Transcripts For CSPAN3 IRS Commissioner Charles Rettig Testi

CSPAN3 IRS Commissioner Charles Rettig Testifies Before House Ways Means... July 11, 2024

Audio real quick . Hell of a time getting in here today. You sound great and you look great. Thanks, i needed that. Gavel again. Okay. Good morning, welcome. I call to order subcommittee on oversight. I want to thank everybody for joining us today. Were holding this hybrid hearing in compliance with House Resolution 965. Accordingly i am joined by members here in the hearing room as well as approximately ten members on the remote platform. Thats outstanding, and i want to thank them for joining us. Before we turn to todays important topic i want to remind the members of a few procedures to help us navigate the terrain here. First, consistent with regulations the committee will keep microphones muted. For those participating virtually to limit background noise. Pause for one moment. So we will pause for one moment. Members are responsible for unmuting themselves, unmuting themselves when they seek recognition or when recognized for their five minutes. Members here in the hearing room also are reminded to keep your microphones muted when you are not recognized. Second, for the members participating virtually, you must have your cameras on at all times. If you need to step away from the proceeding, please leave your camera on rather than logging out. Third, we will dispense with our practice of observing the gibbons rule and instead go in order of seniority for questioning. Alternating between minority and majority, beginning with members of the oversight subcommittee, of course. I thank you all for your we are troubleshooting a quick technical issue, trying to get the streaming from 1100 to show up. It will just be another minute, so youre aware the audio is streaming on youtube already. So the video will be going live as well. Once we get this on. I thank you all for your continued patience as we navigate these new procedures in order to continue serving our country together in this great time of need and with that i will now turn to the important topic of todays hearing. A conversation with the commissioner on the Internal Revenue service. Thats why were here. So good morning. I welcome my colleagues and our only witness. Today the commissioner of the Internal Revenue service, mr. Charles rettig, will join us and i appreciate that personally and professionally. Mr. Rettig, this committee has waited a long time for you to join us, and for we already looking anxiously, waiting anxiously. Nearly two years. It is astonishing this is the first time youre appearing before the chief Tax Writing Committee in the house. I mean, put yourself in our shoes, were trying to do our job, youre trying to do your job, and we have very little communication. With a brand new administration on the horizon this may be your first or your last appearance before us. Im not suggesting either. But the point of the matter is, were glad youre here. Im disappointed you refused to join us for our important hearing on taxpayer fairness a few weeks ago, historically the United States has had an excellent record of compliance with our tax laws. Americans dutifully pay their taxes, assuming the system is fair for all. Whether youre rich as rockefeller or just a regular joe, because of that our voluntary system, tax system has been a model for the world, it really is, at least until recently. Our hearing demonstrated how our system of voluntary compliance has come under assault by the president and members of his government for five years the president refused to disclose his tax returns. The president broke with the history of every president since president nixon. In so doing he sabotaged public faith in our tax system. You have aided and abetted him. As is your job, i guess. Since 2017 ive led congresss efforts to request mr. Trumps business and personal tax returns. Not because im a snoop. Im far from it, just the opposite. The law is clear though. Under 26 United States code section 6103 f our committee is legally and absolutely entitled, our committee is legally and absolutely entitled to review anyone within the executive branch of government the law is very clear. And for 591 days you and secretary mnuchin have broken the law to keep that hidden. I dont know what were hiding, but we have not known. We have not found out yet. It is our responsibility to restore the Publics Trust in our tax system. The president s business and personal returns must be audited impartially. And without political interference. Yet, every time we ask a question were reminded its still being audited, since 2016, before 2016. So we have some questions. The American People have a right to know whether thats whats going on. Time is of the essence. Just last month the New York Times reported that selfpro claimed billionaire, mr. Trump, paid only 750 in taxes in 2017 and 2018. 750. And in ten of the last 15 years he reportedly paid no taxes. When you listen to the explanation of why that happened, having nothing to do with you, but when you listen to it you have to wonder, is this reading out of a cartoon magazine, or is this really happening . Is this a fantasy or reality . The teachers and firefighters, police officers, the people collect our garbage in our districts are paying a heck of a lot more. The taxpayer fairness issue manifests itself in many other ways. Mr. Commissioner. We hear over and over from our constituents who have failed to receive their Economic Impact payments, im very angry over that, and im sure you are too. Time and time again, on time even at all. I look forward to discussing how the irs is rectifying these dire situations. No one whos eligible should have to wait for their check, especially during a pandemic. We are hearing similar complaints about 2019 refunds. Our constituents have waited for months to get their refunds and their records straight. I have a constituent who was told not to expect the response from the irs on her 2019 return until january. January . I want to know if that is acceptable to you. I hope you will bring us up to date on your efforts to get through the backlog in returns and collecting dust at irs. Mr. Commissioner, well be following up on my question at the oversight and Government Reform Committee hearing. Are you not ordered in wealthy taxpayers and corporations more extensively than low income americans . Let me now yield to my good friend, gentle lady from indiana. Thank you for holding this hearing. Mglad youre here. Im thrilled to be here, and i thank you commissioner rettig for being here and with the irs. I want to thank the men and women that have worked hard to keep the agency rupp up and running to provide services to our fellow taxpayers. The cares act required that the irs take on a number of tasks but none greater than sending Economic Impact payments to more than 160 million americans, a huge undertaking and we should acknowledge that the irs got most of those payments out the door in just a matter of weeks, so we thank you for that, commissioner. With that said, i think you would acknowledge that the irs still faces a number of challenging things Going Forward, and i have concerns about how the agency plans to meet those challenges. There are just a few main issues i think the agency needs to address. I hope youll be able to provide the committee with some answers on how the agency plans to do so. First, im concerned about the current backlog of mail and unprocessed returns that has built up since the initial lockdown in march and april. My understanding is that the irs has millions of pieces of unopened mail and an even greater number of unprocessed tax returns. That means millions of taxpayers are still waiting on refunds for tax returns they filed as far back as march and april. Second, given that this mail backlog may not be resolved until well into 2021 im concerned about the agencys ability to prepare for what is likely to be another major difficult Filing Season. Third, on the eip payments, ill say that the number of payments you sent out and how quickly you did so was incredible but i have heard from a lot of our constituents that and i know my colleague haves as well, about the situations where folks are still eligible for eips but still have not received anything. So i would appreciate hearing more about what the irs has done and will do to make sure everyone who is eligible for an eip receives their payment. And then, i also want to acknowledge that the irs this week released guidance on the Paycheck Protection Program related to the tax treatment of expenses paid with a ppp loan that has not been forgiven. Many Small Businesses are struggling to stay afloat right now all over this country. Many we need to pull together to ensure these Small Businesses have relief, especially those forced to close their doors due to state and local covid restrictions. Id also like an update on the implementation of the bipartisan Taxpayer First act. As you know we enacted this important law last year as a result of a bipartisan work on this committee. This historic overhaul of the irs requires implementation work on the part of the agency and id appreciate an update on your progress and what challenges youre facing. I want to make sure we dont let our response to the pandemic hinder the longterm work that still needs to be done to improve and modernize the irs. With that i thank the commissioner for his testimony and i yield back, mr. Chairman. We will dismiss mr. Kelly. Well next hear from our only witness, and that is commissioner rettig, and i thank him again for appearing before us today. Your Opening Statement will be made part of the record in its entirety. I ask that you summarize your testimony, five minutes or less, to help you with that time please keep an eye on the clock. And the lights in front of you. If you do go over your time i will notify at the tap of my gavel but were here to listen to you. Commissioner, you may begin. Thank you, chairman pass carell, Ranking Member and the rest of the members who are here. I appreciate the opportunity to discuss irs operations and our efforts to help taxpayers during the covid19 situation. Initially, mr. Chairman, respectfully i would like to indicate that i disagree and take exception to the terminology aided and abetted. But i cannot speak to any matters associated with that since those matters are in litigation as well as those matters involved specific taxpayer information which im not able to discuss. But i respectfully wanted to make the record on that for you, sir. Now, more than two years into my term as commissioner of the irs i remain extremely proud to be working with the irs and the exceptional employees of the Internal Revenue service knowing that 96 of the gross receipts of our country flow through the irs that has strengthened my belief that a healthy, functional irs is critical to the overall success and wellbeing of our country. The importance of the irs to every american has become especially apparent since this spring has our nation has faced unprecedented challenges, the irs has been at the forefront of successfully providing rampant Economic Relief to taxpayers during covid19. The irs response serves to illustrate how critical it is for the agency to receive consistent, timely and adequate multiyear funding such that we can succeed in providing the services that our country and our citizens so rightly deserve. Irs employees have worked since midmarch to implement major provisions of the cares act, especially the Economic Impact payments which have helped millions of americans during these challenging times. So far, approximately 160 million Economic Impact payments have been issued, totaling about 270 billion. Many of these payments recognize more than two people in a family. Delivering the Economic Impact payments, the Internal Revenue Service Employees balanced the statutory requirement to deliver these payments, quote, as rapidly as possible, as dictated by the cares act, with a need for accuracy and a concern about potential fraud. The irs correctly computed the amount of the payments of the first 157 million payments according to our Inspector General 98 of the time. I think thats miraculous and its a tribute to the strength of our employees and the dedication of our employees. However, we readily acknowledge that there is more to do, although the strength of our employee our agency is the employees the interaction of our employees in the communities in which they reside is equally important. During this period of time our employees have been out in involved in and engaged with community or local Community Organizations trying to generate Economic Impact payments for people who are needy and were essentially and to the point of interacting with the unsheltered communities. We have interacted directly with more than 4,000 homeless shelters, numerous different organizations around the country, all as more specifically set forth in my more lengthy written testimony. Tomorrow is the deadline for registration of the Economic Impact payments on our nonfilers portal, and i would like to encourage people to who have not yet provided information through the nonfilers portal to do so. During the pandemic, within a matter of days, we initiated the people first initiative, which postponed the deadline for filing to july 15, the latest time in the history of our country, we also temporarily adjusted numerous processes to help people and businesses during these uncertain times. As we will discuss, we have also delivered a historic Filing Season 2020, not only in terms of the volume of tax returns that have been processed, refunds that have been processed, but also in terms of the number of tax returns processed per minute and per second. We have importantly, and one of the matters that im probably as proud as anything else, and we have a lot to be proud of, and i do want to extend the opportunity to meet with each of you individually, collectively, at your leisure, when you ask, we will be there, but importantly for the first time in the history of the Internal Revenue service we will be delivering the form 1040 this year in both english and spanish. Taxpayers will have the opportunity to check a box to indicate the language they wish us to interact with them. Taxpayers who call on our phone lines will have the option to receive Translation Services in more than 350 languages. So when i got on board these numbers were about between six and nine and this all came together by the i opened the doors for our employees, but our employees proudly walked through these doors to provide services in the underserved communities of our country. Our phased in reopening was couched in terms of trying to maintain the health and safety of our employees, balancing that with our responsibilities to this country, which we take seriously, and, sir, before i turn it back over to you, i would be remiss if i didnt call attention to somebody whos been by my side since i came on board two years ago, who has been at every hearing that ive testified in the house as well as the senate. And respectfully is more than my right hand, the person i look up to more than probably anybody else in the Internal Revenue service who is not only a sounding board, but is sitting right behind me, diane grant, on december 1 of this year, we are celebrating her 50th anniversary with the Internal Revenue service, and i do appreciate, sir, your acknowledgment of her. Shes an amazing individual. So now that ive embarrassed her, sir, i will turn it back to the committee. Im glad, commissioner, to hear somebody in the administration Say Something nice about our employees. And you have. Sir, i came on board for the employees, taxpayers and you guys. Thank you for bringing that to our attention and congratulations, ms. Grant. I will open the hearing for questions. Without objection each member will be recognized and were joined by my good friend, mr. Kelly from pennsylvania, he walked all the way from pennsylvania to get here this morning. Each member will be recognized for five minutes to question our witness. If the witness will respond with short and concise answers, if the congressmen will ask questions short and concise, thats unusual, but well try. All members should be able to ask questions. As mentioned earlier we will not observe the gibbons rule. We will instead go in ord of seniority for questioning. Alternating between minority and majority, beginning with the members of the oversight subcommittee. Members attending remotely are reminded to unmute yourselves when you are recognized for your five minutes. And ill begin by recognizing myself for questions, mr. Commissioner. Mr. Rettig, when President Trump took Office Former Congress Former commissioner koskanen volunteered to resign before his term ended. You stated this week that you plan to finish your term. That term ends in 2022, if im not mistaken. Do you agree that you serve at the pleasure of the president , yes or no . Yes. If mr. Rettig says yes, then i want to thank the commissioner and im glad we agree. Will you prooffer your resignation to president elect biden, yes or no . No. If rettig well, youre saying no to that particular question, right . Correct. Im asking you, mr. Commissioner, to prooffer your resignation to the incoming president to facilitate the transition to the new administration. And i will recommend that it be accepted. Mr. Commissioner, under a new administration, if you are asked to provide soon to be former President Trumps tax returns to the committee, will you compl

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