Transcripts For CSPAN2 IRS 20240703 : vimarsana.com

CSPAN2 IRS July 3, 2024

Testifies the 2024 tax Filing Season and President Biden 2025 budget request for the agency. During the hearing the commission from the Senate Finance committee and irs efforts in improving Taxpayer Services. [background noises] finest commando come to order. Today, the Committee Meets to discuss irs budget and tax Filing Season was closed yesterday. I want to thank commissioner for being here on a very busy time for everybody at the agency. There are lots of issues to discuss. One that is certainly important to the American People direct file. Anyone who denies the direct file pilot was a huge success,re my guess is you are living in another universe but its open to a fairly small percentage of taxpayers but the reviews i got from its initial users were overwhelmingly positive. It seems like a whole lot of people were very stunned that a federal agency, particularly one as frequently vilified as the irs was able to build a helpful website that works. The tens of thousands of taxpayers use direct file this year collectively saved millions on fees that they would have paid toward the taxis software giants. Website was userfriendly but is quick and easy to use. Did not hassle it uses up charges or add on services they did not need it. Direct file shows the irs could build a good tool that people like because it saves americans time and money. No surprise the people who oppose it are absolutely furious absolute furiousand once again g they can to stop it from growing. The detractor said it did not attract enough users with tens of thousands of newew users came in over the last week with the irs hit its goal of 100,000 taxpayers using the system. There is no doubt in my mind that this will be more popular every year. Others have said cost estimates were too vague. The fact is theres always challenges with Pilot Programs. Note the irs has tested the system and set of baseline theyre going to be clear Going Forward. Finally, there are some the whole project was unnecessary. They have said taxpayers have the option of using free filesystems through the big tax Prep Companies. They may have had a valid argument years ago because before the tax prep giants got caught hiding free filed optios from eligible taxpayers they were conning people into folk forking over hundreds of dollary they did not need to spend. Congress simply cannot go around trusting the big tax Prep Companies to do the right thing there were some of them their version of free file is the freedom for americans to pay them even more. The bottom flying direct files long overdue and Public Service and federal government ought to be providing to americans whenever it can. Hunters and the irs and Treasury Department rvalue and have a Pilot Program over the last few months for the person i believe this be expanded. Im looking forward to the day when oregonians come up to me im one of our 51 grocery stores. Ive been to every single one of them having had chicken and each one to tell me how thrilled they were to save time and money with direct file put on the topic of vastly improved and programs returned to the irs the irs answered live assistance than it did during lesters Filing Season. Call waiting times under threewi minutes. Save taxpayers 1. 4 million hours of time than previous years they would have spent basically listening to music and being on hold. Smash at school for inperson Service Despite this is success competently that been complaint on the other side of the aisle. Demonstrations asking for money to sustain the progress. Im not sure what is behind that may be going to go to the bad old days when got hold for hours and did not get timely refunds. This not make sense to me. The second policings in the road the irs is proving to provide topnotch level of Taxpayer Service when Congress Gives of thean resources. Just a few words to close on enenforcement the irs has announced some major enforcement efforts in the last few months cracking down on 125,000 cases what wealthy individuals many people who bring in more than a Million Dollars a year never even filed a tax return. Let me repeat that this is not people try to figure how to gain the system. They are sufficiently contemptuous of the rules they never even filed a tax return. Tax breaks hyatt flying executives who takes tax writeoffs for personal travel for example. And in my view similar abuses more blatant. Produce big writeoffs i find it hard to believe anybody Congress Continues to cut the irs funding or if the Inflation Reduction Act funding expires in congress is not add more, we know exactly what will happen. Wealthy tax cheats will have an easier time getting away with breaking the law. Lots to discuss this morning, collects him to thank commissioner for joining us. I look forll to the question and answer session. Thank you, mr. Chairman welcome again commissioner. I agree andd appreciate the wok youre doing and the progress that you have made. Theyre going to be issues that i at rays today however. The irs needs to be accountable for theay choices it makes, bece more efficient rigorously plan, provide full transparency andeh timely solicit real feedback from inform stakeholders Like Congress before acting. Despite claims 80 billion in new phone date would transform the irs into a 21st century agency, the president budget request indicates otherwise. While modest progress has been made, there are other areas where the agency continues to miss the mark. For example, last year i raised concerns i with the irs strategc operating plan including its vagueness missing line item cost projections. A year later, we are still missing important details. Yet, this years budget asks for even more on precedent irs funding. More than 104 billion. This underscores the initial was not a cure for the irs is not transformed and the president believes the only way that vision can be achieved is to spend more. While i support a transformed irs, this approach is not the solution. For 80 billion but would expect the transformational Customer Service changes and fully modern front end and back end it. Taxpayers have paid for mail to be opened several million of taxpayer correspondence remain unanswered half a million id theft cases remain unresolved. On average, years later. It modernization funding is also scheduled to run out. Years before the irs finishes updating its systems. I assume this is to impart to the bulk of the ira funding being directed to enforcement. I dont disagree with the enforcement answer collects my chairman has identified. Emblematic example of just spend more no questions asked is the direct file program. Despite already being a multiple of three filing programs i saybe that again multiple free filing programs offered by the irs, the agency embarked on a redundant government run taxpreparation project complete with all attended inefficiencies and conflict of interest. Just last week, the government t Accountability Office report a highlight of the many ways the supposed Pilot Program has not followedow best practices. Including key planning, budgeting and accountability failures. The report noted while gao could not determine how much the program has and will cost to operate, the irs not having provided sufficient information to do this the current tab far exceeds 100 million. Just to fiscal year 2024. For an option that might only serve 100,000 taxpayers this y year. In contrast the federal government spends less0 than 5 million a year to have two three million taxpayers served in oneon of its free income tax preparation programs. Where the irs to use this years direct file spreading to pay thirdparty providers to prepare and file returnsre instead, will literally hundreds of times the number of taxpayers could file. For free. The irs spending hundreds of millions of its finite funding to simply test to do something can already be done more efficiently with Better Outcomes and without the very real conflicts while simultaneously pleading for more funding calls for more oversight. Codirect file is not the only concern. Other serious concerns include the continued irs use of biased data post effective metrics to plan and justify its actions. Indiscriminate irs Enforcement Campaign sent pressure on us hot taxpayers and waste government resources. The irs is continued and disproportionate over improving commissioner, while i appreciate pthe positive steps the irs has taken during your tenure, so much remains undone at the irs in any victory lap is unwarranted. I look forward toim your testimy and i thank you, mr. Chairman. All right. Our witness todays commissioner daniel c the 50th commissioner of the irs. The consulting group. Before joining them now meant to be the control of the office of management and budget posting certain years before becoming acting commissioner in 2013. The office of management and budget in 1987 the policy analyst in the office of information regulatory appearance. Welcome,e. Please go ahead big x works chairman, Ranking Member crapo c members of the committe. Thank you for the the opportunity to testify the Filing Season and the irs24 budget. Please report the 22 a for taxis and open on schedule generally 29th. Historic Filing Season unfold since then. The irs received more than 101. 8 million individual income tax returns and issued nearly 66. 8 million refunds for more than 21. 1 billion. Inflation reduction act of one of the best Filing Seasons advert in terms taxpayers are seeing a difference. Then we did a year ago than 3 million calls we did in 2022. Main phone lines have improved we dramatically expanded service or walk and cites increasing hours and serving our taxpayers. New expanded tools on irs. Gov and you see heavy use. Several ambitious transformational goals at the start of Filing Season. Irs employees worked hard to deliver. Here are some examples to early april. We committed 85 level of phone service under main taxpayer helpline during the Filing Season. Due as of early april we exceeded that goal it 88 . That is a huge improvement from 2022 went only 15 of callers could connect and receive support from a live assistance. We commit to an average call wait time of five minutes or less on that main taxpayer helpline. We exceeded that goal with our main line of phones being phoned in about three minutes. These are some of the examples of how we are seeing historic improvements in Taxpayer Service the agency is rebounding from very tough and lean years during the past decade. At the same time Inflation Reduction Act funding has enabled us to make critical inroads in the most complex and largest of filers this is a sharp turnaround from the past decade but we were hindered by a lack of resources. Our compliance work includes focusing on tax delinquency non filing among high income individuals. Areas we are particularly concerned about. We are also responsibly leveraging Artificial Intelligence and hiring the subjectmatter experts to find tx evasion among the largest and most complex and corporations. I want to be clear despite improvements this tax season the irs still has much more work to do on many fronts. Closing remaining gaps on phone Service Expanding digital options for all taxpayers further strengthening Data Security supporting vulnerable populations by protecting them from scams increasing access to earned incomecc tax credit and other refundable credits. Ongoing success hinges on sustained investments to make sure we have the right size workforce with the right training and tools as well as modern Technology Infrastructure with increasingly modern tools for taxpayers. Serve the nation today and in the future helping us is the fiscal year 2025 Budget Proposal. It gives us the flexibility fley increases irs transfer authority. So they can be used efficiently and effectively. Also help sustain a new irs a baseline of resources and immediate funding that would dramatically degrade our ability in many areas taxpayer saw this tax season. 2025 funding is necessary for us to build on our success this Filing Season and continue our work. Make for their fellow Service Improvements provide Digital Tools to help taxpayers pay for the irs to beta able to do all f these things adequate annual discretionary funding and complementary longterm when you probably think taxpayers this is a critical component that citizens do support our great nation. Please know all of us at the irs deeply appreciate and respect the time and care taxpayers take to did this vital civic duty. Irs employees remain committed to helping taxpayers in any way that we can. Chairman, Ranking Member and members ofvi the committee, that concludes my statements. Illlp be happy to take your questions. Commissioner, thank you. We very muchh appreciate you u,being here. You havein experience in both te public and the private sector. And it seems to me launching Something Like direct file is a little bit like starting a startup company. Tellli us, from a business perspective how has this project launch gone . It is going very well. I think of it as a product launch. We are putting a new product on the street if you will. Ctour customers, in this case taxpayers and if they think they would like to do the product in the future. We had the idea for the product to be put on the street with volunteers. We tested it. From about generally 29th until march 8 direct file product was testing with volunteer taxpayers who agree to submit. Very positive reviews but also able to make realtime fixes to the product based on Taxpayer Experience appeared on march 8 we were ready to go. That is omitted publicly available to the millions of taxpayers in 19 states were eligible thiss year. People tell us its easy to use. It is simple. Of course they like the price tag it is free. In the final days of the Filing Season was extraordinary increase in the pace of taxpayers violate with direct file per edit all and very smoothly. What the massive fraud we are seeing in the Employee Retention tax credit program. As we all know this was a really help for people during the pandemic. But it was a blow or it told me not to long ago, there is now an avalanche of fraud. Something like 95 of the claims now being made are fraudulent, choking the irs systems and delaying valid refunds. The introduce with jason smith in the house the cut off that claims after generate 31, 2024 give the agencys new enforcement tool. My question to you is if this sentence on this bipartisan agreement seems to me fraudulent claims will continue to clog the system. They will cost taxpayers billions of dollars divert resources with lawabiding taxpayers, your thoughts . I absolutely agree mr. Chairman. We issued a moratorium on september 14, 2023. Because over the summer 2023 increasing number of questionable claims coming in. And we were worried. Not just about the financial bottom line of the u. S. Government. We were worried about honest all businesses that we sell are being taken advantage of by aggressive marketers and promoters. Convincing these Small Businesses they were eligible for a credit there were not truly eligible for but they said you get this at no risk to you and that was not true is also false advertising. We got to take steps to stop the flow. We did slow it but even today at mr. Chairman we are still getting 20000 new claims every week. Even when we announced in september that we stopped processing. This is because the law through 2025 these promoters are out pushing for these claims to be filed. I really do appreciate legislation you are sponsoring with chairman smith and the house that would give us the tools are there two things being harmed at that bill does not pass. One, financial bottom line of the u. S. Government because you are giving us tools to crack down on fraud. And two, in our big inventory of claims there are still eligible claims in the midst. Theyre very hard to find. Its like finding a needle in the haystack. With youre help we can get those eligible claims found and issued. And hold back from issuing the ineligible claims. I talk to chairman smith late last night. He wanted me too say we are pulling out all of the stops to get the legislation passed. If i were to go through all the groups, conservative groups and other groups or for this administration we would still have your tomorrow morning at breakfast. Im not going to do that. We are pulling out all the stops to get this passed. Last question was asked for the ira funding and Customer Service. This Filing Season and seems to be a major success the cut call wait times to three minutes but expanded customer call back service. Open to reopen 54 sites for inperson service. There is new Digital Tools you cascan millions of paper filed returns for that ought to speed up some refunds. Commissioner, howell taxpayer noticed ira funding is improved service this year . Thats a. Nba, so we get this star what will they visit the fundi

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