Subcommittee on oversight. Were holding this hybrid hearing in compliance with House Resolution 965. Accordingly, im 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. The committee will pause. 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 in the hearing room are reminded to keep your microphones muted when youre not recognized. Second, for the members participating virtually, you must have your cameras on at all time. 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 go in order of seniority for questioning alternating between majority and minority. I thank you all for troubleshooting a quick technical issue. Trying to get the streaming from 1100 to show. The audio is streaming on youtube already. The video will be going live as well. Once we get the chairman on. I thank you all for your continued patience as we navigate these new procedures. I will turn to the important topic of todays hearing, a conversation with the commissioner of the Internal Revenue service. Thats why were here. Good morning. I welcome my colleagues and our only witness. Today, the commissioner of the Internal Revenue service 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 were looking anxiously awaiting anxiously, nearly two years. It is astonishing, this is the first time youre appears before the chief Tax Writing Committee in the house. Were trying to do our job. Youre trying to do your job. And we have very little communication. With the brandnew administration on the horizon, this may be your first or your last appearance before us. Im not suggesting either. The point of the matter is, were glad youre here. Im disappointed you refused to join us for an important hearing on taxpayer fairness a few weeks ago. The United States has had an excellent record of compliance with our tax laws. Americans dutifully paid their taxes, assuming the system is fair for all. Whether youre as rich as rockefeller or a regular joe, because of that, our volunteary tax system has been a model for the world. 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 a 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 6103f, 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 selfproclaimed billionaire mr. Trump paid only 750 in taxes in 2017 and 2018. 750. In 10 of the last 15 years, he reportedly paid no taxes. When you listen to the explanation on 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 a realty . 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, i look forward to discussing how the irs is rectifying these dire situations. No one who is 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 respect a 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 auditing wealthy taxpayers and corporations more extensively than lowincome americans . Let me now yield to my good friend, the gentle lady from indiana. Thank you for holding were honored that youre here. Thank you, mr. Chairman. You have five minutes. Im thrilled to be here. I would like to thank you, commissioner, for being here and for your hard work and leadership at the irs during an incredibly challenging time. I also want to thank the dedicated men and women of the irs around the country who have worked so hard during the pandemic to keep the agency up and running, to provide services to our fellow american taxpayers. Congress has asked the irs to go above and beyond this year in response to the coronavirus crisis. The c. A. R. E. S. Act required that the irs take on a number of tasks. But none was greater than finding a way to send the Economic Impact payments to more than 160 million americans. That was 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 some answers on how the agency plans to do so. 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 even a greater number of unprocessed tax returns. Millions of taxpayers are waiting on refunds for tax refunds they filed as far back as march and april. Given this come back log may not be resolved into 2021, im concerned about the agencies ability to prepare for what is likely to be another major difficult Filing Season. Third, on economic on the eip payments, ill say that the number of payments you sent out and how quickly you do so was incredible. But i have heard from a lot of our constituents that and i know my colleagues have as well, about the situations where folks are still eligible but have not received anything. 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. 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. I would 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 i would 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 modernize the irs. I thank the commissioner for his testimony and i yield back, mr. Chairman. I want to thank you we will dismisses mr. Kelly. Well next hear from our only witness, that is commissioner retti girk rettig. 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 yo do go over your time, i will tap my gavel. But were here to listen to you. Commissioner, you may begin. Thank you, chairman, 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 abetted. I cannot exception since those matters are in litigation as well as those matters involve specific taxpayer information which i am 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 i remain extremely proud to be working with the irs and the employees of the Internal Revenue service. Knowing that 96 of the gross receipts of the fucountry flow through the irs that a 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 the spring as our nation has faced unprecedented challenges. The irs has been at the forefront of successfully providing rapid, Economic Relief to taxpayers during covid19. The irs responds 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 payment which is have helped millions of americans during these challenging times. So far approximately 160 million Economic Impact patients have been issued totaling 270 billion. Many of these payments recognize more than two people in a family. Delivering the Economic Impact payments the Internal RevenueService Employees balanced the statutory requirement to deliver these payments, quote, as rapidly as possible as dictated b by the cares act with the need for accuracy and concern for the need for potential fraud. The irs correctly computed the amount of the payments of the first 157 million payments according to our Inspector General 97 of the time. I think thats miraculous and thats 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 agency is the employees, the interaction of our employees and the communities in which they reside is equally important. During this period of time our employees have been out and involved in and engaged with local community organizations, trying to generate Economic Impact payments for people who are needy and were essentially into the point of interacting with the unsheltered communities. We have interacted directly with more than 4,000 homeless shelters, numerous different organizations around the count rye, all as more specifically set forth in my more lengthy, written testimony. Tomorrow is the deadline for the registration of the Economic Impact payments on the nonfilers portal and i would like to encourage people who have not yet provided information through the 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 15th. The latest time in the history of the country and we temporarily adjusted numerous processes to help people in 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 the tax returns that have been processed and refunds that have been processed and also in terms of the number of tax returns processed per minute and per second. We have importantly and one of the matters this im as proud of as anything else and we have a lot to be proud of and i do want to extend the opportunity to meet with you 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 onboard, these numbers were between 6 00 and 9 00 and this all came together by the i opened the doors for our employees, proudly walked through these doors to provide services in the underserved communities of our country, our phased in reopening was in terms of trying to maintain the health and safety of our employees and balancing that with our responsibilities to this country which we take seriously and before i turn it back over to you, i would be remiss if i didnt call attention to somebody who has been by my side since i came onboard two years ago who has been at every hearing that ive testified in the house as well as the senate and respectfully is per than my right hand, a person that i look up to probably than anybody else in the Internal Revenue service who is want only a sounding board, but is sitting right behind me. Dianne grant, on december 1 of this year, we are celebrating her 50th anniversary with the Internal Revenue service, and i do appreciate, sir, your acknowledgement of her. Shes an amazing individual. So now that ive embarrassed her, sir, i will turn it back to the committee. I am glad, commissioner, to hear someone in our administration saying something nice about our employees. Sir, i came on for the employees, taxpayers and you guys. Thank you for bringing that to our attention and congratulations, miss grant. I will open the hearing for questions, without objection, each member will be recognized and we are joined by my good friend, mr. Kelly from pennsylvania. He walked all of the way from pennsylvania to get here this morning. Each member will be recognized for five minutes to question a witness. If the witness will respond with short and concise answers, and if the congressman 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 rule and we will go into the order of seniority for questioning, alternating between minority and majority and with the oversight committee. Members attending remotely are reminded to unmute yourselves when you are recognized for your five minutes and i will begin by recognizing myself for questions, mr. Commissioner. Mr. Redick when President Trump took Office Former commissioner coskonin, 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. Redick says yes, i want to thank the commissioner. Im glad we agree. Will you offer your resignation to president elect biden . Yes or no . No. If redick you are saying no to that particular question, right . Im asking you, mr. Commissioner, to put off your resing nation to the incoming president to facilitate the transition to the new administration and i would recommend that it be accepted. Mr. Commissioner, under a new administration, if you are asked to provide soontobe former President Trumps tax returns to the committee, will you comply . As you are aware i cannot discuss issues pertaining to the tax returns since they are involved in the litigation. So you are not answering that question. I cant. I am not asking you anything but will you provide if you asked. Im not going to speculate and i cannot address the question. I cannot answer the question, sir. Mr. Commissioner, Internal Revenue code 6103f. You are familiar with that by now, correct . Correct. Gives the committee clear and unambiguous authority to obtain anyones tax returns. In fact, the irs has never before denied the Committee Access to any tax returns requested under this particular authority. Mr. Commissioner, with the current backlogs, the