Congress seriously considered reforms to the irs. Im hopeful that we embark on a new effort to improve the agency that can work hand in hand with members on both sides of the aisle. Working together im confident we can find Common Ground and make progress. I think its important to emfa soois size that our effort to reform the irs should not be seen as a punishment or criticism of the average agency or employee. Instead, they were recognized that the irs mission is very important. Every Government Entity just whether its private companies can benefit from a thorough review and some thoughtful longterm planning and action and thats what we are here today for. I have a business background, i started my own businesses many years ago, and my experience tells me that we always need to look for ways to improve, Continuous Improvement has been part of my philosophy over a lot of years. We always find a way to get better and more efficient. When evaluating any entity government bis always ask myself the reason for improving, but the big goal is to have Continuous Improvement i think as your organization has over the years. The task before us today has asked the tough questions and look for solutions. This work is important because taxpayers need to be able to trust the entity administering the tax code. 98 of our tax revenues come to the irs voluntarily, only 2 is collected through the irs enforcement action. Trust is a key component of voluntary compliance. The taxpayer bill of rights contains the right to Quality Service and i think thats one of our biggest focus. As second on the list, an irs publication describes the right is the right to receive prompt, kurt yes, sir taxpayer assistance in dealing with the ir is the as we consider forms tots irs we should keep this right as well as well as the other nine in line. I look order in to working with the Ranking Member mr. Lewis and other members of the committees to make the irs a 21st century agency. I want to thank ms. Olson for being here today. Shes been a champion for taxpayers for many years and her insight on this topic will be valuable. I look forward to her testimony. I know yield to the distinguished Ranking Member mr. Lewis for the purposes of an opening statement. Good morning, mr. Chairman. I thank you very much for holding this hearing with the National Taxpayer advocate. And i want to thank ms. Olson for being here and for her many years of service. I would also like to thank our members for being here. I know for some of us this is a little early. I agree. But were here. Mr. Chairman, we must approach the important matter of reforming and improving the Internal Revenue service with a great deal of care. We must remain focused on doing what is right and what is just for the interests of every american taxpayer. We stay on a bipartisan path together, we help the irs become a model of success for constituent services. The irs is a large and complex organization that has suffered from a lack ref srss for many years. Congress cut the agencys budget by almost 1 billion since 2010. These cuts hurt and harmed Taxpayer Services and Tax Compliance. And the irs need technology, infrastructure, and employees to provide secure, Quality Customer service. For these reasons, responsible reform must include strong, robust funding. As we study the irs structure and service, we must also consider how much the world has changed since Congress Last acted on this matter. Over the last 20 years, small farms and Internet Access create opportunities for some and various for others. Both taxpayers and those who serve them struggle with increased Identity Theft, fraud, and scams. Unfortunately, Certain Program like private Debt Collection, which has been tried and repeatedly failed, just tloend more confiegs. Mr. Chairman, i believe that we agree on the importance of an agency that will provide taxpayer with greater access to Customer Service online, over the phone, and in person. I believe we can help build a Tax Administration system that would take advantage of new technology while enhancing the security of taxpayer data. I believe that we must do better and if we work together, we can do better. I look forward to hearing from the National Taxpayer advocate today and learning more from her experience with taxpayers and the agency. And, again, thank you mr. Chairman for holding this hearing today and thank you for your service. Thank you, mr. Lewis, and i look forward to working with you on the irs reforms. Without objections other members Opening Statements will be made part of the record. Todays Witness Panel includes one witness, nina olson for Taxpayer Advocate services at the irs. I did mention to her earlier i met way group of cpas from florida and your organization was well thought of and also last week preparers that are here in washington, i asked them about your organization and they gave you high marks. I dont want to you get a big head, but the point is, we do believe in Continuous Improvement. Ms. Olson, we appreciate you being here today. The subcommittee will receive your written statement which will be made part of the formal hearing record. You know have five minutes to zlifr your oral remarks. You may begin when youre ready. Thank you. Chairman buchanan, Ranking Member lewis and members of the subcommittee, thank you for inviting me to testify today regarding the operations of the Internal Revenue service and to offer some suggestions to improve the responsiveness of the agency to u. S. Taxpayers. Its been nearly two decades since Congress Last reviewed and updated the laws governing irs operations. A lot ha changed during that time and Tax Administration would benefit from a fresh review of those laws. In my written statement, i make the following points. First, reforms to irs operations will be most successful if congress consults widely on its proposals, engauges irs employees and external stakeholders and provides the irs with Adequate Funding to succeed. Second, sound Tax Administration should be predicated on foundational principles and the most important principle is respect for taxpayer rights. Not only is respecting the rights of the taxpayers who pay our nations bills the right thing do, but theres significant Empirical Data that suggests Building Trust with taxpayers which requires respecting their rights enhances voluntary compliance as well. In 2015, congress codified the provisi provisions of the taxpayer bill of rights as part of a commission providing that the irs ensure irs employees receive training and act in accord with those rights. The challenge now is to ensure that it is not merely aspirational but it incorporated into the very eej thoesz thoes of the irs and explicitly into its business practices. I believe a clear statement that taxpayers ally have the ten fundamental tbor rights would provide a Stronger Foundation for effective Tax Administration and therefore i recommend that Congress Enact the taxpayer bill of rights as a freestanding provision in the Internal Revenue code. Third, to become an effective 21st century Tax Administration, the irs must place greater emphasis on Taxpayer Service. In my view, theres no conflict whatsoever between providing highquality Taxpayer Service and taking actions to ensure Tax Compliance, particularly on the part of persons actively seeking to evade tax. It should not be an either or proposition. But to create an environment that encourages taxpayer trust and confidence, the irs must change its culture from one that is enforcement oriented to one that is Service Oriented of the current appropriate eighted budget, 43 is allocated to enforcement while only 4 , i repeat, only 4 is allocated to taxpayer outreach and education activities. According to irs data, the agency dedicates only 98 employees to conduct outreach and education to the roughly 62 million Small Business and selfemployed taxpayers, and only 376 employees to conduct outreach and education to the 125 million wage and investment taxpayers. Meanwhile, the irs has over 3,000 revenue officers who collect Field Collection activity and over 888 agents who conduct field audits. In ra 98, congress directed it to serve greater emphasis on serving the public and meeting taxpayer needs. It adopted the the following Mission Statement. Provide americas taxpayers top Quality Service by helping them understand and meet their tox responsibilities and by applying the tax law with integrity and fairness to all. In 2009, with no public discussion or notice to congress or to myself, the irs quietly changed its Mission Statement to read, and enforce the tax law with integrity and fairness to all. This smift in tone and emphasis from applying to enforcing the law suggests irs leadership disagreed way congressional directive and decided to place greater imfa sis on enforcement in the Mission Statement. Accordingly, i recommend that congress, i the irs to revise its Mission Statement to reemphasize a noncoercive approach to Tax Administration and explicitly affirm the role of taxpayer rights in the guide as a guiding principle for Tax Administration. Fourth, congress has passed three important taxpayer rights build including ra 98 and in my testimony i highlight provision dollars that irs has that congress has enacted that the rirks irs has not implemented, defined a way through guidance or only done a partial job. Fifth, ra 98 joint oversight hearings would give Congress Better insight into the strategic and operational plans, promote dialogue between congress, irs and interested stakeholders, and help ensure the tax rating and rowe appropriations committees, coordinate their operations. Thank you for this tantd look forward to answering any questions. Thank you very much. At this time well now proceed to the questions and answer section. I think were going to have to limit the questioning to four minutes instead of five because we have a briefing at 10 00 so id ask all the members to adhere to that. As is my custom, i will hold my question till the end. I know recognize the gentleman from arizona mr. Schweikert for any question he may have. This is unique for a couple of us because were so used to have witness from the irs where we have a series of dodgy stories and things that are frustrating and whn weve reached out to arizona, we had people say nice things about the organization. So a little concern on speed, but actually said nice things. So you win a prize for having a unique conversation with us today. I can start with one thing that did come up in the conversations we had in arizona about this hearing that was coming up, and that was outreach to our office and then also to your office of individuals who are called in the gig economy. The uber driver, the person who crowdsources their work through the internet and the discussion of how they access information saying, hey, heres the rules for me to, say, for my retirement, heres my rules on what must be set aside. First, as the advocate, do you believe your organizations doing enough to make it toes access that information, the way you post it up on your website, the way you deliver that information and then the same thing for as you observe how the irs differs that information to those folks in that part of our economy . Well, im very concerned about this population as its growing its a very fastgrowing part of it. And im concerned theyll get into trouble with selfemployment tax, not save retirement, et cetera. One thing that my office is working on right now that we receive suggestions about from other sectors is to develop a wizard where people who are starting in the gig economy can actually go on to our taxpayer toolkit online and see all the steps that they need to do and get an employer identification number, understand about calculating selfemployment tax and when they need to make it, get to the place where they can calculate or learn about the different forms of retirement saving, et cetera, and then most importantly if they have problems, how they can resolve them including getting to the Taxpayer Advocate service. Thats something were developing right now. And i know that may be slightly different than as you may have viewed your charter as the advocate, but sometimes the advocate may be proactive. And this is something we all as Committee Members are going to have to deal with right now is that associated Mother Organization if they were to give advice. And you know you can save for your retirement, they may have just set them off as becoming an employee and no longer being an independent contractor. And were going to have to sort of figure out, you know, what are we going to do to help this population be able to have that future. Now, on the irs side, do we see the agency itself doing enough . Is the public access, because you cant get it from, you know, the organization youre contracted with, where does that person go right now to get that information . So the irs did create a web page last year to address some of the issues for the gig economy. I think you and i think has always we can all do more. This goes back to the fact that there are only 98 employees conducting outreach and education to the selfemployed population in the United States and there are 12 states 14 states that zo not have one of those employees located in them. And i know were in our last 30 seconds. I have a fixation that the use of technology as a way to direct folks who are having difficulties with the irs, do you actually as the advocate almost publish saying this is a problem that comes to us quite often, heres how its been resolved. Right. Heres the form you need, what are you doing proactive in that part of the world . Well, we identify the needs of the gig economy as the most serious problem in my annual report to congress and we made recommendations and we have also created materials for my local Taxpayer Advocates in each state to actually conduct outreach proactively to groups. And thats one of their assign mebts, to identify stakeholders in their communities. Thank you, mr. Chairman. Yield back. I now recognize the distinguished Ranking Member mr. Lewis for any questions he might have. Thank you, mr. Chairman. Ms. Olson, its my understanding that you held a dozen Public Meetings around the country. What do you learn . You know, it was remarkable. We lernld a number of things. One was how hard people are trying to communicate with the irs and how much they actually want to. We learned that people thought that having digital, online tools would be very, very helpful but they were no replacement for talking to the irs. And that there was a very strong desire for the irs to hear from them and listen to them. We learned that from all sorts of different populations a concern about Identity Theft and the scams that are going on out there, those were very strong issues. We learned about issues about Payroll Service providers ripping off taxpayers who are securing their services. And then we heard from experts about how best to design Digital Services to make them useable by people but not replace the communication, the persontoperson communication with us on the phone, or in person. And that was a very strong message. I know as the Taxpayer Advocate you dont believe that Quality Service can be provided on the cheap . I Taxpayer Service is, to me, the key way that you build trust with taxpayers. And you can do Taxpayer Service whether youre trying to do outreach and education or within an audit or within collection activities. If you take that approach that youre trying to bring the taxpayer into voluntary compliance and understand why theyre having compliance difficulties and youre listening to the taxpayer, then that is how you bring Taxpayer Service and taxpayer rights into what i call the ethos. Providing Taxpayer Service doesnt eliminate a single one of those powers that the irs has when they need to use them. Do you think in 1998 reform act was successful . I think the 1998 reform was very succes