'll turn it over to our esteemed ranking member. >> mr. koskinen, it's great to see you. you have a tough job. our jobs are not easy. you have a really tough job. i just want to say thank you for your willingness to do this to continue to serve the people of your country and our thanks to those who are on the team that you lead for the difficult work that they do. we don't make your job any easier. we don't make your job any easier because we don't fully fund the work that needs to be done, whether it's providing service to people or whether it's actually doing the audits and so forth to make sure people are paying what they ought to be paying. we wait until late passing tax code changes until it's well beyond any kind of reasonable deadline. we provide uncertainty to the tax code and we expect you to come along and clean it up after us. cartoon character who said we've seen the enemy and it is us. many of the concerns recited by our chairman can be really laid at our feet. my hope is that he will be able to help his quaunt. people call our office every day for help in variety of areas. one of the areas that people have called my office, probably thousands of times in the last 14 years, is because they didn't have any health care coverage. and for the a lot of them health care was a visit to the emergency room or frankly just doing without. and that's not a good option either. and the question is, what are we going to do about it? people talked about doing something about it for years, for years. and we didn't. when hillary clinton was first lady she tried to do something about it. and it didn't work out. and barack obama becomes president and says, let's give it another shot. and i serve on the finance committee along with senator portman here and i don't know if he was with us when we did this work on the finance committee but we tried a bipartisan effort for months involving three democrats and three republicans to try to figure out how to try to extend health care coverage to a lot of people who didn't have it and rein in the growth of health care coverage. frankly, after three or four months of trying to do that led my max bacchus, two good friends, guys who work across the aisle, just could not do it. and in the end we took two republican ideas the exchange, marketplace, and creating large purchasing pools so that people didn't have to be part of a big organization to -- in order to get health care comp ranverage and better cover ran and we took that idea and incorporated it into the law. and we took another republican idea thank you, governor romney because the insurance company said if you don't require people to get coverage we'll end up having to cover just to lame the halt and the blame. and it's not an economically feasible approach. so we ended up taking those two good ideas and incorporated them into law. one of the ideas behind the exchange exchange, as you know, for people whose income is not great, we want to be able to purchase it -- purchase it health insurance through the purchasing pool to maximize their leverage. but for folks whose income is low they get a tax credit. and the tax credit eventually phases out at 400% of poverty. and it's actually, whether the -- those ideas was republican or democrat, i think it's a good idea. and the question is how do we make it work. one of the ways we make it work is to make sure you have at the irs resources when people call you with questions about this stuff you can actually give them a good answer. on thursday tomorrow the senator chaplain barry black, hosts a bible study group. he does it every thursday that we're in session for the most part. includes democrats and republicans. those of us who need the most help, and one of the things he often shares with us is matthew 25. when i was hungry did you feed me? when i was naked, did you clothe me. when i was sick in prison, did you visit me. when i was 30 si did you give me to drink. matthew 25 didn't say anything about when i had no health care coverage, did you do anything for me. 2,000 years ago i guess they weren't thinking about that but it's very real to us today. we had some 40 million people who had no health care coverage just a few years ago. 40 million people. and today that number has been knocked down by about a third, about a third. and on behalf of all those people who have coverage including the kids who are up late, at the age of 26 who have coverage on their parents' plan that's a very good thing hats happened. the question is can we do better at this? you bet we could. and we will. and my hope is that as we go forward instead of trying to kill the affordable care act we'll pind bipartisan ways to work with the administration to fix the problems that need to be fixed. i'm encouraged we will do just that. i have more in a statement here that i would like to enter for the record. but i am happy that you're here. look forward to a good conversation. if it isn't perfect, i like to say if it isn't perfect, let's make it better. >> are you going to ask permission for that? >> without objection. >> i would also like to ask -- so i can enter the letter from the thompsons into the record as well. without objection, so ordered. it is the tradition of this committee to swear in witnesses. so commissioner, if you would please stand. do you swear the testimony you will give before this committee will be the ruth, the whole truth, and nothing but the truth so help you god? >> i do. >> thank you. commissioner john koskinen is a commissioner in fact internal revenue service. prior to his appointment he served as nonexecutive chairman of freddie mac from 2008 to 2012. and is acting chief executive officer in 2009. commissioner? >> thank you. chairman -- >> is your mike on? >> microphone? >> mike check. >> you would actually like to hear this? >> yes. >> chairman johnson, ranking member carper, thank you for the opportunity to appear before you today. in the spirit of without objection i would like to have my entire testimony submitted for the record and give you a brief synopsis. >> so ordered. >> subject to today's hearingist implementation of the tax related provisions of the affordable care act is an important one and is discussed in detail in my written testimony. but before addressing the affordable care act and because today is, as the chairman noted april 15th, i'd like to provide the committee with an update on the tax urn are filinging season. i would also like to note that today marks the 60th anniversary of the april 15th tax deadline. congress moved the deadline back from march 15th to april 15th starting in 1955 to bribe more time for processing tax returns. in some ways this is like the start of a dickens novel as i've said in other contexts, it's the best of time it's the worth of times. let's begin with the best of times. i'm pleased to report that the 2015 filing season has gone smoothly in terms of tax return processing and the operation of our i.t. systems. thus far the irs has received more than 120 million tax returns from individuals on the way to an expected 150 million individual returns. we have issued more than 83 million refunds for more than $230 billion. for the vast majority of taxpayers who didn't have issues with their returns and who chose direct deposit refunds moved quickly through the system and reached them in 21 days or less. since today is the filing deadline i would like to remind anyone who hasn't finished their taxes that while time is running out anyone who can't make the deadline can file an automatic six-month extension. return processing this filing season has gone even better than anticipated given the challenges we face beforehand. along with our normal preparations, we also had to prepare for the tax related affordable care act changes and changes related to the foreign account tax compliance act and there were also late tax extenders legislation passed in december. integrating all of these changes into our around kuwaited i.t. systems and still being able to open filing system on schedule on january 20th was a great accomplishment by our experienced and dedicated employees. i deeply appreciate their commitment to the mission of the irs and their hard work. i also want to thank our partners in the tax industry, especially tax professionals and developers of tax software and other products. without them, the filing season could not run smoothly. we are also indebted to the more than 90,000 volunteers who help people prepare their returns at more than 12,000 volunteer income tax assistance sites all over the country each year. i'm proud to say that many of these volunteers are current irs employee or retirees. specifically regarding the irs portion of the hca all indications are that most taxpayers have been able to fulfill their filing obligations without a great degree of difficulty. i would like to talk later about the letter you received. we provided an array of communication products to taxpayers and tax preparers well in advance of the tax filing season. we developed a special section on our website providing nskt about the affordable care act. we also worked with soft care developers to ensure that the estimated 90% of taxpayers who are going to file using software or tax preparers would be easily able to provide the necessary information required by the hca and file their returns without difficulty. we believe these activities taken together were a big reason why processing of returns with shared responsibility payments and premium tax credits generally went smoothly. i would note that for the vast majority of people the hca provisions only took a moment or two to happenedle. all most taxpayer had to do was check a box when prompted by their tax software indicated that they had coverage. now a word about the worst of times. return processing has gone smoothly if you're simply filing a return without questions or a need to contact us. that's the situation most taxpayers find themselves in this tax season. but if you needed to contact us it's been very difficult and much less a positive story. customer service both on the phone and in person has been far worse than anyone would want. it's a simple matter of not having enough people to answer the phones and provide services at our walk-in sites. as a result, of the cuts in the budget. we're dismayed by the reports of taxpayer lining up outside our taxpayer assistant centers hours before they open just to get service. taxpayers who called us had long wait times on the phones. on bad day fewer than 40% of the calls were able to reach a live assistant and that was often after a 30-minute wait or longer. this was frustrating not just for taxpayers but also for the irs customer service representatives who want to have the resources to be able to provide much better customer service. as we begin preparations next month for next year's filing season, one complicating factor is the need for us to implement as part of the able act the certification requirement for professional employer organizations on a tight timeline and without any additional funding. comp me indicating matters still more is the work ahead of us to continue implementing the tax related provisions of the hca for the next filing season along with the expanded requirements for the foreign account tax compliance act. and we expect another round of tax extender legislation later in the year which we hope will be passed well in advance of december. so i am concerned that when i testify next year on the 2016 filing season the report on the return processing fund may not be as good as it was this year. employees of the irs will do everything they can to effectively and efficiently deliver next year's filing season but we need help. we need the congress topaz any legislation regarding tax extenders as early as possible this year and to provide us additional resources in the 2016 budget budget. with that help i'm much more confident of the chances of delivering another smooth filing season for the nation's taxpayers next year. the regard to the letter that chairman recited and received obviously this is the first year of the program and taxpayers are, in fact and tax preparers are adjustments to the requirements of the act. there's a reference there to the penalty. it's not a penalty it's a repayment of the premium advance payment provided. we spent the significant amount of time last year starting about a year ago trying to remind taxpayers that if their circumstances changed during the year particularly if their family size changed or if their income changed, either up or down, they should contact the marketplaces and advise them. it sounds as if they provided income information that was not properly applied to their situation, which is a relatively rare circumstance. it's actually the first time i've heard someone say they got wrong information from the health care marketplaces. we've encouraged most of the people who have discovered that they've underestimated or over estimated their income and therefore have an adjustment in their premium tax credit did it because it's difficult for all of us to estimate a year in advance what our income is going to be. but the indications are that close to half of the people, about 45% of the people, are actually getting a bigger refund because they over estimated their income to be careful 50% to 55% are getting a smaller refund. again, while we don't have -- won't have full data for another three or four weeks, it does appear that there are relatively few people who are in a situation where they actually owe taxes as a result of having underestimated their income for the year. we would stress that we are doing everything we can in this transition year to help taxpayers whatever their difficulties are, the treasury department issued a policy saying that to the extent that taxpayers are having difficulty with their payments either in terms of understanding exactly what they owe on april is ath or to the extent that they owe additional funds there won't be any penalty for inability to pay. still owe interest and still should file but the treasury has removed any penalties for difficulties in this transition year. as i say we reason delighted and i think it is because over 90% of people use software that we have not seen and we monitor the calls we get every day, a significant response from the public with regard to any difficulties they're having. as i say if you use the software, you just answer the questions, you never have to deal with the instructions. you never have to deal with the forms. i am struck by the chairman's concern which it is my concern and that is they point that people are nervous about revealing their names if they have a problem because somehow they will then be disadvantaged in dealing with the irs. i think it's critical for compliance, it's critical for just the operation of the tax system in the united states for every taxpayer to feel comfortable that they're going to be treated fairly no matter who they are, no matter who they voted for in the last election, no matter what organization they belong to, and in particular they're going to be treated fairly even if they have a problem. we encourage not only our employees but taxpayers to let us know if things are not going the way they think they ought to or the way we think they're going to do because the only way we will be able to fix the system, the only way to get better is if we know what the problems are. so my encouragement to any taxpayer is if you have a problem, we are here to help you. is our revenue agents say, we distinguish between those trying to become compliant and those trying to cheat. if you're trying to become compliant and you have a problem, you've had change in circumstances, you have difficulty with your ability to pay our taxes, we really want to work with you. we spend a significant amount of time and money trying to help taxpayers figure out what they owe and how to pay it. we have online installment agreements you can enter into if you can't meet your payments when you file on april 15th. we negotiate offers and compromise for people who have difficulty now and into the future meeting their tax obligations and we simply want to stress that if you've got a problem we're here to help you. i would also remind people though if you're going to try to cut corners and cheat, we actually are going to find you and we won't be happy about that. but we are anxious as i say wherever a taxpayer has difficulty to try to help them. i always say call us and we'll help. i always get a little nervous when i say call us because i know how long it takes to get through. as senator carper says, it's not that we want to add back the 13,000 people that have retired from the agency and not replaced, but we do need funds in the interim while we're building toward the future to be able to have enough people simply to answer the phones when people call. with that, i would be delighted to answer any questions you might have. >> thank you, mr. commissioner. i will say that this is not unusual that taxpayers are afraid to offer their names because of feared retribution. that's very prevalent in people i certainly talk to. and that's a real problem because of the targeting i think it makes it even more important that we actually hold people accountable that the american people see that those that did the targeting are brought to some justice and it's corrected in the irs. this is a problem. it's very prevalent. this isn't just something that's unusual. it did strike me, i was actually subpriced this is the first time you've ever heard the marketplace or one of the exchanges gave out incorrect information. i would think that -- because of complexity of the law would be far more prevalent. >> i meant in terms of an individual being told the wrong information about that validity of their income. obviously as has been widely publicized in this first year cms has been very forthcoming about the 1095 information returns and the errors that have appeared in some of thosend have been trying to make sure that taxpayers get the updated correct information in their 1095as. i know cms has been working with thousands of taxpayers to make sure that the information in those 1095as is correct. to that extent clearly in a transition year there have been a reasonable number of cases. but still compared to the 4 1/2 million taxpayer wes expect to file, the numbers are surprisingly smaller than you you would expect. you're exactly right. as you would expect in the first year of one of these programs some of the information returns have had to be corrected updated. some taxpayers appropriately have said the information in that return doesn't correspond with the payments i've made or the premium support i've gotten and they were 30 or 40,000 of those that are being worked through by cms. >> you said -- you, i think, correctly, and you did correctly state what they're paying the $11,550 is not a penalty, reimburse chlt o-subsidy they were incorrectly provided. but again they view that as a penalty. you can kind of understand that. they followed all the rules. i was just reading what they said. i take your point. but speaking of penalties, one of the things i found interesting in the briefing packet here the average penalty paid by people that individuals decided to really exercise their freedom and not purchase insurance, by the way is that a penalty or tax? that $95, the greater of 1% is that a penalty or tax? i forgot how that's ruled? >> the ruling i think has been it's a tax. it's called the shared responsibility payment. >> so anyway so my point being is the average tax shared responsibility tax, is not the $95 minimum, it's the 1% of income which ends up being about $172. is that correct for this year? >> i don't have that number but it clearly t95 is the minimum but 1% of your income. >> the greater of. >> and it's $95 for adults in your family. if you have two or three people. >> if you extrapolate that that's about 80% higher than the main mum, the average, 172 is 1.8 times the minimum of 95. if you extrapolate that to next year the minimum penalty would be $325, correct? or the greater of we oh or 1% of your income, whichever is greater. >> next year it goes to 2% i think. >> it goes -- okay. it goes to 2%. okay. so i just did the math on 1%. it's going to double that then. so what i was looking at is $325, times 1.8%. $588. double that then correct? the average tax penalty would be closer to $1200 next year. >> the 1% you can't -- you don't add both the $95 or the -- >> i understand. i'm trying to extrapolate. >> clearly the statutory shared responsibility payment is geared to go up and that's designed to encourage people to get health insurance. >> what question can extrapolate that penalty will be next year. the greater of $325 or 2% of income. >> that's right. let me just check. i have experts here. >> is that correct? okay. the consensus is we think it goes to 2%. in any event the statutory framework provides that the payment goes up if you don't have coverage in the second year to a reasonable higher amount than for the first year. so it will be increasingly encouraging people to buy health insurance. >> right. so here's my point. because what gets laid out there is the $95 the $325, the $695 kind of -- that's a number. >> right. >> percentage of income the greater of. so this year the percentage of income is really what drove it, so the average -- the average penalty was 1.8 times that minimum $95. so if you extrapolate that, if it's 1%, it will be $588. next year, if it's double that it will be $1176. >> you wouldn't -- >> i think you would if you're talking about percentage of income extrapolation of what the average penalty would be. >> right. >> if this year is $172 at 1% next year is 2% would be $1176. and the third year of the implementation of obamacare we can look for instead of 695 as the minimal penalty, it will be closer to $2500 will be the average penalty paid if americans don't -- if the americans exercise their freedom and choose not to buy an individual policy. so i just kind of want to lay that on the table there. that is what the government is going to tax -- i think it's a penalty, but that's what we will tax american people for not buying health care. i was a little surprised we shouldn't have been surprised. only 4% of the subsidies that are provide rd calculated properly. you say about half of them are calculated too high. half of them are calculated too low. do you kind of expect that trend to continue? difficult to calculate that and estimate it, correct? >> i think what's going to happen, right now 70% of people give or take a little get refunds. their taxes generally. they do that because we all over withhold. nobody knows exactly. if you get the same job and don't do anything different you know what your income is going to be. most taxpayers estimating their income understand you can't estimate accurately so they tend to over withhold. we expect that taxpayers have done that and nobody tells them they have to do that. taxpayers do that learning the situation. we expect what will happen is people will be careful in estimating their income as the basis for calculating the premium tax credit and they will make sure that they over estimate their income to make sure that, in effect the adjustment is in their favor when they get to file their taxes. we expect that, as consumers adjust to the law, that increasingly what will happen is that there will be positive increases in refunds or declines in amounts owed because people will have adjusted to the fact that you want to be careful when you estimate your income and you want to build in the possibility that you will get a pay raise your spouse will get a job, and if there's a big change, again, you should call the marketplace. but i think what we've seen in with 40e8ding generally is people are careful and they basically in the case of make sure they have a refund coming rather than the tax owing. >> very quick last question. how are you coming to terms of 100% income verification to really evaluate the correctness of those subsidies? do we have 100% income verification now? >> to the extent we ever have 100% income verification. it's one of the reasons i say it would be nice to get, with w-2s in january rather than in march. most tax players try to be compliant. we audit it over time when we get information returns. ultimately it's as correct as what the taxpayers tell us. we assume that the income provided to us after the fact is correct. >> okay. thank you. senator carper. >> commissioner koskinen, i often say almost every day find out what works, do more of that. when we're trying to figure out -- we didn't end up with an insurance pool which was largely older people sicker people, less healthy people, we turned to try to find out what works and we turned to massachusetts. and the one state that actually tried to address this issue. set up exchanges for health care coverage. and had governor romney in the state of massachusetts establish the individual mandate. that's where we took the idea from. they were several years ahead of us and we're just going through our first tax filing system and all of this is before us. and before your employees. massachusetts has been doing this for not just one year. they've had several years of experience. do you have any idea does anybody with you have an idea has it smoothed out over time has people have become used to this? working with the exexchanges working with their tax code there? has it gotten any easier? >> anybody know? at this point and again -- >> what if anything can we learn from them? >> i think we could probably learn a lot. the tax policy side of this in terms of what works or doesn't work really is we're tax administration, the policy issues are treasury, the administration and the congress. but in all that i've seen i have not seen that there is an ongoing issue in massachusetts which would -- >> i've not heard about it if there is one. >> would lead you to conclude that people have adjusted to it and it has been implemented and executed without difficulty over time because i as i say, what policy is the issue of people outside of tax administration we have and i have personally just kept track of what's in the press and i haven't seen any indications that massachusetts has run into any difficulties at this point. >> good enough. i want to go back to the example cited by our chairman to make sure i understand this. let's say my -- a year ago my family and i thought we were going to earn about $50,000 in 2014 and my wife got a job and we ended up making twice that, we'll see $100,000. and we had begun -- felt at the beginning of the year we were going to be eligible for tax credits at a certain level toward the purchase of our health care through the exchange. but because of her additional income we had not anticipated we were not eligible for either as much in tax credits or maybe any tax credit at all. and we'll say in this example it turns out i got a tax credit for $5,000 and ultimately i was not eligible jibl eligible for that. i had to pay that back i presume through the tax code, through the filing. but that's not a penalty. that's basically an over payment, extended -- tax credit extebed me that ultimately was not eligible for. i want to make sure we're talking apples and apples here. is what i just laid out is what is happening in the situation that senator johnson shared? >> yes. actually again it's important to understand where the money went. in effect, taxpayer generally comes to the marketplace, bias policy. it's determined what their premium is going to be and what portion of that premium paid to the insurance company will be paid on their behalf as a credit. so in the particular case here or any case at the end of the year what happens is you bought insurance. the premiums have been paid to the insurance company and the question is how much of that premium do you owe and how much was eligible for the credit. in this particular case ultimately it was determined that the insurance was bought. that $11,000 was a premium payment to the insurance company and the question is in this particular case the taxpayer owes the premium was not entitled to a credit for that premium paid. it's not a pen iniality. it's not money that went to the taxpayer. it helped buy the insurance for the taxpayer. it's one of the reasons we spent a lot of time last year, we're going to continue to spend time this year, reminding people, in your circumstance, for instance where your situation changes. your wife gets a job, you get a pay raise of any significant amount, you should contact your marketplace and advise them of the change and the premium advance payment will be adjusted accordingly. therefore, over time we think that as more and more people get adjusted to the fact that it's not just a question of stopping payment, you need to make sure the market place is updated as i said to the chairman earlier. we expect over time people will make those calls and make those adjustments earlier and will be careful in theirest estimates of what they're going to earn to not underestimate it and think we will work this way out to even a smoother filing system. thus far we monitor the call that come in. we have not seen a significant number of calls with people who have problems. we know, as i said there have been adjustments made by cms, which runs the marketplace with a number of taxpayers but even there of the estimated 4 1/2 million taxpayers who will file returns reconciling, number of people effected for the first year relatively smaller percentage. >> gene is here sitting in your seat yesterday and, by himself, and spoke, as you have pretty much without notes and did a terrific job. one of the questions that i asked him is what -- what more can we do to help the irs serve the people of this country, make sure that we're meeting -- those of us as taxpayers are meeting the responsibility of taxpayers and making sure that we are providing the kind of service that we expect. when mccaskill was auditor for the state of missouri and when i was state treasury, trying to provide really good service and state of delaware division of revenue won quality because of excellent service. we're proud of that. but it gals the hell out of me to know that people call the irs and they have to wait forever to get somebody on the line or go to the irs office and have to wait to go see somebody. we are come police is it in that. we on the legislative branch are come police is it because we're not providing a reasonable amount of funding for the irs. yesterday gene said there are things the irs has done to be able to use resources that i have more efficiently and he said this is good. he said there are some things that you haven't done that they believe you ought to. and he said and we should provide more in terms of resource resource. like three things. what i would hope we will do is act on his advice. and certainly with your participation and that of your team, the last thing i want to say, we've got a bunch of people who are preparing tax returns on which there's an earned income tax credit and we know that there's a high -- we care a lot about improper payments. we know there's a high improper payment related to earned income tax credits. a lot of tax returns are prepared by people who are not credentialed. i know you've been pushing for us to do something to better ensure people are helping millions of taxpayers prepare their returns or have some reasonable amount of credentials. i've run out of time but this is an important point. >> yes. i would stress as i said, we are able -- working relationship with the tax preparer community. and the vast majority know what they're doing, do a good job, work their way through the complexities of this tax code which is obviously more complex than anybody wants it to be. but there are about 400,000 of those tax preparers have no credentials. they have not become enrolled agents. they are not cpas. they are not lawyers. a lot of them study hard, work hard, do it, provide a good service. there are a group of them that don't have a lot of background. much training and do their best but make a lot of mistakes. and then there's a small percentage of them that are crooks, that you can find them easily because you can drive through any center city and there will be a sign saying come to us, we can help you get a better refund. you can get you a bigger refund. just sign a blank return, we'll take care of it for you. and so across the board we think we ought to be able -- people have noted numerous times, it takes more credentials to cut your hair than to prepare your taxes. at some point there ought to be a minimum qualifications before you can ax chully go to a taxpayer and say i'll take care of your taxes for you. and we have a voluntary program. the courts ruled we didn't have the authority to require minimum qualifications so we have asked the congress for legislation that would require some minimum level of continuing education just the way cpas and lawyers and others have to keep up. >> i would just ask my colleague on this committee including those who serve on finance to see if we can't address this. this is an initiative that requires to be addressed. thanks so much. >> thank you. it does someone speak of the over regulation of the hair cutting industry. i do want to quick, for the record, because we got the information, my back of the envelope calculation here on the penalties. first year, $95 or is% of1% of your income. 1.8 times the minimum. next year it's going to be 2% of income, so the $325 minimum penalty times 1.8 times 2 is $11,076, probably the extrapolated average penalty tax. next year. the third year $695 times 1.8 $12,012 $1258. that's the extrapolated -- the extrapolated average penalty. $17 ramping up to $1176 to the third year over $3,000. so with that -- >> i think part of the calculation is you either pay the minimum 95 or the $325, or the 1% or 2%. you don't add them all together. >> i understand. again, i'm just saying the average penalty goes from $172 probably to $1176 probably to $3146 in the ballpark. senator portman. >> all right. >> thank you mr. chairman and commissioner, thank you for being here today. i usually see you over at the finance committee. and this i guess is really a tax day hearing so it's appropriate to talk about the broader issues. i want to focus in on the 1095a issue, the relationship to the affordable care act. a couple months ago as you know the administration announced it sent out 800,000 incorrect tax statements. and obviously a very important to my con stut chew ents. i think they were initially told you know, don't worry about filing your taxes until we get a corrected statement and then we were recently told go ahead and file your taxes and you won't be penalized based on information you rely on that's inaccurate. so it's caused a lot of confusion. and i'm sure you've heard a lot about it. >> yes. >> i have. s a i'm as i'm sure many of my colleagues from. i have a constituent from iowa she's not interested in sharing her last name today but she got the incorrect 1095a from the marketplace in mid january. she's been trying to correct it ever since. and one of these stories of contacting folks at the irs february 15th she was informed by two different people her correction was denied. february 17th, a phone call it had not been denied but in escalation. arranged a phone call to a supervisor in marketplace but she's still not able to get a straight answer out of the system. >> i would note that she's calling cms, not the irs. the issues about the 1095, data in it is all managed by cms and they do have a vigorous customer service effort working through those kinds of questions. >> i appreciate that and stand corrected. i believe she did call the irs initially but redirected. >> probably referred to the cms. >> yes. anyway, lots of questions about how we can help solve this problem and really the scope of the problem. if you could today give us what the irs' best estimate is of the best percentage of people who received a subsidy in 2014 and have to repay a portion of that subsidy, do you have a sense of that? >> we won't know because it takes us a while to post and there will be another three or four weeks. thus far, it appears that sluthly less than half of the people are getting an increased refund because they got smaller advance payment of the premium tax credit than they were entitled to. and that's because based on their final income. about 50% to 55% are getting a smaller refund because they got too much advance payment beyond but still getting a refund but it is an adjustment and the adjustments are -- we don't know what the dollars are. i've seen tax preparers estimate their experience is showing $300 one way, $500 another way. we don't have information indication of who actually as a result of having gotten too much of an advance payment to the insurance company on their behalf actually end up as a result oweing tax. thus far is indications are, although i stress we will have better information in two or three weeks, is it's a small number of people in that category. that was what our estimate was was that most people to say the vast majority of people get a refund in any event, the swings in whether you got too much of an advance payment or too little of an advance payment are relatively modest enough that they're absorbed within the refund itself. but we'll have much better data for you in probably about three weeks. >> we would appreciate getting that data without answering the question today just if we could submit the question to you today and also submit more for the record, an estimate of what that percent would be in terms of the folks receiving a subsidy to repay a portion of it if the verification process income verification process, were more accurate and working properly. because that's obviously one of the big challenges that we have. the other issue that i think is going to continue to be something we hear about from our constituents is the state federal data sharing. there was an article in the yesterday, about chapman from new mexico, she expected to receive $950 federal refund instead had to pay taxes and the reason is that apparently the exchange didn't account for her husband's social security benefits of $9,000. it gives me concern the state exchanges might not be communicating properly with the federal databases. it seem like the government should have been able to help her avoid that error. she reports that she felt this was a quote in the "wall street journal," kind of a trick she shouldn't -- she wouldn't have gotten the insurance had she understood its full price and dropped her plan for this year. my question for you there is in terms of the information flow between the state and the federal government, do you believe that that is adequate how could that be improved? >> at this point income verification, i should explain how the process works. the taxpayer goes to the marketplace and makes an estimate of what they're going to earn, for instance if you're enrolled last fall, you estimate what you earn in 2015. we then get pinged by the marketplace, either state or federal marketplace and ask for income verification. the income verification surrounded by protections and not revealing it to anybody outside, basically says, what was your earnings in the previous tax year? so in the case of the social security payment if that was on the income the year before, that data would have gone back to the marketplace. in other words, suppose the taxpayer said i'm going to make $25,000 next year. we'd be asked what did they actually file the year before? if that was $42,000 or $35,000 with social security payments that information would go back to the marketplace, and they would have a discussion with the applicant or make a note to the applicant their estimate of income doesn't correspond with verification. the i.g. look at verification income we provide in the initial enrollment period, over 15 to 20 million, and found we were 99.5% accurate in terms of the information we gave, both to the state and the federal marketplaces. so it's ultimately up to the consumer to make an estimate just as i say we all do for when filing our withholding estimates in our estimated tax payment estimates, what are we going to earn in the next year? most people, with any variety in their employment circumstances, never know exactly what that's going to be. again our expectation is that, as the process moves more and more people will understand they have to be careful about estimating their income. if you underestimate it therefore get a bigger premium paid to the insurance company on your behalf it will work out when you have to reconcile and you'll pay it back. our expectation is those percentages of the number of taxpayers, when they reconcile who get lorjarger refunds go up because the same way people who file taxes 60% get refunds because they overestimated. we think the actual accuracy the accuracy of the information that we're providing to verify the estimate provided by the taxpayer, thus far, is not difficulty and not a problem. and the states get the same information from us automatically. >> commissioner, i've got lots of other questions and i'll submit those for the record. a lot of it to me goes to the process, one of the things the inspector general, as you know has said, detect payment of subsidies will be tough until you have a predictive fraud model. lie submit questions to the record about that process and again, appreciate your service and the fact that this is going to be a complicated tax season for you. we'll be following up with more questions. >> fine. >> senator sass? >> thank you, mr. chairman. thank you mr. commissioner for being here. are you familiar with jonathaned aler piece in "the washington post" yesterday about the 100% to 400% fpl qualififications levels for aca? >> no, i did not see that article. >> he summarizing a yale journal of regulation piece about the aca's authorities and who qualifies for the tax credits it's my understanding it's 100% to 400% of the federal poverty line, correct? >> i think that's right, yes. >> it looks like you all have written a rule, essentially rewriting section 36b of the statute that disregards the 100% income level. i'm curious if that's true and how you have the legal authority to do that. >> i'm not aware of that. i will be delighted to get you information. i'm not aware we have done anything that would ignore the statutory framework. >> great. thank you. we'll follow up with a letter and try engage your staff and understand how that would work. particular concerns i have are related to the broad application of irs discretion. obviously, the regulatory and rule making process. but the chairman and ranging member mentioned many constituents, when i travel nebraska genuine fear of the irs because there's a lack of understanding how discretion is applied by the agency. if 36 b were rewritten it's not clear an employer wouldn't be subject to penalties if employees that they have that would have been medicaid eligible end up on exchange, through no fault of the employer, they could suffer a penalty in that case. i'd love to get more information about that. could you help us understand more broadly how policy decisions in the rule making process are made between hhs, the irs and the white house as you have 36 components of the aca under your jurisdiction, true. >> yes. we have all of the tax provisions of aca under our jurisdiction. our role in life is tax administration. policy issues about what legislation ought to look like what changes in the act ought to be are decisions made by the treasury, the white house, and the congress ultimately. we simply implement what goes on. issuance of regulations is a joint effort between the treasury department and the irs. we're a bureau of the treasury department. we don't issue regulations by ourselves. they technically have the authority but obviously design and we draft regulations with an eye on what's the impact on tax administration. if there's a policy decision about do you increase this or that, for instance the policy decision about the penalty application, that's a decision by the treasury department. we get involved in that only to the extent that it's a question of what are the implications for tax administration. would it work better easier, which is the best way for it to work. but all of the policy issues are decided, again, of by the administration and ultimately by the congress in terms of legislative either recommendation or fixes. >> would that be true with regard to the credits for illegal immigrants as well? the decisions that were made about the refund ability of credits for folks under aca wouldn't have qualified under the statute about but appear to be getting credits? the irs plays no role in the rule making process. >> we participate in the discussions about if you're going to make that change you know, we may chime in on what we think the law is but policy decisions there's an office of tax policy in the treasure did respect responsible for tax policy. we work, we meet every two weeks going over regulations to make sure, as those regulations are designed, they are designed with tax administration not only in mind but as a part of that to make sure that as the regulations get changed they don't inadvertently make life more difficult for tax pays or the administration of the tax laws. >> got ya in the king v. burwell case we'll have a ruling in june, when those decisions were made about credits in the states that didn't have state-based exchanges, those decisions were made at the -- in the treasury department's tax policy division? >> yeah. those interpretation of the policy issues are treasury we participate as i say in those issues giving our view as to how it would be for tax administration what works or doesn't work, but the policy calls ultimately are, in policy calls in the development act to begin with the responsibility of treasury, white house, hhs, and ultimately the congress. >> okay. going back to the chairman's opening issue with his constituent, if a decision was made, what was the number? $11,000, chairman johnson, of tax bill? how will the decision be made about the time line of repayment of that? you call it a penalty but that obligation that they have -- >> to repay the premium that went to the insurance company, that's tax administration. and so the taxpayer will either file their taxes and add the $11,000 back that they owe, or if they have difficulty with that, they will contact us. we keep encouraging them to do that. you don't have to hire anybody from late night tv to deal with the irs. they can work with an installment agreement, you can develop an installment agreement on line, one of the things we've built up over the last year. financial difficulties they can work with us about an offer in compromise to figure out how to settle it. those are tax administration issues and we're responsible for those. >> i'm nearly into senator mccaskill's time. one last question, these 34 -- said 36 provisions, it's 34 provisions of the aca, who's the point person inside the irs for the tax administration of all of the new aca authorities? >> ultimately the commissioner is, which is why i'm here. in other words, i've spent -- met every two weeks for the last 15 months with the i.t. people program office the business people working toward the implementation of the development of the systems, implementation of them making sure the filing season got started. i'm ultimately responsible. >> and it's your judgment the irs is up to the task of administering all new aca authorities? >> filing season's shown we've done a remarkable job in the face of both the challenges getting them into we have a very -- what i call a model t. with a great sound system and gps system and new engine but it's got applications running for 60 years pull that off, i am delighted. you could have made a lot of money betting on that 15 months ago. i think we're up to. i thought for a year about it, we do statutory mandates. we'll always have the highest priority whatever statutes you

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