The First Virtual oversight subcommittee hearing i and the ways and Means Committee. Before we turn to todays important topic i want to remind members of procedures to help navigate the platform. First consistent with the regulations members are responsible for an muting themselves when recognized. Second, the witnesses must have their cameras on at all times so even if you leave for a moment or a few seconds, leave your camera on. Third, we will dispense with a serving and then go in order of seniority. Alternating between minority and majority beginning with members of the oversight [inaudible] authorized to serve as the chair in the event i experienced technical difficulties. Thank you for continued patience as we navigate the technology to continue serving the country together and its a great time of need and with that i will now turn to the important topic of todays hearing. The hearing will focus on the issue of tax fairness. I welcome the colleagues and the witnesses. I must note this is the first since the passing of our friend and colleague. John was the chairman democratic member on the subcommittee for the past 15 years. I selected the Oversight Panel when i first joined the committee in 2007. He led the subcommittee with the same grace and sense of purpose with which he led his life. While our styles are not identical, i commit to doing everything in my power to make him proud. Charged with conducting oversight of the programs within the umbrella of the ways and Means Committee, our jurisdiction is very broad. We are focusing on one of the most critical components, our voluntary system. Historically the United States has had an excellent record of compliance with our tax laws. Whether you are rich or just a regular joe. For five years the president has refused to show his tax returns. Hes broken with a history since president nixon and sabotaged. 2017 i led an effort to bring some of the business and personal tax returns. The law is clear under section 61, the Committee Shall be entitled to see the returns. Its our responsibility to restore the Publics Trust in the system by ensuring that the president s returns are impartial and without political interference. Our chair man formerly requested that returns in april of 2019. The administration with the secretary and the commissioner refused our request. Theyve been breaking the law for 555 days. The house issued a subpoena. They refused to comply with anotherhe area that our subcommittee will be looking into. Subpoena powers in the constitution. Under the rules of the house. Consequentially being stonewalled by political partiel and judge. We have plenty who reported the selfproclaimed billionaire President Trump paid only 750 in taxes in 2017 and in 2018. In the ten previous years, he reportedly paid no taxes. I would like that deal. Im from new jersey. We have teachers, police officers, firefighters, ambulances, School Bus Drivers that pay more in taxes and how do they feel when they see the leader pays less than they do. Esthe tax system that lets a supposed billionaire get less than. Thats why we are holding todays hearing and i want everyone watching us to know i invited the commissioner to join us today and he refused. I wonder why. What is he afraid of. Why is donald trump afraid to disclose, is it because we may learn that the true source of the president s socalled wealth is not clean or what dark figures he might be holding onto. We have an expert panel of witnesses and group of experts in both sides of the aisle with answers to the questions i look forward to the testimony. But first, our Ranking Member mr. Kelly for the purposes of an opening statement. Weve served together on the committee. Thank you. I look forward to working with you. Thank you mr. Kelly. Perfect. Okay, the first hearing weve been able to do together. It was an honor to serve on the committee with john lewis. Certainly an inspiration to every american. He led with dignity and the other. In addition to being legislators we are americans watching making sure their money every single penny are being spent wisely and to their benefit therefore i look forward to continuing this work hopefully we can find a common areas to Work Together on behalf of the American People. I understand today may not be day for this bipartisan agreement. Today democrats aresa going to continue their effort to weaponize the tax code for the political purposes. The democrats sought to publicize the statute. Despite no evidence this issue was raised by my friends on other sides and amplified like the New York Times m and thiss so much like groundhogs day. Once again with the exception of not being about, mine on the using taxpayer money to drag us through another campaign debate. That was resolved four years earlier in the people spoke at the ballot box. For this administration to be elected including my friends on the other side they cannot simply let go. Theyve been challenging it and never accepted the outcome. Folks need to decide if he will get another term or not. Why use the committee as an instrument of these democratic national. Why would anyone. To properly if this can happen to the sitting president of the United States, it can happen to any american. If this can happen to the president of the United States it could have been to any of us at any level. The Ranking Member and i have written [inaudible] the release of this information and i asked unanimous consent to enter them for the record. Your microphone is off. Its on. Without objection that will be included in the record. What you presented a moment ago. You couldnt hear me . I couldnt before. Without objection its submitted. That is correct. Okay, thank you. The New York Times report is underwhelming to say the least. It does allege any illegal behavior currently states that more information is needed to evaluate specific transactions were items on the returns. Despite not having all the facts it settles for insinuations like this may be problematic. In my book this just is a wellwritten opinion. Its a manipulation of the outlet. If i wrote a 50dollar check you could say the same thing. More information is needed to verify, but it could and it might be problematic. We just dont know. You would need a lot more information and that is what an audit is all about. It gathers more information and makes a determination. That is the way the process is supposed to work. Public pressure without evidence aligns the work that they do and puts political pressure on them to reach a particular outcome, so we are weaponize thing an ane know the democrats dont like that. Ive heard 47 months of that and im happy with the last result weve heard more than that accepting the results of the legitimate but we dont go after the duly elected officials. We dont know because there hasnt been anything pointed out that the president has a serious problem. But the newax york times clais to review them and even they say owthey dont know for sure. We need to let them do their work and finish their audit. They are the only agency in the position to address any possible legal issues thats my understanding the president and Vice President s tax returns are examined every year. A day number one democrats tried to publicize the tax returns for their political agenda back in 2017 members of this committee claimed we needed to seeee the returns. It. It must have been disappointing when it didnt reveal any previously unreported connections. Theyve looked for other ways to weaponize theey tax code. This is a very dangerous procedure and one that i fear the integrity of the tax code will suffer greatly as a result. The idea that the president did something wrong, give me a break. We had a hearing on Corporate Income taxes and businesses pay all sorts of federal, state and local taxes, property taxes, sales taxes and on and on and on. Some years i pay more in taxes than others andd other years i pay no taxes. Some years im simply more profitable. The utility misleadinutility mia Business Owners tax situation. They made millions of dollars in all sorts of taxes over the years. Democrats suggest. There is nearly 1. 4 million. Going forward i hope we can find ways to improve the lives of the American People so that the Government Works better for them and not simply political gamesmanship. Our constituents want us to Work Together to solve problems and not keep political points through any innuendo, insinuation. A. I havent seen any actualevi. There is an unauthorized leak. [inaudible] i want to work on that information and we should be more concerned about that and the endless pursuit. A. Kim really looking forward [inaudible] thank you to the distinguished witnesses. A senior fellow at the brookings institution, most recently served. The author on a new book on President Trump, we know him well and control the ethics issues. Thank you and we are ready. Thank you, Ranking Member kelly. I apologize, you will not lose anyan time. I want to introduce the panel. The next witnesses at Washington University school of law in st. Louis missouri and specializes in government ethics andd National Security and leadd anticorruption workshops around the world and ethics training to agencies. Professor serves in the university or more school of law with most frequently cited tax dollars. Recently awarded a grant focus on the transparency. Ssthe fourth witnesses steve rosenthal. He served as legislation counselor for the joint committee on taxation. The final witnesses the scholar and professor at the university of iowa. He taught there since 2011 and focuses on issues related to tax, administrative and constitutional. I would ask you summarize your testimony to five minutes or less and please keep an eye on the clock that should already be pinned to the screen. I will notify you with the tap ofhe my gavel and know when thee are 30 seconds left. I want to thank the Ranking Member kelly for and testifying at this hearing. It favors the wealthy at the expense of average folks and taxes income earned by people working two or three jobs to get by. In the system like much else about the tax system that makes no sense. Its made things worse for regular americans. T conflicted the trillion trils worth of damage on homeowners taking away mortgage and Tax Deductions this is a structure. He could be the poster boy because it is a basic lack of fairness. It indicated he paid no taxes and only 750 in those. He may have to pay back 100 million as a result. That is the subject of the audit of course. We shouldnt have to rely on the media revelations to learn these things and many other questions still remain open even after the story. Thats because the president refuses tpresident refuses to dix returns. A break with hisde predecessors going back for decades. Now that we have the time is reporting we do have a better idea of why he may have held back those returns. Of all the secrets hidden in them, what concerns me is the president s debt. He would have to repay or refinance over 3 million worth in the next four years and thats only a partial picture. He will need help covering the loan. That makes him vulnerable. Americans have to worry about what mr. Trump may do. The original sin of this president and administration is the refusal to divest the interest and another breach of norms and not just norms but from the first minute of the term hes violated the prohibition on taking things of value or monuments as it was referred to innt the center. It raises additional question with licensing payments w of. Resulting in over 3400 conflicts byby one. Hes hosted foreign leaders that the results and spent over 140 million. Hes built the secret service. Mr. Trump should carry his weight for the country just as average americans do and as a matter of tax and fairness. Professor you are recognized for five minutes. On the oversight subcommittee thank you for participating in todays hearing. There were three issues first the president s tax return and second, i need to know what this the president zero so its about time this afternoon its eliminated. Faced by officials and how congress can mitigate that concept. These coalesce in difficult situations. This stems the structure about government. The questionable deductions with 900 in taxes despite having more than 200,000 in income. After that, the irs opened a Second Review of the tax returns. On the second go around, they rejected the claimed a deduction requiring him to pay more than 400,000 on back taxes. Atat the time they would be extremely. Fifteen were ordinary taxpayers. President trump has repeatedly retaliated against officials to follow the law. I describe in detail several examples of the retaliation retaliating against then attorney general sessions because he accused the campaign but it required the recusal and he followed. Trump retaliated instead of just doing what he wanted. Defense officials and the comptroller general accurately warned officials the president s hold violated the act. Instead of just doing what trump wanted. Congress could mitigate the concept by increasing transparency. If we require Public Disclosure they get the audit of the return and it would be publicly accountable they decided to revisit the return after the information would be linked to the press. I look forward to taking your questions later. Professor, you may begin. Thank you very much. I would like to make four main points, the irs needs Adequate Funding an important part of the taxpayers. They turn on compliance and in addition they had a significant pro compliance affect. Audits have an indirect future of those that are audited. Those that are audited have additional paths increased. Ther payments to have a Reasonable Service for taxpayers who need help. The office reported, quote. Moreover theyve declined more sharplyy at the top. Restoring the budget to at least 2010 levels. There is some taxpayers have more opportunity than others. The irs found. There is no withholdingtheres g requirements but there is substantial information, 95 . By contrast where there is no reporting they estimate a much lower rate of only 45 . Enforcement is an important part of the taxpayers. Thee irs mission is to provide the a taxpayers. The commissioner once wrote that, quote, the tax system depends on each person meeting his or her. It demonstrates to the taxpayers noncompliance doesnt pay. It also includes more enforcement where there is more opportunity for compliance. Even if they cannot be put down for example thank you for the opportunity to testify on the importance of issues. Im happy to answer questions. You are recognized for five minutes. The views expressed are my own and shouldnt be distributed to or organization organization. Tiuntold donald trump and since president nixon. The audit of President Trumps income taxes let me address each of those in order. Every income group perhaps the tax returns for 2017 represent a businessman who had a big year. According to the times, President Trump would only be accurate and we cant tell if they were. In the 1990s, President Trump generated close to 1 billion. However, according to an earlier story, President Trump omitted income. Trump claimed another big loss, 700 million. The irs continues to audit the president s 2009 returns, including. We cant tell without more information whether they are conducting these audits fairly and impartially, but they have. Separating the delay that is attributable. Including the irs i encourage the subcommittee and full ways and Means Committee to exercise the oversight process. Thank you, and im happy to take any questions that i appreciate your comments, mr. Amy coney barrett. The taxpayer fairness and generally we will have troubles with the issues and learning how to vote and so on so we are talking about it in the context of the virus. I dont want to turn it into a punching bag or issues related to lowhi income persons. It cuts across all society. With respect to the tax specifically, one antidote. I will explain the challenges indirectly. A few i years ago i got a tax lw professor asking for a few thousand from the irs and i could tell exactly what was wrong. I prepared a couple of pages with the law and explanation and supporting documents, all together neatly and wrote heres why yohereis why you are wrong,. Sometimes you get an automated layer. I am pretty confident i did everything right. We had a human being at the irs all through this time including eventually once an actual lawyer looked at it, we told the tax court this is over. First you probably wouldnt be able to get everything right the way that i did and the irs told you you were wrong you wouldnt know that the irs made the mistake and we need to Pay Attention in terms of the fairness to give thought to how theyey interact with the tax system because it isnt fair, lowom income persons and i would encourage you to think about [inaudible] other measures to help those thatho are the most vulnerable n our society. Whether were talking about the stimulus statements or tax cuts or implementations everybody should want a stronger irs and i will echo the statements but the funding should be taken seriously. Lastly into the trump tax return flight i hope we can slow down the rhetoric a little bit. How trump appears on the television [inaudible] but this idea that they are somehow in the pocket of the president and theyre are not dog their jobs carefully and faithfully is so offensive to her and the morale i hope unless we have the grounds for it, every day for a reasonable salary. Thank you very much. Without objection each member will be recognized for five minutes t