Taxpayers and corporations. All right the joint hearing of the subcommittee on Government Operations in the federal workforce in healthcare and Financial Services committee will come to order. Welcome everyone. Without objection the chair may declare a racist at any time. I recognize myself for the purpose of making Opening Statement first and foremost thank you all for being here. This crazy bit of times we are in we are time is extremely important have been plagued with dysfunction and complexity dysfunction is acrosstheboard of data breaches and Identity Theft to slope audits, backlogs and Terrific Customer Service at least for my constituent. Despite years of oversight and watchdogs not much has changed my collect on the other side of the aisle believe more money and more power is the solution. In fact, and last years yearsInflation Reduction ActCongressional Democrats 80 billion, 80 building with the irs. With this influx of cash this funding reinforcement of improving Taxpayer Services. Taxpayer Service Processing taxpayer returns received a 9 funding. With enforcement receiving the 69 funding. The irs not the irs needs work on getting the American People their money back in a timely fashion not auditing the lower and middle class americans. The irs in my opinion is to invest in highly skilled experts not something hire more employees but higherquality not so much quantity. Put simply the irs just need to do a better job. There needs to be consequences for inaction. If a private business did with the irs on a daily basis it would quickly go out of business. If a private business repeatedly left you on hold for hours as mike to constituents and myself has experience at a time we didnt answer the phone call at left sensitive Tax Information unsecured or at last it entirely, it would face criminal penalties and go out of business. But since the government is involved there is no accountability or any accountability i have for its poor performance thats one of things i like to talk about is who owns it . What is the accountability . But also what are we doing to improve it . So even if we did give more money what would these Solutions Look Like . We can sit here and complain we also to focus on solutions. Hardworking americans accept this because they follow the law they know they face consequences like penalties and fines if they dont. Those penalties and fines are their money. It comes out of their pockets. A fleet make a mistake on our tax return that costs us. In contrast when the irs makes a mistake there are really no consequences if there are elective talk about what those are. Do people lose their jobs . Are they put on action plans . Do they get demoted . What are the consequences . I dont think its too much to ask to have the federal agency played by the same rule as we expect the American People to play by. The irs asks for more money to fund more mistakes, more data breaches. It should not be acceptable we have to hold our Government Agencies to at least the same standard will hold the American People to with their tax dollars. Instead of doing a job instead of processing tax returns in a timely manner americans are waiting months and sometimes years for money that is rightly theirs. The issue is yes, we pay them interest on that money but a lot of businesses are going to go out of business by the time they get there rightly deserve money instead of serving taxpayers the irs is something as simple as answering the phone the irs carelessly leaves her Sensitive Information unsecured and vulnerable to leaks, fraud, Identity Theft. Frankly the irs is the perfect example of a bureaucracy failure. There has not been a lot of accountability if any accountability for it. We talk about these issues today. We need to remember these are real problems that impact real people with real money, their money. Since i entered congress countless constituents have approached my Office Asking for help with the irs. I have constituents who filed returns on time in april have yet to receive the refund. When they seek help from the irs they cannot get a hole of anyone on the phone. Even to get an update ill cover those a little later. Often they went hours to reach Customer Service representatives only to get disconnected due to an overloaded switchboard. Which you can imagine and senses them in the frustration goes to the roof i have constituents were Business Owners who have outstanding applications for the Employee Retention tax credit. One of these cases has been pending since february. These wait times are unacceptable for Small Businesses because they depend on those dollars, as posted to the pandemic we are here this afternoon to demand answers with accountability on behalf of the American People. Commissioner, thank you for being here to the subcommittee today i look forward for your fruitful discussion. I know recognize Ranking Member for the purpose of making Opening Statement. Thank you very much madam chair. Good morning, oh good afternoon. Im living in another universe i see. Welcome everyone and thank you very much madam chair. Paying ones a fair share is an important obligation and what is known as the American Social contract. With an estimated 1. 6 or 168 individual taxpayers file returns this year alone processing returns the volumes and higher returns of paper require sufficient personnel modernized technology and streamlined systems. A little over a year ago President Biden sign the induction Inflation Reduction Act or the ira into law. As most of you know this groundbreaking legislation which the irs at a critical time right before the 2023. Delivered 80 billion to the irs over the next 10 years. The fund allowed the irs to hire new staff, to modernize all of its technology and to audit wealthy tax cheats who had been getting away with murder. The posterboard behind me illustrates this is a win, a win for low and middle class americans. These ira backed improvements achieved, as you can see, achieved 87 peak levels of performance and Service Success as a result of their implementation. 87 higher than any other time timeof the dramatic increase fra previous tax filing year alone. 5 million more calls cutting the wait time down that 86 . Serve more than one or 40000 additional taxpayers and clergy backlog of unprocessed 2022 individual tax returns with no errors. Youve got to be doing something right to have those kind of numbers that are certifiable and verifiable. Those are real and tangible and show investment dont take my word for it. By the way i would ask unanimous consent to be entered into the record showing the agency will continue to prioritize high income individuals without running away, turning a blind eye shows investment in the irs improves Taxpayer Services. Unfortunately after this years tax Filing Season, and the budget negotiations the nation was forced to heed the persistent call for rescinding the irs funding. There are a lot of bogeyman stories that took place all over the floor of the car about what is going to happen thomas virtually scare the american taxpayer into believing something that was not true the reality is the agency kept its promise and commitment to the nation. When it stated goal of cracking down on delinquent tax evading millionaires theyre getting with robbery. The agency kept its commitment despite cuts to its funding and the persistent and dangerous mischaracterization of irs agents in an army of bogeyman waiting to kick in your door and lock you up weve got to stop playing games like that i make sure middleclass americans know what the facts are trade with the intentions were and more importantly what the goals have been in the conclusions it. To the extent irs has collected nearly 160 million, in back taxes from individuals earning over a Million Dollars speaks volumes of who they are trying to help and who they are trying to keep us from being taken advantage by. The millions of dollars of missing tax payments were not an accident it was not manna from heaven was a clear deliberate effort to make sure it was so it should be by that agency and to make sure tax cheats particularly wealthy wealthy wealthy ones did not have a safe haven. For example the irs individual one individual who last month had to pay 15 million in restitution for falsifying personal expenses as acceptable business expenses i dont know kind of neighborhood that person lives and when you get that kind of find it suggest you been getting away with serious crimes and was caught. 51000 squarefoot mansion. Whoever it was got caught. I really am. That is the affront that is the tragedy here. That is why weve got to find a way for the irs to protect middle income people going after the high income abusers. These greedy checks cheats its amount of money owed and collected by the irs on time. In other words, the more millionaires and billionaires who skirt around with paying their fair share the larger the burden falls on hardworking Everyday Americans who pay their fair share every year on time. The irs reports small declines in taxpayer compliance can cause billions of dollars in lost revenue underscoring the need for simplicity and efficiency during the tax Filing Season i co led with my colleague and with mr. Conley of virginia to trust in Government Act which directs the department of treasury to expand electronic tax filing and other via email. We also led streamlining irs act requires tax filed on paper can be gradually digitalized irs heated that task and request by expanding not reducing but expanding as a digital scanning efforts this tax season. Congress must continue to ensure the irs has the funding and the resources necessary to maintain its remarkable progress since ira became law progress is unheralded in many respects and then noticed by others who hide behind the fake characterizations. Make no mistake further cuts will hamper the irs ability to execute transformative change. I urge my colleagues on both sides of the aisle to preserve funding as we move forward from our current stalemate get back the Government Operations. Going to thinker witnesses for your participation in todays hearing i particularly looking forward to hearing from commissioner about the status of the irs upcoming tax Filing Program known as direct file. We have the duty and obligation of this committee to assure the government operates at a toptier level for all americans. Looking to discuss how we could work to support those efforts but i yield back madam chair. Thank you for a note recognize chairman sessions for the purpose of making Opening Statement. Chair thank you very much. I am sorry to each of you for being late. We have had a business in the another part of the complex. Commissioner thank you so much for being here. And ms. Judy, thank you very much for the opportunity for us to meet today we spoke about yesterday commissioner is one of natural inquiry that this committee has. Its about the effectiveness of the Internal Revenue service as it relates to their ongoing business perhaps it goes in thats why we are here today. The irs its performance does do its job they are properly funded we need to make sure that they treat all people fairly. Not just some that they would choose too. We believe there have been reasons why you were brought on board the first time as commissioner, acting commissioner. We believe there are reasons why you are there today for perhaps a second theres a lot of things that we will want to get into. But perhaps his most important for me too say that i believe confidence in the irs is what were asked to pay i spoke to about this yesterday. The sizing models the professionalism of the ability not just have a good answer but to get through on the phone. Without having to wait for hours. The effectiveness of the irs and the ability to get the job done is importance. We know the irs we know theyre going to cooperate with this you told us that yesterday you and i spoke about you did not want to get into actual the idea that you will cooperate. You will cooperate fully with us. You will make sure the questions we ask why you do not have to go into the specifics about those, certainly not names certainly not times about your agreement that you will cooperate with this committee and with congress in those regards. So, we know you have been given some extra 80 billion we are going to want to talk about that and the deployment of that and how thats going to aid in do the things that would be necessary. I think its important that you know the irs touches almost every single american. The information we get back comes at a time you defend a lot of ground. Thank you for being here today i want to thank chairwoman mclean for allowing us to start this meeting without me. Madam chairman i yield back my time. Checks i recognized Ranking Member porter for the purpose of making a new statement. Have you heard guests by unchecked deaths by thousand paper cuts its how to get rid of something by suddenly attacking it over and over until its finally gone. Death by 1000 cuts. For too many years washington politicians have worked to get the Internal Revenue service to cut the irs time and time again how do they do that . Phase one they start by attacking its credibility. It isnt easy to love it. Believe me opportunity know that too. They go on tv and give the irs a verbal falsely suggesting the irs is spying on us. Targeting us for our political belief or going after us to pay more money than we owe. What a bunch of bs. Even though those claims lack any evidence we might be inclined to believe negative things about an agency that collects taxes. Even the bible is not that kind of Tax Collectors. These politicians easily exceed make it easier to the irs. Q phase two and attacks on hardworking mus on the republicans went hard after the irs. Under the Obama Administration republicans falsely claim the irs was unfairly targeting conservative organizations more than a progressive applying for taxis and havoc. Irs spent 28 million and produced 1 million pages of documents in response. Ultimately republicans are not proven anything. They instead use it to justify diverting resources from irs Customer Service, itn it and enforcement. Thats what it opportunistic politicians wanted to turn people against the irs cannot do his job then take one last . That brings us to phase three, budget cuts. When politicians tell us Tax Collector is after us, no one wants to fund the collector. That is exactly what is happened opportunistic politicians have succeeded in cutting irs staffing 20 lower than it was in 2010. Even of the country has grown by 7 since then. The agency we need 52000 new irs employees just to meet the agencys needs. That is how bad its gotten folks, year after year of politicians taking slashes at the irs. Opportunistic politicians have not succeeded in totally killing the irs by 1000 cuts. Its badly wounded. Who suffers from all of this . We do. We all suffer. Only help with our taxes and no one is available the irs to pick up the phone blame a politician to the irs budget. When we went the irs to make tax filing easier work harder to make our information more secure, the irs cannot invent and technologies that cyber cybersecurity, blame a politician who the irs. When we pay our fair share of taxes make sure billionaires do the same have the resources to do it blame a politician who the irs republicans led to attack the irs instead of making it work better, other republicans are slashing our entire congress at the same time. To stop congress from doing its work because they have not been able to elect a speaker of the house so we cannot pass legislation. The most opportunistic republicans have spent so long attacking our government that now republicans dont even trust each other. But that is what the opportunists wanted to weaken congress, a weak irs. It is what they call smart government. But in reality its a federal government and cannot serve its people. Right now the opportunists are creating that reality. Bipartisan coalition of reasonable members of congress can stop them. Today, everything that we do and say matters. Before my College Block the irs, consider humerus might be one of the thousands of cuts over time that weakens our government and hurts the American People. But the irs needs to serve the help congress can be an effective partner if republicans ever elect a speaker so we can legislate. I yield back. I placed a thinker witnesses commissioner and jessica lucas, dannys commissioner is the director of strategy issues to hearing to what you have to say on todays important subject. Rule 9g the witness will please stand and raise the right hand. Do you solemnly swear or affirm the testimony were about to give is the truth, the whole truth and nothing but the truth so help you god . Let the record show the witnesses answered in the affirmative. Thank you and have a seat. We appreciate you being here today and we look forward to your testimony. Let me remind the witnesses we have read your written statement it will appear in the hearing record please limit your oral statement to five minut