Chair pascrell good morning and welcome to everybody. I want to call order good morning and welcome to everybody. I want to call order the subcommittee on oversight and thank you for all the work you guys and gals have been doing on the committee on both sides of the aisle. I think weve struck something there, and getting something doneor at two expert witnesses today. Were holding this hearing in a high form, you know what i think about that i know many of you think about that. We are what we are. [laughs] were holding this hearing in compliance with the regulations for committee proceedings, to House Resolution eight. Before we turn todays important topic i want to remind members of a few procedures to help you navigate this hybrid format. First, consistent with regulations, the committee will keep microphones muted to limit background music and noise. Members joining virtually are responsible for unmuting themselves when they seek recognition or when recognized for their five minutes. Committee staff will mute members only in the event of inadvertent background music. Second, when members are present in the proceeding via webex, they must have their cameras on and if you need to step away to attend another proceeding, please turn your camera and audio off rather than logging out of the platform. Finally, we will dispense with our practice of observing the givens rule and honor of seniority for questioning, alternating between the majority and the minority, beginning with members of the oversight subcommittee, of course. I thank you all for your continued patience as we navigate the procedures to continue serving our country, together in this great time of need. With that i will now turn to the former topic of todays hearing, on taxpayer fairness across the irs. The oversight subcommittee meets today to discuss a very important topic. Taxpayer fairness across the irs, easy to say, weve talked about it for about 15 years. I firmly believe the irs must treat all taxpayers fairly and not only a policy but in the making a phone call to the 800 number, which is a disaster admitted by the irs. This is essential to the irss core missile and to the Taxpayer Experience. Whether the irs is processing returns, answering taxpayer questions, or conducting audits. There cannot be one tax system for the wealthy and another for everyone else. And yet, that is exactly what we have. For years, ive sounded the alarm on our two tier tax system. Since ive been chairman of the subcommittee, the cooperation of the people on the right, and the people on the left, we have held multiple hearings on making our tax system fair. We havent done much in getting things accomplished though. Thats interesting, clearly, our tax code can be fair. I have offered legislation in close, to close the gap in loophole and many loopholes in our laws that have faced resisted by vested interests. And thats not all republicans. My own party, sometimes we cant get out of our own way. So, ive been fair about it. Thats my job. Based on testimony submitted before this subcommittee, and believe me ive read through it twice on this particular subject. Ive also made important suggestions to the treasury and irs on actions they can take themselves to make things fairer and better. I mean, i dont think thats a big task. Apparently it is. We will continue to press the administration on these points. Today, todays hearing, we will highlight administration and enforcement, looking at some of the ways in which millionaires, billionaires have vastly different experiences with the irs than the average american. We have heard reports about return backlogs in the tens of millions, not thousands, millions. We have uncovered erroneous notices being mailed to taxpayers. Thats great, thats wonderful. Weve learned about millions of taxpayer is calling the iris multi received no answer from the agency. You dont have to be lieutenant colombo to see the irs has major problems. These irs failures cannot continue. And to learn more about the irs and how its fixing these issues, weve invited mr. Can corbyn, mr. Corbyn is the irs commissioner for wage and investment in the chief chief taxpayer we got the guy. We brought him here. We thank them for the time hes taken along with his colleagues mr. Ken corbin, how the iris is actively lure Taxpayer Experience. For americans who arent millionaires. There are many reports showing that the iraqis auditing low income families at a much higher rate than high income taxpayers. Thats not what we were told by the director of the irs. And you know what i think about that, i dont talk behind his back. Specifically, data shows that attacks pair with income under 25, 000, get this, is twice as likely to be audited then someone earning between 200 and 500,000 et cetera. I mean if that isnt an outrage, i dont know what is. Even worse if you claim the earned income tax credit. Probably one of the greatest, greatest tools that we have in fighting poverty in the United States of america. The irs is four times more likely to audit you if you are getting earned income tax credits. Why . Because its quicker, its less expensive. The irs seems to see poor americans the same way the harlem gold trotters view the washington generals. The irs goes after people who cant easily defend themselves. You got it, and no use mincing words. You come to the point, you want to change things, theres nothing to hide. I asked the g a o to study, i asked them to study the audit books and the trends today. Today mr. James mctigue, did i pronounce it correctly . Thank you, james. The director of Strategic Issues at the g. A. O. Were we report on g. A. O. s finding. We ask for this, we got it today. As a little movie preview, take a gander at the graph behind me showing nose diving audit rates of the superrich in the last decade. The purpose, and ill say this again, of me being here in the chair, equally, anybody on the committee couldve been the chair. But the reason is very important to understand. Were not here to soak the rich, thats not gonna get us to nirvana. People paying their fair share and how we treat all people that come to the irs with their particular problems is variant portent, not just to me, but to most American People when asked. So, the audit rates are important part of that. I understand the irs justifies its auditing record on a staff limitations. How many times have we heard that since 2008 . I know the irs has a difficult time operating. There are many people in the congress have spent a decade slashing the funding for iran as to sabotage tax enforcement against the rich. And now we have the numbers to prove a. Too many decisions that the irs without looking at what can be done, rather than what should be done. Low income families should not face the consequences of the irs is funding problems while the rich get off scotfree. Elaborate sabotage of the irs, thats what im calling it, has created an agency that cannot process returns, cannot correspond with taxpayers quickly, cannot even answer telephone phone calls for help. This irs is failing to modernize and prepare for the future. And both parties are responsible. These failures are why am now calling on the president , to fire the commissioner appointed by the last president. And then quickly so a replacement now that he only a certain time left as well as another one as well, the last administrations appointment. No way to the end, i will walk up three months earlier than before. You know, you think all the public is blinded to this . They dont know whats going on . If we say it enough times, theyll understand were talking about. They deserve nothing but the truth. I believe in investing the irs, in support additional funding wisely spent, but the irs must do more to improve its operations to eliminate backlogs, to answer more telephone calls, to improve audit selection. These are the absolute basics, and there is no excuse and 2022, when you all fail the basics. Youre not going to the next step. So, i welcome todays witnesses, were lucky to have you both mr. Corbyn and mr. Mctigue. First i want to yield five minutes to the Ranking Member, mr. Rice, i think were still friends. Mr. Rise, you have five minutes for an opening statement. Thank you for being here. Thank you mister chairman, of course were still friends, and thank you to our witnesses for being here today. I want to first take a moment to thank the employees at the irs for their dedication to the agencys mission. At a time of increased complexity brought on by changes in the tax code. The irs undertook an unprecedented effort to organize and distribute hundreds of millions of covid relief payments while suffering the same staffing issues as the rest of the world. Ne of thatall in the midst of te pandemic. And your efforts have been her warnock. None of that has been easy. And i want to say thank you for your hard work and dedicated Public Service now the topic of taxpayer fairness across the irs is imported. Its also one that has been covered by the subcommittee many times. I hope we can move beyond talking points and work on solutions. I believe the most significant unfairness facing the american taxpayers right now is the lack of Customer Service at the irs. The irs is sitting on 13 million on process tax returns and over 26 million tax returns that are waiting, needing further irs action. At the same time, irs phone Service Levels are near alltime lows. Making it nearly impossible to reach an irs agent for help with tax or audit matters. Many taxpayers have been waiting for resolution to their tax filings and to receive long overdue refunds. This is unfair and it needs to be fixed. I know we will hear from at least one of our witnesses about audit rates and the earned income tax credit mister chairman, weve encountered at least for leadership. That have touched on this audit rate issue. And while it is perfectly fine topic, a seventh hearing on this issue doesnt seem designed to make progress toward a solution. The g. A. O. Report indicates what we already know, there are real administrative issues around the earned income tax credit. The program has an annual improper payment rate of around 25 . Its not just the irs thats been telling us this. The states as well. In the last fiscal year, the improper payment amount on the earned income tax credit totaled 19 billion dollars. This is a huge problem, and it necessitates audits. The earned income tax credit is complex when it comes to claiming a qualifying child and producing the necessary documentation to establish eligibility. The problem must be addressed. Id like to see us work on solutions to address the drivers of the high earned tax credit error rate, which is at least partially responsible for auditing a higher percentage of taxpayers claiming this credit. Instead of criticizing the audit rate, lets fix the underlying problem. Another hearing to cover the same talking points weve heard over and over again wont accomplish much. I do wish we couldve worked together in commissioning this report, mister chairman, i like to point out the report leaves out important variables related to the earned income tax credit that would better assist congress in understanding the data. These problems include failure to adequately discuss differences between an earned income tax correspondence audits and traditional in person audits, and whether the even belonged in the same data set. Treating taxpayers claiming a refundable tax credit with a 25 error rate is the same as tax returns from taxpayers that earn their income and reported with a w two with a 99 cent voluntary compliance rate. Failure to include the results of the secretary of 2020 directive to the irs to prioritize increasing audit rates for high income earners. And failure to absolutely, adequately explain, that the irs received one point 86 billion dollars in appropriations on top of its annual budget through covid relief legislation. And the American Rescue plan, bringing its total funding to 2010 levels. With that said, mister chairman, there are real problems with the earned income tax credit administration. And congress can and should play a role in trying to solve these problems. If we Work Together on creative solutions. We need to think creatively have to make credit easier to administer, and bring down rates. To say the irs has room for improvement may be the understatement of the year. From it modernization which would solve a lot of these problems to improve Taxpayers Service to some of the audit rate issues discussed in the g. A. O. Report, both the irs and congress have a role to play improving the situation. I hope we can move forward after this hearing, and Work Together on solutions thank you and i yield back. Chair pascrell i just want to bring attention to were going to lose one of our i want to bring attention to, we are going to lose one of our staff members, and that is important. She is going on to greater things at treasury. She is going to be an assistant over there. And in terms of the Treasury Department, i want to acknowledge isabelle moore. Isabelle, thank you for your work for the last three years. You did a terrific job, we are proud of you, and i know that you are going to take over the Treasury Department when you get there. Hard work on this subcommittee, i think has paid off. We wish you well. In your new position at the Treasury Department, so good luck to you. I want to make sure i didnt forget that. Think you, mister vice. Without objection, all members Opening Statements will be made part of the record. Now, were gonna turn to our witnesses. Why these meetings have been numerous, and weve had different topics, and different subjects. But i wanted to make sure we have exhausted, so that the public understands, and it has taken a long time to get us to understand what we are talking about. And that is why asked for the j. A. , g. A. O. Report. In october the 7th, 2020, i was asked to appear before cherry congolese committee, oversight committee. And i asked commissioner rhetoric about a report that he had stated at that time. And we asked him face to face, im not talking behind his back, the irs orders low income taxpayers disproportionately of wealthy tax cheats because it is easier to pick on regular maracas. And he replied, at the october 7th 2020 meeting, that report is absolutely false. For taxpayers who have more than 10 million in total positive income, the rate is 8 . You noted that. No the earned income tax rate, is 1. 1 . I did not define wealthy tax cheats as the few who have over 10 million. It was after his testimony that the g. A. O. Report was requested, to get the facts. And now we have the facts. So, the testimony from that meeting admitted in a recent report that the irs audits low income tax payers disproportionately over wealthy taxpayers. So now were going to hear the report. Things that i brought to this committee before this report will not have substance in the committees report. And that is why we have asked you gentlemen to be here today. This testimony is devastating compared to what we are going to hear, and everybody on this panel, and everybody here in the audience, and out. There we are going to turn to our witnesses. Our first witness is mr. Can corbyn, the commissioner for wage and investment, and achieve Taxpayer Experience an investigator at the irs. Our next witness is going to be james multi, director of Strategic Issues, at the g. A. O. Your statement will be made part of the record, in its entirety. I would ask that you summarize your testimony in five minutes or less, to help you with that time please keep an eye on the clock obviously. If you go over your time, i will tell you. So mr. Corman, thank you for taking the time to be here today. Take your time, make the breeze and station, and you are on. All right, thank you chairman morale, Ranking Member rice, and members of the subcommittee. Thank you for this opportunity to testify. I been serving as the commissioner of the irss wage and divestment Division Since 2017. Last year i also became the irs s chief Taxpayer Experience officer. Speaking from both perspectives i believe the irs has a responsibility to ensure everyone who interacts with us has both options, and access. They should be able to choose how they interact with us and have access to the information they need. They should be able to accomplish their interactions with that difficulty. This applies to everyone. Individuals, business taxpayers, exempt organizations, tax professionals, and stakeholders in the tax community, and elsewhere. During the Filing Season, and throughout the year, the irs offers systems so that people can file their returns, and receive the refunds quickly needs. This help comes through a variety of channels. Online, over the phone, and person that our Taxpayers Assistance Centers across the country, and another wave of facilitators in person help through over 9000 via and tce sites, including military bases. Due to many factors, the 2020 filing, tax Filing Season has been complex and challenging. To address, we take a number of steps to help taxpayers, including sending out more than two additive in 2 million letters to help people who needed to reconcile their Economic Impact payments, or the advance Child Tax Credit payments. We expanded our Customer Callback Technology to cover 70 of the total free demand, and save taxpayers 1. 7 million hours of whole time we began to use voice and chat bots, but we also understand that part of Service Comes in person. And so we have offered saturday hours at our Taxpayers Assistance Centers, in more than 90 cities across the country. We have made the air and income tax Credit Assistance tool unrest archive, more user friendly. Enhancing the Taxpayer Experience also means improving service to diverse communities. We are committed to helping all taxpayers, including those who have l