This hearing is just under four hours. [inaudible conversations] [inaudible conversations] the committee will come to order. Before we begin i now i know i speak for everyone here when i wish our Ranking Member a belated happy birthday yesterday. And were supposed to at some cake later, so lets celebrate. But late happy birthday. Weng with you sir. Thank you commissioner werfel, before a printer for the ways and Means Committee of the earlier than usual this year. We have a lot to go over with you so i appreciate you answering request of our a members to come before the Committee Early this year. First, as it pertains to the current 2023 tax Filing Season, i want to thank you and your team for the Technical Work to ensure the quick and withoutth delay implementation of provisions of the tax relief American Families and workers act. We take the appreciate the steps the agency is taking right now to beent the legislation once the Senate Passes of the bill and it is signed into law. Especially with regard to adjustments to the Child Tax Credit. I think were also largely aligned on the importance of rooting out fraud in the Employee Retention tax credit program. We look forward to in about your efforts not just in eliminating that fraud but also making sure across america who filed legitimate claims received accredits as soon as possible. While im grateful for your partnership in these efforts it wont surprise you that i also have a number of concerns about the Biden Administrations approach to the irs and about the irss handling of several important issues. Last time you were before this committee, the irs had chosen to delay a provision of a law crafted by the Biden Administration and that would send tax forms to 44 million americans just for engaging in transactions over 600 in a year a year. This includes transactions like simply selling a used couch or a concert ticket through a thirdparty payment platform. Once again the irs unilaterally chose t the law or sending these forms. This time in an election year. To be clear republicans are united behind repealing this terrible policy, and i want to thank representative caramello for leadership on the repeal effort. But the way to fix this terrible law is to repeal it, not to use the irs to shield the Biden Administration from the consequences of its own policies. Also last time you were before this committee to set said the irs would not retaliate against whistleblowers. One of the irs whistleblowers who has appeared before this committee has since alleged the irs retaliated against him for exposing the truth about the dojs preferential treatment of hunter biden. I hope you will share what have been taken to protect whistleblowers. And just a couple of weeks ago a judge sentenced and irs contractor to five years in prison for the greatest theft of taxpayer information in american history. I thinktment of justice woefully, woefully under charge this individual. But im pleased the judge applied the maximum sentence available to her. But the story doesnt end with that case. The irs must be accountable for allowing happened. And must ensure that it fixes security vulnerabilities at the agency. A recent report from the Inspector General described alarming details about how current irs security flaws thablem has not and is not been resolved. I hope that you will commit today to address their findings quickly for the sake of millions of taxpayers. S we have serious questions about numerous other issues such asme implementation of a irs direct file scheme that the American People didnt ask for how the irs is spend its windfall of 80 billion in fantasy land claims about how much revenue the Agency Thinks it will generate from increased audits. Rs time and resources should be directed toward improving its Customer Service for its existing duties, not spending money on resources on your systems no one has asked for. Part of that focus should be on new technology to make the irs more efficient. Opera use of technology can help avoid the neee thousands and thousands of new employees. I want to thank mr. Schweikert for leading the charge to ensure that the irs is taking advantage of new technology to help taxpayers. Clearly, there is a lot the irs needs to answer for and i look for doing how your agency plans to follow the law andtaxpayers moving forward. I am pleased to recognize Ranking Member neal for his opening statement. Thank you mr. M chairman. So we want to welcome the commissioner back to the committee on ways and means. As always, its delightful tofu have you with us in the middle of what promises to be another recordbreaking finding season, the dedication of the employees of the Internal Revenue service is remarkable. We want to thank them for the taxpayers and fair tax administration, emphasis on word fare. And for the swift implementation of the reduction act. Last Filing Season was about what democrats mostly investment from i this historic legislation. While Taxpayers Service was merely the consequence of the wellmade wellfunded plan. The results have been quite remarkable. In this era of service to americas taxpayershi the irs beat the goal and delivered an 87 of the d level of service. E answered while wait times were cut from 2 40 minutes to three minutes, over 140,000 additional taxpayers were served in person. The backlog was a limited and many Digital Tools were introduced to make taxpayer experiences even e republican colleagues many of the recommendations that we entertain and discussed this morning came from commissioner rettig republic of the work with all of us to ensure quality service. We know that expectations have an increased based on the success of the irs has had so far. It was just less you that we discussed the future o hold top 1 of tax cheats accountable and in a matter of months over 500 million were recovered from 1600 wealthy taxvoiders. Another major victory is taxpayer fairness and a victory for the irs. A reminr, if the revenue is not collected in a fair manner that meets the rest of us pay more. The biggest threat to the irs right now is extremism of some of our colleagues. From the government shut down the looms in just five legislative days tour colleagues to cut her investments every chance they have gone, that only with this end up costing taxpayers money and adding to the deficit but how can you argue with the success . I find this a wondering out loud about who wins with the irs is stored for its resources. Perhaps our colleagues love a chance to answer that this morning. Under republican funding cuts the audit rate on millionaires fell by more than 70 from 20102019. Thos automated large corporations felt by more than 50 i request an commissioner rettig. Workers and families pay their fair share in the American People can count on us to ensure that wealthy and wellconnected people are paying their fair share, too. While the promise of direct file here im optimistic that some prospects, im disappointed it wasnt already time for the public to take advantage of it. Issioner for your diligence being here today we look for to continue work on the behalf of the American People. With that ihe balance of my time, mr. Chairman,. Thank you Ranking Member neal. Todays so what is his commission of the Internal Revenue service danny werfel. The committee your written statement it will be made part of the formal hearing record. Commissioner werfel, you may begin when youre ready. Chairman smith Ranking Member neal, and members of the committee, thank you for the opportunity to testify on the Filing Season and irs operations. I am pleased to report that the 2024 Filing Season opener on schedule on january 29, and is gone smoothly so far. Along with Filing Season and other daytoday operations, we continue to make important progress in our efforts to transform our agency through implementation of the Inflation Reduction Act. Using ira funding is centered on three fundamental themes. First, ensuring taxpayers can easily contact the irs whether in person, on the phone or online. We want them to get help navigating complex tax laws and second identifying the growing number of taxpayers with complex returns, includi individuals large corporations and complex partnerships your shieldingme to evade their tax responsibility. We want to collect from them what is owed. And third addressing the growing risk of tax scams and schemes like protecting honest taxpayers from them. We want to root out the nefarious actors that perpetrate them. These investments allow us to strengthen the overall effectiveness of irs operations. As commissioner i want people to know that the irs is on the side of taxpayers and were working to reflect that in every aspect of our operations while administering the nations tax laws. The irs has been working hard to build on the accomplishments of last year. Our transformation season include providing an 85 level of service on our main toll tollfree phone line during the Filing Season. On the evade taxes. We are working to reverse the historically low audit rates for large corporations, complex partnerships and high wealth individuals. During the past year the irs has taken dramatic steps to strengthen our internal systems protocols and procedures by putting in place numerous improvements to bolster how we protect the systems and information. Our recent steps enabled with new funding have sharply reduced risks for taxpayers and tax system. While taxpayers should rightfully be concerned about recent reports of the unauthorized access and disclosure that occurred in the 20172021 timeframe the Data Security environment at the irs is dramatically improved today. Past year to close gaps that allow this unfortunate event to transpire. However, there is always more to do this area, and well continue our laser focus on strengthening Data Security. Another important aspect of our mission is simple but in the tax fairly and justly. A key part of this involves making sure everyone pays the taxes they owe. But we also have a responsibility to protect taxpayers from being overly burdened in fulfilling their tax obligations. We work continuou to balance these two backsides of the nation. This is an issue we face in implementing 600 threshold for 1090 9k reporting that Congress Passed from 2021. While its import first of lower threshold we must also consider the burden placed on taxpayers in meeting this requirement. Our administration of tax laws should be guided by what is best for taxpayers. In this situation we delayed imposing the lower threshold because we realize that he needed implementation pose a high risk of taxpayers being confused and given the complexity of the 1099 reporting, some potentially paying taxes they didnt actually out. Thats something we take very seriously and will do everything in our power to avoid pics of the irs is continuing to work to reduce that risk before imposing the 600 standard for business transactions. We will continue working this andetting feedbackey groups are also want to assure the committee that the irs is paying close attention to the potential passage of the Child Tax Credit legislation. Tu if Congress Acts, the irs is poised to quickly implement it, building off parts. With Economic Impact payments during the pandemic we may be able to start implementation as early as six to 12 weeks after passage dependent on the bills final language. But taxpayers should not wait for this legislation to file their returns. We will take care of getting any additional refunds to taxpayers who have already filed. It wont need to take additional steps. Chairman smith Ranking Member neal and members of the committee, that concludes my statement. Im happy to take your questions. Thank you, commissioner. We will now proceed to the question and answer session. Commissioner werfel, as you know the house passed the tax relief for American Families and workers act including adjustments of Child Tax Credit which is recently touched on that. I want to ask some additional questions to make the record reflect appropriately. But the bill passed Business Committee by vote of 40three and received 357 votes on the house floor. As i mentioned in my opening statement, i appreciate the work you and your team have done to help ensure that the bill can be possible. I just want to confirm a few details with you. The overwhelming majority of american taxpayers are to the Tax Liability due to the Child Tax Credit changes in this bill. In fact, can you confirm that only roughly 10 of households will be affected and will be received modest adjtments toe tax refund pgh yes. In fact, a look at the numbers come look at the same eligible population in fiscal year 22 and was about 22. 5 2. 5 million people. So that that you offered is in line with her understand is how its going to impact taxpayers going forward. Thank you. We work with your team to make sure the bill that the place a new burden on taxpayers and can be implemented without delay. Can you confirm that taxpayers do not need to file amended returns to obtain the adjustments the further speeding things up . Yes. Thank you. There is language in the legislation requiring the irs to process in a additional returns without delay. As a matter of fact, that was language we added during the market in this room. If the bill is passed by the senate and signed into law how quickly will you be able to make the Child Tax Credit adjustment forhis Filing Season . In other words how long will it take after bill signed up for the irs to send that send it any additional refund . We gave you a range of six to 12 weeks required for implementation from the point of enactment. The reason we give a range iscause we need to see the final language but uncommitted to work diligently to make sure were closer to the six week end of that range than the 12 weeks. I appreciate hearing that, commissioner. So just to be clear we have your commitment that the irs will move as quickly as possible . It will be a top priority to make sure that this gets done. Thank you sir. In the past, congress has asked the irs to make changes during tax Filing Season. In fact, congress has asked the irs to make much larger chang than this bill does like sending stimulus checks to hundreds of millions of taxpayers are creating a monthly checks and excess tax credit on the fly. The number of taxpayers affected here is a fraction of those affected in those other programs. Given that, can you confirm the administrative adjustments needed to implement the tax will be for american and workers act are in much lighter lift for the irs than for those other programs . Yes and mr. Chairman, the work that we did to implement the payments that you referred allowed us to build additional capacity to make a Stephen Moore ready for this change. Thank you sir. Commissioner werfel, the individuals who stole and disclose the Tax Information of thousands of americans has now been punished with a sentence of five years in prison. While im glad the judge in the case sentenced him to the maximum available to her i was surprised that the department of justice only charged the individual with one count one count of unauthorized disclosure and no other crimes. Did you make the recommendation justice on how to charge in this case . No. Thats not the role of the irs commissioner. We allow and defer to the justice, department of justice on prosecutorial decisions. Do you think one count of disclosure matches of the crime committed . I think that protecting taxpayer information from unauthorized access is an absolute solemn responsibility of the irs. And also believe this individual betrayed the trust he betrayed his own commitments. He betrayed irs employs in place and he betrayed the american tax people. And based and the type of the troops should not be tolerated and based on whats playing out in court its not being brought to justice. And as i understand it is going to spend years in prison. Five years. Do you think the penalty should have been hired for this individual . I dont i dont have a on that mr. Chairman. I rely on the court and the judicial process to play out and i trust that the judicial process will get the right answer. I i was looking more of the legislative process of whether congress should change and increase the penalty for someone who abuses taxpayer information like this situation. I now recognize the Ranking Member for any questions youhank you chairman. Commissioner whats the irs done to restore element of fairness to the tax system . Is a into complianc y aware of two on high income earners or the corporation. Thank you for the question. What happened in the time before the Inflation Reduction Act when i was funding was low and we were not making the appropriate investments, theres a friday different different areas we fell behind and one of the key areas we fell behind is the ability to assess complex returns. So in situations w to hire an army of lawyers or accounts to create a lot of complexity in the return and potentially shield income, we werent making the appropriate investments to track that assess it, collective. And now we are doing just that with the Inflation Reduction Act resources, we are focused building our capacity around hownd how to make sure theres fairness. Because if youre a taxpayer who cant afford to hire a lawyer and an accountant to help you shield your income, then you would likely be very frustrated if those that did have the resources to do that and it aint what they owe. And we have to close that gap and were making really important progress already in closing that gap. Commission, lets talk about Data Security. I thought your answer in your introductory comments was on target. You want to talk about Data Security and prevents that have been made in your time estimate your . Yeah. I mentioned how important in the answer to mr. Chairman question Data Security is to the irs. It is fundamental to what we do in ensuring the public trust. When i got to the irs one of the first things i did in march of 2023 was told theer and ask what is the state of our Data Security environment . And what is learned is the were a lot of gaps. One of the primary causes of this gaps was lack of investment. The underfunding had occurred for many years at the irs i said decrease our capacity a right of different ways and one of those ways is to keep pace with investing in the type of Technology Process to make sure our environment was secure. And weve spent the last year working diligently to close those gaps, and there is a long laundry list of steps we have taken to completely dramatically change our environment. And ill point out one important one. The Inspector General in evaluating our security environment pointed specifically to a lack of audit trails in our system so that we can see how data is moving throughout the organization and we can track and see if its moving in an inappropriate way. I required and it is now been implemented that every sensitive system in the has a very robust audit trails that the Inspector General required. Again, before the Inflation Reduction Act we didnt have the resources to put in the work to close these gaps, and thats why it is so important that be funded adequately for its operations. Not just so we can answer the phone when people call us, not so we can keepreturns, but we need to invest in our infrastructure and invest in our Data Security so events like what happened in 20172020 that that doesnt happen again. I dont understand the logic sometimes its offered that if we cut the irs so were going to prove compliance. The logic escapes me so let me give you some time here, i got one minute and 50 seconds to talk about some of the other additions to your testimony you might like to offer. Absolutely. So i really want to amplify this point about what a funded irs means versus what it doesnt. And we have all the evidence we need in looking at the state of the irs before the Inflation Reduction Act was passed versus where it is today. And before the Inflation Reduction Act was passed, our Walkin Centers around the country were close were understaffed with lines around the block. And now just a few years later weve opened 60 new Walkin Centers that are fully staffed and we are extending hours to saturday for people cant get to us during the week and will implement what we call popup walkin Centers Going toward vote populations so people want to s can. A second example is with the folks. We were understaffed by thousands of phone theisters because of underfunding. What did we do with offending . We hired 5000 phone as sisters. Put them in the cal cen and between before the Inflation Reduction Act and after the was a dramatic change in our ability to answer the phone and help taxpayers with their questions. And the same is true for digital. We have a whole generation of taxpayers thats going to expect as they should to be able do everything ever wanted to do with the irs without calling us can without going into a Walkin Center. And before we were funded, Technology Tools were stagnant. They were not being updated in the way you would see either other jurisdictions around the world or in the Financial Services sector in the retail sector. Thats all changing now. We have work to do but now every time taxpayers come to be with the irs infilling of the taxes or answering questions when they go to our website each Filing Season they are going to see a new set ofew functionality, new things that they can do without ever calling us to walk into a Walkin Center because we are investing and focusing our investments a taxpayers. Thank you. Mr. Began his regular. Thank you mr. Chairman. I want to thank the commission for being here today. I chose the florida chamber. We at 130 business, 30,000 this is in the federation across florida. One of the biggest issues that making to you a little earlier is dispute resolution and him talking about companies with 50 employees or less. The cost of hiring accounts and maybe get an attorney and go through the whole process is very timeconsuming. Many times it will put them out of business some of them. But it think its got a little bit better but whats your mindset of where were at in terms of, seemed like we want to get at their deal for the irs for the countrysolve as many of these disputes as we can some of them claim there out there a year, six months eight months, tienergy, their time and their enterprise. You mentioned that, the big corporations one thing. Small business and individuals as well. Right now on Small Business. Yeah, i really appreciate the question, congressman. I havent mentioned it yet one of the things that guides taxpayer bill of rights. I have it framed above my desk. I have with me today to get sky like some people carry around thr pocket constitution. I carry around the taxpayer bill of rights because it so important in everything we do we are guided by it. And one of those rights is the right to your issues. And i want to make the right investments so that we are doing that. And thats a multipronged set of solutions. If for example having clear notices, clear guidance so the law is complicated the irs is translating it clearly so we never get to a dispute. Its doing outreach to Small Businesses with training and webinars. We are investing. So what are your questions and how can we help you . And then its hiring more people working to make sure there is no di y got a few minutes. Ive got a couple more want to get through. Identity theft a huge issue again it seems like its organized groups and stuff are still out there. Where are we at with Identity Theft now . I had a lot of people in our region florida where their identity was stolen, tax returns were filed on behalf of of fake he or some organize group. Whats your sense of where thats at . Its critical and its a top priority. I mentioned top three things we want to do. One is prevent people from being victimized. This is a mixed story. I wish it was all good. Weve made significant progress in preventing idey theft working with private sector partners and will call our security summit. We now prevent 98 of identity will. But in the case with is a victim as recently pointed out by a Taxpayer Advocate report, we are not resolving those issues quick enough, and so its a priority going forward. That battling to continue our Strong Performance in preventing Identity Theft it also when it happens and is a victim, to raise our game and make sure were providinghat victim assistance any much more robust what. Let me ask you what of the think in terms of Customer Service. I know you touched on that. Just talk to accounts and things locally and do seem like one tequila credit seems a is a got a little better but still youre on the phone for over an hour, or aggravated. You want to take care of the social as quick as you can come leaks in terms of answering the phone, get their questions answered. You touched on it in your early testimony but what is your sense of where that, we get to a point where we can answer the phone quicker and try to get a little more help from a quicker stance . So on our main Foreign Language were most of the volume comes come were at 85 level of service. But theres more to do. There are other phones lines that we need to continue to work on and approved by the gig and a poor example of what were doing that i dont ever want to hear about some waiting on the phone for an hour. That is heartbreaking frustrating but also a a rallying done this year is weve instituted a callback option. What that means is that the way reengineering our call center doubt is if you wait time is going to be longer than 15 minutes, we will introduce into the phone pay we can schedule a callback option so you can hang up, the longer listen to elevator music and well call you back. These are the types of improvements. I know this happens in your everyday life when youre on any of the call center in the Retail Industry and otherwise bankinge some catching up to do. But because we have funding we can make these investment, and these are really helpful to taxes because now if they have a baby crying for something they can hang up and get a callback option. Thank you and i yield back. Mr. Doggett is ruggedized. Thank you very much, and thank you commissioner for the efforts that you and your team have made to address many problems have been created o the last decade prior to the last congress by those who seem intent on insuring that irs would fail by cutting the budget again and again and continually attacking and stirring public dissatisfaction with irs. As understand your have gone from a of 15 satisfaction to 85 satisfaction. Thats correct. I remember having not only complaints from constituents before we provided these signs but from cpas and tax preparers and have specialized that were kept holding in the very way you said they are not today. And you could not have had your team could not get that the successes without the additional funding you were provided by the last congress is that correct . Thats correct. The other very thats very important to me is enforcing our tax laws so that the many people that are out there that are paying their fair share are to do so. And the data that i seen suggest that audit rates for large corporations in the decade prior to in half and that the audit rates for those who earned over 1 million per year were cut by about the top 1 was getting away with not paying an estimated 160 billion in taxes each year. I know that you reported progress being made on tax enforcement earlier this revenue as a result. With the people that youre after, where they that kind you about some of his campaignt just had honest mistakes and let all of the return or with a true tax cheat and can you give us some examples . Yeah, i cant emphasize this enough, congressman. Our focus our priority and our agenda under the Inflation Reduction Act is to increase scrutiny for complex filers, wealthy individuals large corporations and complex partnerships that are invading the tax responsibility. It is not our intent to increase scrutiny and invest this money on a new wave of audits for middle and low income thats that can happen under my watch. And we will be able to publicly report that she can hold me accountable for that. With respect to high wealth, theres lots of Different Things we are doing to start to catch up and close the gap thats been there for too many years. And one of the things that we can report immediate results on, because often these Enforcement Actions take time, but there are some things were doing that should give the American People covers where using this money smartly and in a way that is creating fairness, and that is going after millionaires and billionaires who are delinquent on owed taxes. This should frustrate people. These are millionaires and billionaires who had attacks do and are delinquent in paying it. We have so many honest americans up eight their taxes one. These millionaires and billionaires are not. We have created this high risk list of 1600 of these individuals, and we started to go getqy the money back. And so far in the early stages of this effort weve already collected a half 1 billion. And thats just scratching the surface so that should give you a sense of how much inequity there is and how much if we stay on this path were going to be able to close that inequity gap. I understand to stand this path you indicate you need another 800 billion . Yes. Yes. That is an important point about our budget and i i will just say base budget to fund our ongoing operations, keep the lights on, if they win of the Inflation Reduction Act which is modernizing and helping us build capacity. Our base budget is insufficient to run the daily train schedules. Schedules. What that means is we have to borrow from the Modernization Fund just to keep the lights on. If we keep doing that we wont honor, well keepp the lights on but we will build these paes until taxpayers. I believe the treasury withinhe the last two weeks has estimated as much as b 561 io be collected over the next decade from wealthy to Corporate Tax cheats that youre focused on, and yet unfortunately our republican colleagues on this committee and elsewhere seem to have no higher priority as indicated at the first bill that passed in t we get up to the brink of disaster here that they want to cut the very funding your relying on to see that these corporate and high wealth tax cheats are treated the same way and pay the taxes away most americans do. I just want to thank you for your efforts. We will do all weou can to resist the efforts to undermine the progress you arere making. Mr. Smith is recognized. Thank you mr. Chairman. Thank you, commissioner, for being here today. I want to register the fact my office continues to receive input from constituents that they are not getting their questions answered from the irs. I realize youre touting touting an 85 efficiency level and that everything is j at the irs. I continue to have concerns that the 80 billion in ira funding is not giving us the results press that were promised. Also certainly theres a lack of candor i believe from the administration about how the funds for actually being utilized particularly troubled administration contends implement policies across numerous agencies regardless of whether its a legislative authority or not. Student loan forgivenessic critical mineral agreements in the recent changes to the 1099k requirement from darpa are all requirements of this executive overreach. The development of the irs direct efile assistant appears to fit that description. While ira the bill socalled Inflation Reduction Act provides 15 million to conduct a study of direct efile and enumerated the study parameters that provided funding for only nine months and saidin nothing about actually implementing that system. The nine months authorized for the study have now lapsed as im sure youre aware. Can you tell an explicit what too great an entirely new government run system of filing taxes since the law only provided authority to conduct a study on direct efile system . Im not looking for other examples of the irs helping people file their taxes. I gete from the federal code authorizing the particular action script absolutely. I appreciate the question. So we do have a responsibility and an authority to offer taxpayers different approaches for how to meet their tax obligation. I can give you the exact statutory site for that. Whats critical about the direct file solution is that ittion. There is no mandate for anyone to use this solution, should they choose it. But you were saying this direct authority to do so . T direct authority to implement the tax system in a way that provides tools and solutions for taxpayers to meet their tax responsibilities for generically speaking. Well, electronic, calling us on the telephone. Thateated precisely in law. So for example if we create a dolby version of the tax from the can fill an online, weve done that. Theres not a specific Legal Authority to get but there is a legal description of the commissioners responsibility here one of those responsibilities is to provide taxpayers with avenues for how they can meet their tax obligation. This is just oneor its not a mandate. Its ans option. I understand that which may not be mandate does not always mean theres authority to do so hat is the case right now. I am specifically troubled, troubled by the claim that there is that authority there when i dont believe that there is. But whats go back to the topic i discussed with you and secretary yellen previously on multiple occasions and thats audits targeting families earning less than 400,000. I continue to t have concerns despite claims from secretary yellen and others that the administration cannot and will not fulfill his promise about audit targets and also meet its claim to not increase revenue. Last year used it in response to a question for the record the irs is committed to ensuring none of the funds provided by the ivory will be used to increase audit rates for smallnesses and houses making less than 400,000 annually. Relative to historical levels, h and thats a quote. The phrase historical levels means something higher than thehe current audit rates is that i could . No, its not accurate. We have been idle thing let me let me, let me tell you what the Current Situation is. Tax year 2018 will be the bases that we would utilize to make sure that the audit rate for those that earn less reclaim my time because times of the essence here. I would like to learn more about that butbo i would also like to know if the irs can provide us with the i distribution table for the 561,000,000,000. 8 561,000,000,000. 851 billion estimates of revenue the generation and do you know when we could see that . We have republic report on that. I would be happy to engage with your staff to understand specific questions or additional layers of information beyond the public how did you decide choose 2018 as it established the historical rate, levels of audits . Well, in large measure because it is a historically low rate and wantedra to assure the taxpaying community that the inflationn reduction act would not be used to increase the audit rates among middle and low income. And so we chose 2018 as a historic low rate to provide additional assurances and we wanted to be specific so that we can be transparent and hold mecc to account and irs to account. Because each year we publish our audit rate in our databook. So you can go into her databook right now and see exactly what the audit rate is 2018 competent when we finish with tax year 23 and the audit rates are complete youet me see. Did they meet their mandate . It should be all public. You mentioned earlier that you generated about500 million come have the thing i think in your words of revenue from about 1600 targeted taxpayers. That would bee average of just over 300,000 per taxpayer. How many resources the dollar figure, of thehink we take on average to reach thater level . I would have to get back to you on a specific but it certainly has a very positive roi. In general this is something that the Congressional Budget Office has public reported, but in general we return six dollars for every one dollar invested. So on average you should expect about a one to six ratio. So onesixth of those resources to get the job done. Thank you. Thank you mr. Thompson. Thank you mr. Chairman. Commissioner thank you for being here. First, congratulations for the work the irs has done over the past several months. As the Ranking Member, chairman neal mentioned democrats on this committee made an historic investment in the irs last you the Inflation Reduction Act tick since then i can tell you i inc have heard from my staff, and all three of my are working with theth irs. They have contact with your office hundreds if not thousands of times a year, and they tell me that the irs is noticeably significantly smoother than theyve ever been before. You are responding faster, your responses are better, people answer the phones. T my staff find the Taxpayer Advocates to be relbl helpful partners as we try and work with our constituents. I personally work with you h and your team on specific issues, and i want to thank you. I have always found you to be helpful, and your team to be professional and very well prepared. Unfortunately, the majority seems to think that the irs budget is a slush fund to pay for they want to pass and put into law. And i have lost track how many times they have tried to the irs budget to offset spending, despite reams of evidence proving that irs cuts actually increase the deficit. I believe the only reason to work to cut the either make Consumer Services worse or to make cheating on your taxes easier. I understand people dont like paying taxes this is how we fund our Civilized Society and the many programs that our constituents care about. So while we can disagree about tax policy on theght to all agree that on a bipartisan basis that people should follow t the law and pay the taxes that they owe. Commissioner when irs funding is cut what happens to our deficit . Up. In fact, for every 100 million taken from the irs a deficit grows by 600 million over ten years and thats because 600 million. For f every 100 million cut 600 million increase and a deficit. With the irs funding is cut is it harder or is it easier for people to cheat on their taxes . It easier. And let me just, if i can go through, 100 million what that buys you at the irs 700 audits of high income taxpayers millionaires and billionaires. 200aiex partnerships. 100 audits of large corporations. 32,000 collection cases of wealthy individuals and on and on. And thats just from the 100 million. So clearly it has an impact. Thank you. One thing that hopefully we can agree on both sides of the dais is modernization. Can you talk a little bitis more about how youve used inflation ve reduction act investments to modernize . Yeah,h, absolutely. You know, one of the things that inspires me, congressman is before the Inflation Reduction Act there was a famous picture in the Washington Post of our cafeteria in austin, texas filled with unreviewed returns in paper. That cafeteria is now clean. People an it rather than us storing tax returns. Thats because we are aggressively digitizing and scanning all of our pap part of our initiative to go paperless. This is important not because its more efficient andnd more secure but a means with going to process more quickly. One of the things thats going ng on due to our modernization is we have significantly reduced the ongoing backlog of returns and correspondence. Thank you. I would like to take a moment to talk about the investment in Climate Change in the ira. This was the biggest investment in climate work in history in our country. How would you describe the rollout so far . And how would you characterize the uptake on tax credits like easy or solar credit . Weve had a successful launch. In january we launched our portal i. T. Solution that allows thoseha are eligible for credits related to the manufacturing and transaction associated with electronic vehicles. And like the new solution there are certain things that we could do to make it better and improve the Customer Experience but over allcu its been robust participation in the system is performed as expected. Thank you. Yield back. Mr. Kelly. Thank you mr. R. Chairman. Thank you for contacting them today. Mr. Rubel, its good to see you again. I think some of the question doesnt mr. Werfel we do telephone town halls and we did one of it over a ago and when we do irs town halls it just seems like we cant be on the phone long enough andnd the irs advocate as her uncle with us. I dont think theres anythingnk more public youth of what we are talk about to be when it comes to the irs the rules and how it works and whos paying fairly and whos taking advantage and goes back and forth. Wish we could just get to a situation of these is a a program is this an agency that runs in the best interest of the people who find it . And the same people who Fund Everything else in our government and that is hardworking american taxpayers. Ive got to tell you from the standpoint of formally being in the private sector and have, well while present i was not in the operation of the time of going through the early days of the event in it and wonder the things which was a really good idea was the Employee Retention tax credit program. However, however we continue to look at programs, and we look at holdups in it. My son runs of this is as i talk on the phone about a quite a bit release of the biggest thing would have been had employers been able to get some help or some counsel on how that was working or how it was supposed to work, how do that but we look back on it now were trying to find out what is going on with that program . And while itss all kind of different figures floating around about what itt has cost, i would use caution people to say you know, anytime we say it costs the government, we keep in mind that actually been gave taxpayers a break on what comes out of their wallets knowing they provide every single penny either with their wages or by cosigning a loan to fund this incredible operation. So when he comes to the irs right now and ensuring that s Small Businesses receive their ertcs whats the oversight . How can you help us with that . Because of a number of friends i met with our former representative built along the of the day was concerned as a lot of people he still works with is a fact there is confusion on what quarter is being funded and what is the timeline and whats in the and what still in operation and where should we go from here . First of all i appreciate the question in the way you worded it because how you can help, one of the things i learned early in my tenure here at the i irs is we cant do this alone. Implement think the tax system is a partnership with Tax Professionals taxpayers congress. The erc is an incredibly complicated program. It was critical and played a critical role. We issued 3. 6 million drcs to date and was an economic lifeline for people that need it. What happened is the further we got away from the time of eligibility, because it demonstrated loss that you have an order to claim eligibility ended up on december 31, 2021. The further we got away frombe it, the more aggressive promoters and marketers started in myke opinion taking advantage of honest Small Businesses and getting them to believe that they were eligible for b a credit a trulyt were not eligible for. Months after that period of eligibility under the number of your secret is coming in to the irs was actually increasing the 2000 a week, 60,003, 70,000 the week. And we started to realize that were so many ineligible claims in what was coming in, it was getting harder and harder toe from eligible. And thats why we issued the moratorium in september of 2023. Because we want to slow the flow of these credits coming in and to make sure that we were not paying out fraudulent claims. So what we announced his were going to have to slow the process down to protect taxpayers, not just taxpayers financial bottom line. Want Small Businesses on fraudulent claims that also protect Small Businesses who may been taken advantage by these. Guidance is key and these are very competent issues but there are people who bowed believe this would be taken care of and you are on hold, you are on hold and you dont know pick it makes it difficult for people to file their claims at the interview. One thing to cover quickly. The direct file program. So we the people in the private sector and the think weve had Great Success with it. Why did the irs get involved . What is it that you were trying to achieve . Listen youre down to one second i dont expect an answer that . But he did to get back to me it is a legitimate question, if we have all these available i will test our time but being money being well spent. I think its already there for people. I dont understand what role the irs would have it that, and i i dont question, i dont question the fact that you think you could help. Its already there. Thank you. I yieldk. Thank you. Mr. Pascrell. Good morning mr. Chairman. A lovely day in the neighborhood. Commissioner werfel, you have been a breath of fresh air. We had a little problems with alaska who sat in your seat. Welcome back. With the last guy after years of chaos very new day at the irs. Last month you aubrey talk about it the irs announced had recovered 485 million from only 1600 billionaires. The question millionaires. The question of fairness in the texas and is at hand. We all have different opinions about it. But i believe or else i wouldnt say i believe that you were there to live in my house in new jersey, if he doesnt pay his property taxes, the guy on the next block from us doesnt pay his property taxes, people understand now that we are going to have to pay higher property taxes and less some ofd. Its tax fairness. Pay what you are supposed to pay. And people will complain less. People believe many times mr. Werfel commissioner, that they are being shafted when it comes tond and i have an obligation to address that, day in and day out. The tip of the iceberg. Last week we learned that we will recover at least 560 billion from rich tax cheats after the next decade. So you have been portrayed the betrayed as ought to be coming after you. See, create fear, that you are the bad guys. Lincoln dealt with that during the civil war very honestly. If money was going to be used for the war how would the towns throughout america you know, build their roads hospitals their schools et cetera, et cetera . Thats why we have a big argument over it. I feared for my own neighbors. You are now answering our calls. Refund checks are going faster. These successes are because of, i think your leadership, and because of a stark funding passed by democrats mostly, to make the irs work for regular americans. Wow. I remind everyone, every single republican in congress who voted against the Inflation Reduction Act and against funding for the irs to do its job. I mean, the facts are the facts. As tom would say the facts are the facts. Members of the other side have made irs funding their white whale. To be harpoon at any cost, have clawed back one quarter of the historic funding. Like the shark in jobs. They want another bite. The Congressional Budget Office has estimated that that funding it will cost American People double nearly 400 billion, nearly 40 billion dollars excuse me. I have a question for you. Millionaires and billionaires need to pay their fair share. I think everybody will agree up here i think im not sure. What is the irs doing audit high net wealth individuals and tax cheats . Congressman, is where we are focused and were taking multiple different steps. First of all we are hiring additional accountants auditors and where they are being deployed and where we are shifting our audit work force is to make sure that were focusing individuals because thats what we think we have a growing problem of tax evasion and we need to address it. We are deploying technology differently. We are using analytics and ai to better understand how money moves in these very complicated arrangements. We have the means and capacity for we have lost capacity is the complicated situation where we are undercutting gross alarms on commissioner and funding is available, you focus on the cap were discomfited to give me because im crumbling the numbers in front of because as the chairman spoke the adoption of Technology Solution left that warns tax receipts and want a friendlier more effective way. Im looking this is preliminary data with ppo reports in your press release but took 520 million i see for every dollar across10 these operations will will onlyay that, its completely opposite them before. The adoption of the purchase of technology and use of databases dramatically lower costs of collection and make sure the collection much more efficient fair open. Fire armies of the ethnology minor i can assure you investment in examiner audit im looking at cbos in your own press release. Im getting basic division pretty good at. To your question on technology is essential the whole effort is about modernization and its at every level, technology will help us securely technology will help taxpayers at an easier time it will take less time to pay their taxes and hopefully be less expensive. What can i do to fix it, what i do to help you . We appreciate your review and i know my team has already briefed your team should regularly. Your team has actually been great at communicating direct that doesnt surprise me but we have a lot of different opportunities to advance technology at every level our website, tools taxpayers have. I love you to talk about expansion. There adding whether automated chat computer and it advances in a goes to live chat, these are standard activities in the private sector and other private sector call centers we just catching up and we are because funding to modernize versus just keep the lights on the the adoption of technology should dramatically change the structural is a going to hire . People and i do look forward to your staff providing taken in your own press release 520 million icy a cost a preliminary audit. Last thing just because we get a lot of on this i expect that just what it is will. Please god assesses you can so whether its Small Business or promoters, everyone knows the rules and timing and knows how to close this out. I know you have to run it by armies the players and those things get it done. We have a special section on what to look out for an why you might not be eligible did a webinar a thousand registered participants and running educational series all over the country and we are doing a lot we need to be doing more so we are willing to listen to ideas how we get out there and talk to people. The processing time of whats eligible and whats not and with that thank you. Thank you, mr. Chairman. Personal let me welcome and thank you and Internal Revenue services on outstng success ensuring a fair tax system in which the well connected pay their fair share. I want to make you aware of the outstanding work of chicago Taxpayer Advocate service. Im grateful for Katrina Britt arlene and the rest of the chicago team using the expertise to help my constituents. I also think Robert Chapman with the legislative affairs team. As you may know i have championed many of the 2021 bic enhancements all workers 18 or foster. Given working parents up to 8000 on childcare expenses. I like to work with you to better patterns in the use of those two inform to restore them. How many younger workers got it in 2021 who are excluded under current law . Foster almost these provisions are working benefited from their refundable not on the current law. Do you have any update you can share about who benefited and how the 2021 earned income tax credit . And proud i helped lead the effort of making the program permanent. I know Internal Revenue services are Strategic Operating plan 1. 9 including the goal of expanding coverage in scope. In specific strategies is for accomplishing a and how the irs has involved organizations and develop in those strategies to give us questions. We have an awareness of question in our Research Analytics team is working up as quickly as possible. I will say we know there are people eligible for earned income tax credit governor claiming eligibility. They may not know about it, they may not because they are intimidated by the perplexity of the eligibility formula they just need help so we can do more outreach and working with Community Partners to make sure people are aware and getting the help they need. You mentioned volunteers for the elderly. I look those programs working with communities own taxpayers having more and more around the country is an Educational Campaign around what you may be eligible forp available to walk you through often to one of these volunteer sites and its an amazing experience to witness volunteers are taxpayers w would not otherwise have gotten help they needed and very appreciated and volunteers are passionate a they are eligible for. Thank you very much and i look forward to working with you you. I yield back. Thank you mr. Chairman. Want to thank you for being here today and your service. A number of federal programs and one is Child Support. Over the focus my questions on Child Support enforcement and as you know the irs and collecting Child Support for noncustodial parents to help children and families get the money they deserve through your program the federal tax refund program. This is a vital source of income for millions of families across the country. In illinois, 44000 families and children depend on and receive 65 million offset program. Rely on federal Tax Information thirdparty contractors and thats been done 2004 a year ago without consultation to congress and without an opportunity to work the irs made the decision abruptly to change the policies and this caused a shift and not all states and programs will be noncompliant as of october. Across the board people were frustrated and extremely a lot of questions by the irs that this. He testified ready policy change calls hundreds of millions of dollars to implement new systems and hire employees. They come into compliance by october and the matching funds resulting in millions of families and children losing Child Support. These 42 states. I appreciate the question and this was an issue brought to my attention early in march of 23. I had a lot of questions about the policy itself and why we issued it and i engage with the department of Human Services to understand what the irs could do to reset the expectation states contracts and others and at this moment that policy announcement is pause. We are not moving forward and we have the opportunity to do the engagement you are suggesting so we have hhs we are going to take more time to make sure weve heard from stakeholders appropriately before we finalize any such policy. The policy referenced is 2024 decline . I believe it does but i want to talk to you Collateral Damage is 60 federally recognized tribes and they are in a tougher position because of the policy they are in jeopardy losing access to this enforcement will so wanted to mention that to you and it needs to be a priority for you and your department. I need to go back to the office and make sure i have that. In october of 24 as you mentioned i want to talk about the implications im happy to revisit that to make sure we get the right data and feedback. Thank you for testifying, i want to join my colleagues recognizing the hard work irs employees put in every day to help American Workers seniors and families how taxujzrop di alyou nttiicodistrict office. Thank you mr. Chairman. Thanks for being here, it almost seems like you are enjoying answering questions which demonstrate youre pretty good at your job so thank you very much provided irs with historic funding. The hundreds of billions of taxes owed but not paid and provide billings to modernize the irs and improve Customer Service is reduced call time systems and help more taxpayers and professionals settle tax issues. Thanks to the funding the irs collected half a billion dollars in overdue for delinquent taxpayers. I want to remind my colleagues tax collection a tax hike, its about enforcing the law. The vast majority of the middle class family constituents w2s and simple incomes pay what they owe and so should everyone else at all levels. Thank you and we are encouraged by efforts to recoup unpaid taxes improve Taxpayer Service, appreciate your work and leadership on this. Iant to narrow down to prepare regulations and let me delve more into it. The purple look which im sure you are aware of, stated over half of returns are done by paid preparers who dont have any financials to i have a bipartisan bill taxpayer production prepared proficiency act try saying that fast cash would e preparers meet minimum competency standards that would exempt credentialed professionals like cpas and agents or preparers that meet minimum standards from state Education Councils in a new standard and that is the focus of the bill. No the irs will be given full Legal Authority to regulate preparers, would you support the compromise that gives goodman competency standards . Whether it credentialing the harm taxpayers and the president s budget each year included an array of different legislative changes that will enhance our ability to crackdown actors doing these things and Taxpayer Service and we would love to work with you on the right side of legislation. Thank you. The authority to identification when there is misconduct. Preparing each revocation. Legislative proposals ive mentioned earlier within the president s budget last year have new penalties for when there is aniation and tackles the issue whether that Budget Proposal aligned with your not sure without details but its a great start to have a conversation with mike okay, moving on tax credits this committee passed legislation that would reduce our carbon footprint. However some of the edits expire at the end of this year and unfortunately we are still waiting for edits and that is leading to some taxpayers and constituents reluctant to make investments. Myself and claudia have been pushing to extend these credits so they encourage not discourage Resilient Energy system deployment. In an effort to garner evidence of support from a bipartisan legislation, does the irs greater utilization in tax credits when theyve had clear guidance for a longer period of time . Absolutely. Thank you i yield back. Thank you commissioner for being here. You can answering all these questions. The United States system irs i know california because i came fr california they are different than justice because when taxpayers audit starts, they have to prove they are not guilty. 13 of those making 100 to 2000 2000, 25 of those making between 1 million to 5 million resulted in no changes. 15 of audit and tens of millions of dollars change a priority is millions and billions making14 wealthy individuals 1600 people connect millionaires and billionaires. Things no change. Is an imbalance and they are not paying unless enforce that they must pay. Im glad they are not targeting that so thank you. The increased audits for evasion and thats good what steps are you taking to reduce these audits . Costing time and money with no result in will want to the taxpayers alone. They should continue to do what they are doing this is about making investments in subject matter expertise to make sure we select the right cases and when we select them, we return in front of us we can identify where there might be pockets for systemic invasion. We have to get better and become more precise. Technology analytics some a. I. Solutions have been put in place plac irs must have taxpayer information a recent letter on employees and contractors so notes the irs is the only pain contractors the investigations were not favorable, especially 19 contractors in this investigation were not transferable 2023 get they retained access to one or more because the irs did not take action or disabled the systems so why should the fact that the irs conducts employees and co action for the access of the failed area next. Its absolutely critical only those employees with contractors who require or eligible for access in respect to 19 contractors, we have resolved with those 19 contractors and stay physically theres no evidence the contractors have information of any kind. Network access promoters no more access for the data and we have been able to eliminate those. Sometimes they still appear on a registry like for timekeeping so it is confusing. If the individual cant access that data and there is some kind of wisdom, they rightfully call us out but they dont have network access. We have to be as diligent aso make sure only employees with applicable timely access can have access question but my time has expired so like to submit in writing. Thank you. An oped piece like to enter to the record. In thi is legislation and there appears to be a lack in the irs funding credit process. Constituents the irs delays processing claims for audits for each lane. The tax credit claims the irs denied the credit with no credit offset assessing provider even though theres a credit. The irs released march 21 of last year get regulations to this day have when will the rule be made and what we need to do to rectify this problem . I appreciate the question if you willllow id like to go back i dont need a history just when are you going to be able to finalize the rule . I will get back to you as a response. The subcommittee chairman wrote a letter july of 2023 requesting copies detailing recommendations of 30 billing unprocessed paper filter information in march of 2021. These raise the question whether information reporting should be scaled back to reduce the burden site on taxpayers recording information the irs is not keeping you. The original response was requested by august 8 2023, thats 192 days in review. For the irs provide this documentation voluntarily or consider other means . I apologize. Its important responses to all congressional requests for documents or information from this committee 192 days, we have issues . I will go back and make sure its forthcoming. I will get back to you with a firm date. Sarcoma earlier the chairmans question on sentencing of the irs employees thousands of americans multiply the individual is before a short period of time than they should, how many individuals have had their information i want to quote an exact figure its too many but its in the tens of thousands. Do you know for entities and individuals . Sharing information we have the response ability reach out to impact taxpayers theyve noteds the situation. Can you look up the information . Have you asked to return the stolen information . I believe the Justice Department has done that. Ill have uptodate information on the. For some sensitive assistance with adequate control removal of data by users how is it possible the irs does not know the data systems . I was the system when this incident occurred. Thats no longer the case. We have invested significant time energy and resources and dramatically changing Data Security profile. We have hardened Security Posture including introducing and implementing all necessary audit so this activity happened today from of the risk of succeeding is much lower. The probability of succeeding is lower. All those would be not just talked about but implement it. We made our way through most of it but it keeps growing because of the risk below its a is always risk and we have to focus on training and control. Thank you mr. Chairman thank you for being here and we had a great discussion about modernization of the Computer System and this is sniffing challenges and your applications are still in the wisdom and great policy its very obligated so i want to update a little bit the irs Living Systems of how to allow user access data, im wondering where are we at moving through the system, can you extrapolate on that . Theres two main systems that underlie the irs infrastructure. Individual master fire and thats where all the returns when they come in, that the transaction record. We are close on the individual master fire we are months away, probably april may june timeline but moving it into a fully modern environment a vital step before he would go the club so to do list to get to the cloud one more step that will make it clouds ready. When cloud based . I know the next key milestone is in the april may timeline. How long from their to a cloud environment, i would have to get back. Our data in going paperless. To file on paper if they choose but we want to convert that into machine book before it leaves our mailroom and thats purchasing the equipment and process to make sure we dont have paper anymore. You mentioned a b we are trying to beat these metrics as we move forward. Critical path with our milestone. Can you commit to the committee get the information about this is the first time we are hearing this i would love to know again accountability this is where we are at Office Quarter and next quarter. Not only what tax funds but also what does it mean for taxpayers . Is a lot of benefits when we gete there. A lot of education all of these online Tax Companies as we online so much more efficient and so much more and thats why i am pressing the i look up Customer Service in todays world when youre on the clock, theres so many benefits and we see it in the data and thats why i push this. Once we get to a cloud basedsystem we can do more a. I. , talking about earlier can you discuss how you use a. I. For enforcement and how can we look forward to that when we get to a cloud system . We are being very careful with deployment of a. I. Making sure we follow the right ethics and ensuring a in this hearing no bias would be introduced. We are doing it exactly. There are key places we are introducing a i pray first in our call center so we are using checkbox so when you ask a question before you get to live, they are using language information to get through andre done and done more quickly so thats one more example. Going back to this making sure we select the right cases for audit, there is sophisticated modeling that uses advanced math and data science it means we are more likely to pull a case the honest taxpayer doesnt get burned into dishonest taxpayer gets accountability. Again pressuring as much as possible to modernize be 20 years hopefully we can get done thank you and i yield back. Thanks for being here we are getting down to lower this is where the real work gets done. Just getting. Wonderfully strong workforce for the irs i have many colleagues and friends and everybody i look at my time before Congress Knows a Management Consultant and i wish i could be working on this project instead of in a congressional role because to me it would be simple. You have a bipartisan strong agreement modernization and my colleagues spoke a lot to it so i wont rehash but there is commitment there and should double down and triple effort to make this happen assess the Workforce Needs so i opposed democrats built ira the huge expansion but when we pulled back we want to keep a focus on the modernization and we reassess and go about figuring out whether workforce thats the way i hope we continue forward realizing heirs of Common Ground and we cant get anything done in the Common Ground and remove in the right direction. My constituents, its painful your offices we state share the same Federal Building and we have an excellent relationship so thank you for that. Ill echo what my friend from georgia tech, is an area we can improve on and double down on the efforts. Thank you for the comments on modernization and digitized members of this committee ive raised important. , can you discuss agency is prioritizing these initiatives what is immediately working on, something accomplished down the road but we could make it happen quicker if you get more collaboration from us concerned about the level of the direct that . We want to have a big impact for taxpayers that benefit them so i start the call center. This is a place where there is historic attention lot of taxpayers end up coming to the call center hoping for smooth and better experience. The changes we can make not about hiring additional ones, its about modernizing. You look at call centers and industries around the Public Sector organization, there are both a. I. And Technology Solutions that make it operate more smoothly. I go to web tools we have online accounts where individuals and businesses and register and have their own personal account with the irs so think about what that is today versus your experience with the Online Bank Account and we have a gap. There are certain things you can do with t account and your Favorite Bank online account and it is to close that cap. Its not just about fixing the website, it is entire Technology Infrastructure underneath the house to enable modern experience for taxpayers thats where the focus should be. I think there should be bipartisan agreement we want julian the taxpaying process. Regarding the tax credit, that come together in overwhelming fashion, can you give a sense ive heard from businesses anxiously awaiting further claims to be processed how is the irs work preparers in the Text Community to ensure payments continue to process the legitimate one . The Taxpayer Advocate if you have a hardship, we working to prioritize hardship. Most of that is working with the Taxpayer Advocate in congress and others to prioritize those that are most because of hardship cases. That doesnt mean they wont be approved. Sometimes you realize youre not eligible but we are focused on sure to get restitution. I may be calling myself. Thank you very much. I believe the top guys would agree with your statement earlier. The lower part closest to the peak and am proud we are all here. By increasing the credit authorizing Monthly Payments monthly of the tax codes deliver relief to American Families. Middleclass americans more money in the politics in their pockets and claim circle, every Republican Congress with these provisions expire. We did see progress from republicans last month we passed a bipartisan package. Ensuring kids and families that need to credit the most. The overlooked provision the maid is so effective. Monthly checks. They have Monthly Payments and we boosted monthly incomes to put their money back in their pockets. Making payments monthly instead of annual power to change the lives of working peopleuntry and it sounds like something republican should support and if you listen to what they want from the tax code. Given the progress and Lessons Learned in 2021 the irs has much of the infrastructure acknowledged to rule out fast payments of the Child Tax Credit if Congress Acts . Remark about official moment for us update our processes and go through the effort and resulted successfully. We now memory should be able to implement that easier than the first time. One of the things iinformed about his it wouldnt cost that much so something i know would make a difference, some people say its only 250500 or 700 a month working people that is a lot of money to make a difference to make ends meet. Another aspect making the Child Tax Credit effective is ensuring taxpayers claim the credit are treated actively. Last year i wrote a letter requesting irs to further analyze and report listing data by race and gender can help us better understand how historically marginalized winners are impacted by Racial Disparities in audit selection. Any information about the case of practices writing disparities and be taken to address disparities i mentioned. Di tc audits because audit volume was in the report is one of the main drivers. Eliminating the disparities and further make sure we are constantly evaluating and this whole issue by independent report to partnering stakeholders operations along with this is article strengthening those partnerships in part of the plan plan. When establishing a racial Economic Equity working group and the some issues we feel is important because if americans feel the tax system is fair they are more likely to comply. My colleagues have a wide range of question some concerns and i want to talk about the casework in my office. George has worked closely with my district office, my understanding the new york delegations a total of 1688 open cases with the irs my office. The number one issue is stolen returns. I believe we have 14 current case with the irs with over 1 million in stolen returns for criminals removed and replaced the name on the check. It is obvious inside. It does not allow individuals or direct deposit towards issued and we are in this and the cycle. With one of my constituents having to check replaced three times. The irs does not allow direct deposit over 20000 or 25000. I understand these are not fully compliant to irs the department of a few questions and how we can Work Together to rectify this issue you know the cost but its costing the taxpayers. I dont have a mentor, i do think youve identified the rights of people to come together mocha head of the Fiscal Service and treasury that operates payments and platforms send the checks for direct deposit. I do have a lotovation around open cases. Ive referenced it a few times the taxpayer bill of resolution. They are having to receive a check three times and we are not eating that possibility. Are you working with the Postal Service to address this issue . Not aware that we are but i will getack to you on that. Since all treasury issues school i want to with leadership on the remark what options do you think are available for this tax return theft other than getting into reissued paper check and revisiting direct deposit issues issues can you do that . I want to look into why that is reasonabl. It should be an option if they want to move to direct deposit, but should be an option and there is truly a cut off a 25000 which ive not heard about prior so i want to work with you on this issue i hope you will follow up so we can get to the bottom of this and maybe theres a followup meeting we can have with somebody from treasury to discuss this. Million dollars stolen from constituents in my district 435 members so its a lot of money. There are bad people in the world trying to take advantage of our constituents and american taxpayer and we got to modernize our system and keep up with this this. Thats where the government steps in and prevents be helpful helpful. I do appreciate the readership behind me. I want to say that because im number 25 on this. I do want to talk a couple of issues and i will start i think what is importa the future of our country as a brokers and i want to talk about preserving the history of our country the conversation you and i had which is historic tax credits and preservation. To give you a minute to think i would like to echo comments from my colleague from illinois relating to Child Support because that deadline is looming. I will probably revisit you with that. I trust you are familiar with the recent released will regarding requirements for digital asset. You know the rule is finally proposed the iris by their own admissions oversee 8 billion in returns for justice one. To put it in the 2022, the irs received 5. 45 information returns and with this proposed rule the irs will receive 150 . We are talking about the amount of employees. As the irs equipped to handle this increase . It is a lot of moving on these issues, weve issued the proposed regulations with hundreds of thousands of comments we arei feel we are at an inflection in terms of Digital Currency and how to approach it with different perspectives of government. We have to be prepared outcome of the regulatory process to have the technology and process to execute thosee will only propose is we have confidence on. Thank you and i report amending the rule between traditional finances. I understand these roles go beyond what finance requires integrals reading more level Playing Field and the transactions time to focus on current admission and not shifting through unnecessary data. Probably looks like i wont get to this one but we will followup. What is the timeline and permitting the rule regarding textual requirements do think this is a realistic timeframe . The child to have it is my counterpart treasury that i co lead with so i want to make sure were on the timeframe. I think we got 100,000 comments under regulation so figuring out the conjugated issue and we dont want to get out in front fair vetting so i dont have a specific date but i will work with treasury to get that. It is my understanding there is a short window for clients and traditional finance and to comply when implementing this role, the tradition being five years and as it changes 16 months is there any reason for that . At my fingertips, i will have a full explanation but we will give you the underlying basis for the. I appreciate again given this new industry and new technologies and innovation, i would recommend you reevaluatethe timeline to give enough time to comply just as traditional Financial Market did. I will get back with you on the tax credits and preservation it is very important to me but i appreciate your time. Thank you commissioner for hearing before us today and we look forward to the followup swers from the request of our members. Please be advised members have a few weeks to submit written questions. Those questio be made part of the formal hearing record today. With that, the committee stands adjourned. Discharge. [inaudible] [inaudible conversations] conversations. [inaudible conversations] [inaudible conversations] cspanshop. Org online store. Browse through our latest collections. Apparel, books home decor and excess race. Theres something for every fan. Shop now or anytime at cspanshop. Org. He spent is your unfiltered view of government funded by these Television Companies and more including cox. When youre connected youre not alone. Cox ports csservice. A front row seat to democracy. If you ever miss cspan coverage you can find ie at cspan. Org. He is a key hearing debates and other events featuring progress to guide you to interesting is were the highlights. These points of interest appear on the right hand side of your screen. This makes it easy