>> taking affirmative-action to make taxpayers aware of the other provisions? >> we are. we have worked to get the word out by various news releases and the meetings on the higher act of the jobs credit and we have worked on and making work pay it is hard to get that out. >> you can look at how they take advantage of these provisions i know it is hard to determine but your gut to take? >> nido have any way to say that x percentage could have taken it and x negative why did but we have the at the numbers that has raised on the first-time home buyer in 2009 1.7 million folks took the first time homebuyers.

this year another 100,000 tourists something like that. we have those sorts of numbers to make available to the committee's. >> my time is expired. . . and thank you for holding the committee. many of the restaurants are letting people eat for free today. you can get free coffee and free tax bites at cinnabon -- >> what are we doing here? >> i was going to ask. it's because chairman baucus is trying to get everybody those goodies. my favorite, mr. chairman, was apparently mor tins is giving some kind of discount on some of their restaurants to the cpas. it downed on me maybe the cpas are the one group that gets so much income out of the tax code that they can afford mor tins.

>> that maybe. but the service has delayed the date on which the brokage firms need to file their 1099. i've talked to preparers that said that's put a huge burden on them to get their tax returned processed by april 15th. that might be something we should look into. i'm sorry. >> no, no. fair point. let me ask you about one idea that i've been interested in, ms. olson, the irs already gets a substantial amount of information say on an individual's wages and their interest and their investment income. the value of the mortgage deduction they are getting. one idea that has become popular that i've been interested in is the idea of letting the taxpayer on a voluntary basis, in other words, this is the taxpayers chose, if the taxpayer chose to do so, the taxpayer could ask

the internal revenue service to in effect take the information they already have and in effect send them what amounts to their judgment about what is owed. and the taxpayers could then get it and modify it and file it and do these various things that ensure that it actually reflects what they believe is owed. but it seems to me like an attractive kind of option. and something that could substantially short circuit the more than 6 billion hour that is people go into preparing these returns, $180 billion that's spent preparing these returns. my question to start with is if the irs had enough time for a transition because you obviously can't do this over night. i think chairman baucus is right about some of the hassle, you know, already.

if you had enough time to make a transition, what do you think about the idea of letting the taxpayer voluntarily request something like this? >> well, this is something that we covered in this year's annual report where we looked at how could you get that information available. because we think it would minimize error, certainly be a burden reduction for the taxpayer and it's also key to the -- that the irs had this information before returns are filed as we have more and more programs that are relying on information reporting such as the credit card reporting, some of the health care provisions, the basis reporting. the problem is that the irs right now doesn't start getting the data until sometime in the mid february and we don't really start pulling it together until may. and that's partly a problem in that we've pushed the filing

dates back for the payors to the end of march on some of these things. so what we recommended was that congress require treasury to study what would it take to get the information as quickly in a usable form to run against returns but also make available to taxpayers as they wanted and report back in a year and some of our suggestions has been you push forward the date in which payors have to get us the information, you figure out whether we could get the w-2 information directly, does it need to go to social security first or can we scrub it and clean it up as easily as social security does, and then you might even want to think about right now taxpayers get their w-2s on january 31. you might want to say in this day of electronic filing,

january 15 and get us the information early on. very early on, it could be available to taxpayers. >> it looks to me like there are a fair number of re abuses with the refund anticipation loans. these are the ones where the person gets the short-term cash advance from the preparer end is backed by the refund. how serious of a problem do you think this is? if you think it's a serious problem, what are you doing about it? >> well, i think it's a very serious problem. i know the irs is in discussions with various treasury and banking regulator officials about what they can do. our recommendation has been that you do not give the debt indicator on the refund anticipation loan until you have run the return through all of our fraud checks and eligibility rules. that in itself will slow up the process and increase the risk

for the lenders so much that they will look elsewhere to make their money. that's my approach. >> thank you, mr. chairman. thank you, senator. >> thank you very much, mr. baucus, for having this hearing. this is obviously the right day to be talking about the filing of tax returns and problems that need to be addressed there. today we're also going to introduce the taxpayer build of rights that contains provisions to improve services and put in law some of the protections that we think are important. it supports representation clinics and tax preparation programs such as the one we have in new mexico that's been

extremely successful called tax help new mexico. it advances oversight of paid tax returned preparer which is what ms. olson just responded to senator wyden's question about. enhanced law income taxpayer access to financial institutions and thus a variety of other things. at any rate, i hope we can consider that legislation this year. i know it's difficult to get anything considered this year. but this ought to be some good government legislation that could be acted upon much of the bill many of the provisions in the bill were passed out of this committee in the 108th congress. but were not acted upon by the full senate. i hope very much we can do -- act on them this year. let me ask ms. olson one the issues that you and i spoke about when you were kind enough to come by my office a few weeks

ago was this whole issue of liens and the concern that you've expressed about the irs lien filing policies causing harm to taxpayers without necessarily increasing irs revenue collections in the process. i guess i'd just ask if you could describe the concern you got and the solution you think we should consider. >> well, what we identified was that irs over the last few years has been instituted policies where liens are essentially filed automatically. if the taxpayer meets certain requirements of without really looking at the taxpayer specific facts and circumstances. and we look further into what the effect of that lien filing on the taxpayer? we learned that it caused the taxpayer credit score to plummet 100 points immediately and even when the taxpayer paid off of

the lean or it expired after time it sat on the credit report for years and years and years. even though it might not be enforcible. and that has a huge effect on the taxpayers availability and their ability to pay the future taxes. we did a study that showed the payment that we could track very few payments and dollars came from liens. the vast majority of payments came from collection activity that we needed no lien involved in. so we felt that we were really doing harm to taxpayers rather than having the lien be helpful. >> i think that's a good suggestion. i think if there's a way we can act on that, it would be good. let me ask also on this issue of

return preparer standards. i know that the irs is beginning to move on that issue. and trying to put in place initiatives to require certain competence by preparers and certain seventyifications. mr. miller, could you explain that? perhaps you did in your comments before when i was not here. if you could explain the status of that, it would be helpful. >> certainly. we did a six month study on the issue. we came out with some proposed recommends basically that would require preparers to actually get a preparer identifier so we would know and be able to track through the system what a particular preparer was doing in terms of returns. we're going to require testing

for those other than attorneys and cpas and agents who have other testing. we're going to require that continuing education occur for folks who don't otherwise have a requirement. we hope to get the registration in place for the 2010 filing season. and that's our effort at this point. over the next three years probably we will be testing people in and then we will be fully up and running. >> all right. you're going to exempt attorneys from the testing requirement? what's the -- what's the underlying assumption that justifies doing that? >> the assumption around cpas and attorneys is that there are otherwise bound by some other standards in testing procedures. there are also some limited legal impact that limit us in that regard. >> well, as one attorney who went to law school a long time

ago, i don't know that exempting lawyers who the testing requirements is a vise. i'll defer. thank you, mr. chairman. >> thank you, senator. senator grassley. >> ms. olson, in your 2009 annual report, you report that you issued 16 taxpayers assistance orders. the examples listed in your report seem to indicate that they are good examples of the use of liens and levies. i understand that you may have issued three for just one taxpayer including one to the commissioner to request that a lien be withdrawn. further the taxpayer lawsuit job because the lien impacted his credit rating which was not tolerated. could you describe the details surrounding this case to the extent possible and whether you think it resulted in the best outcome for the government?

>> yes, the taxpayer has given me permission to discuss the facts of his case so the normal confidentiality provisions don't apply. this taxpayer had lost his job -- he had actually had his first employment reduced because he was in a particular industry that did due diligence and found a lien on the books. this taxpayer was working with the irs to pay in full the debt without the lien having been filed. while he was talking over a period of three months or had seven or eight phone calls, his partner was boring the money from the partner's account. it was money the irs couldn't get his hands on. because the dollarment was over, they were going to file a lean on him anyway. which made the taxpayer angry as the record noted.

would have made me angry too.@@r their debt. >> well, so the bottom line of it is if you are working and paying your debt, you are paying your taxes too and continue to be productive. >> yup. >> mr. miller, ms. olson's

testimony about the irs's use of lien as to what i learned about the use of liens conversation i had last fall. in that call we discussed irs decision to file liens against taxpayers subject to the tax shelter disclosure penalty even though the irs had agreed not to pursue collection against such taxpayers until congress had a chance to change the law. in general, i'm disappointed and the lack of judgment and discretion and exercise by irs employees, agents, lawyers, collections and appeals officers in certain of these cases. and in some cases, it was an irs regulation that prohibited the irs from abating the penalty such as by not allowing the filing of amended returns. in another case, irs did not consider the negative impact to a taxpayers line which was critical to the business before filing a lien. mr. miller, everyone including

the president and treasury secretary agree that small businesses are economic engines of our recovery. the health reform bill imposing new burdens on the small businesses. so while i appreciate the commissioners statements regarding a kind policy of restraint for individual mandate, i would like to what happens the irs will be doing to help small businesses comply with the multitude of new laws and regulations. specifically, will the irs develop the communications or outreach for small businesses and develop a similar policy of restraint for the employee mandate, and if you think i'm too much concerned about small business, before you answer that question and that'll be my last question, i'll give you the background that when we set up the commission, prior to 1998, and i think it was a couple of years before that, we reported 1998. it was because there was a lot of lack of concern about small

business and outright harassment of small business that we don't see in regard to big corporations. so that's why i'm coming from. if you could answer the question, i would appreciate it. >> certainly, senator grassley. first, with respect to whether we will have an outreach plan for small businesses as well as other important components of the economy, yes, we certainly will do that. we're working on that as we speak. that's a -- as we approach the health care we will do what we do with any piece of legislation which is approach is on a holistic bases beginning with communicating two people about what they are entitled to under the bill and their responsibilities are making available folks to answer questions, putting in place system that is will allow the processing of returns. and obviously we'll have an enforcement component as well. on the second piece as to

whether we will utilize similar restraint with respect to small business, i don't have an answer to that. i do know that when you talk about the individual mandate, congress acted there to limit the number of tools in our tool box. they did not act with respect to small wisconsins, but it's my assumptions that we will work together to get to a place that we are comfortable. >> thank you, mr. chairman. >> thank you, senator. let me ask you, mr. miller. i think this is also true in the state of iowa. there's no permanent appeals officer. irs appeals officer in the state of montana. i think it's true in the state of iowa, there are 18 states without one. some of our states are pretty big. it takes a long time to try to drive to them. and as a neighbor of other

states. what about that? why can't we have an permanent appeals officer from montana. it just seems to me some of these other states too, all 18 states i'm not just going to say montana only. but, you know, if somebody wants to appeal and has to drive to salt lake city or denver, that's a long drive. >> i would agree, mr. chairman. it's a long drive. i don't know what the -- why appeals officer are where they are. i can say two things, one is it is about resources and secondly, we are face to face and the that's the case today. whenever it makes sense to have somebody in montana or iowa. i don't have an answer to that today. i can come back. >> one thing that's always struck me over the years is that some cabinets, some departments

have a lot -- have people out in the field. frankly, they do better and there's more -- better report with the people and the department. compared to other departments. let me give an example. in my state, montana, there are a lot of usda personnel. there are very few housing people in the state of montana. and there are -- and the opinion that montanans have the state is very high. certainly higher than the department of housing or development. because there's nobody in montana. but we do have a lot of issues with that department. and i'm just throwing ideas out to give, you know, the marvels of modern technology. as you mention, not all appeals will face to face. i can put people out in the states. and they can construct not only

face to face appeals but also they can do some of the appeals by correspondence. it might be in some other state. at least you have people there in the state. it gives the appeals officer and his or her people a sense of that state too. and it gives access to people in the state in montana, for example. to appeals officer if the taxpayers want to appeal a decision. i think it's good to have people in washington, d.c., i believe that very strongly outside of the major cities. get them out in the country. so they can better understand what's going on. >> yup. >> we do have appeals officer that are outside of washington. >> i'm sure you do. you do in 32 other states. but you don't in 18. >> yeah. i'm sorry. i will come back to you with a more detailed answer. i'm not sure what the thought

process is. expect again we have a limited amount of resources. there are 2,000 plus appeals. >> no, you didn't hear my point. take those same resources and put them in other places. you can do a lot of work by electronic correspondence. it likes a lot of time for the circuit rider to get there. that's a lot of frustration for people. and frankly, of the executive branch of the treasury to address the tax camp. the last time the tax gap was estimated by, i think either treasury or irs was 2001. back then i think it was 340 billion of dollars. why? it's unconsciencable. if the irs does not more aggressively address the tax gap. these are taxes legally owed but not paid. it puts the burden on the rest

of the taxpayers who are paying their taxes. what's the plan? i made this point constantly. i'm getting nowhere. nowhere. it's just a stone wall. not like you are protecting all of these folks that aren't paying their taxes. >> i don't think we're trying to do that, mr. chairman. >> well, it appears that you are not doing much about it. >> my understanding of when we will update the chart that we have is at the end of 2011. that's the current target. what we are doing is multifaceted. we talk about some of the things this morning. but i split up what we are doing currently, what we will be doing and what i would ask to help us with. >> we'll help, because we don't have a plan. >> the first is what we're doing currently. we've talked about return which is leveraging with respect to

individual taxpayers. we've talked about offshore compliance which is work that we're doing. and we have, in fact, increased the number of examinations, we've increased our nonfiler work considerably over the last decade with respect to where we are headedded, congress and you in particular sort of helped us immensely in terms of the new information, streams of information we will be receiving and we will be able to do that matching as it comes in. that will target specifically the under reporter portion of the program. whether it's credit card, whether it's basis reporting, these are thing that is are going to help in the next few years. what i guess i would ask famously the 2011 budget support which provides staffing for those of some, which provides a couple of ideas as to rho we can move forward, including a employer independent contractor provision that will help us get at misclassified employees.

another key component of the tax gap. >> all right. you know, i asked secretary paulson -- in fact. i want to make sure i state that when he was secretary, he said a goal for voluntary compliance was 90% by the year 2017. compared with the rate of 84% i'm told in 2007. so that's 6 percentage point over 10 year. of that was the goal. i asked treasury and irs developed a plan. so i'm asking you again, i'd like to -- what's today? tax day couldn't be more appropriate. we meet again next year, i'd like to know the degree to which you progressed. i want to hear your plan. by what percentage, what's the percentage progress? .

>> understood. i want numbers. i don't want goals, i want numbers. i want data. i want metrics. i want benchmarks. i am fed up the failure of the treasury and irs to adequately deal with this problem. fed up. there's one way to change that. that's to produce. we want to help. we will help. but i don't get any sense that the irs to really significantly addressing it in a meaningful way. i keep brushing it off. brushing it off. that's how it appears. senator wyden. >> thank you, mr. chairman. i share your view with respect to the tax gap. i look toward to getting that information. i think it's absolutely pivotal. a couple of points, one, of course, ms. olson, if you simplify the tax, you know, system, it'll be easier to collect taxes owed, isn't that correct? >> one would hope so, yes.

now the overwhelming majority of taxpayers in this country are honest, they are people who work hard and they play by the rules. there is just no question about that. but it seems to me that taxpayers that i'm speaking about, the overwhelming majority who are honest often make inadvertent errors, they end up over paying their taxes, or they under pay their taxes because the system is so complicated, it's not possible to get an accurate assessment of what's owed. how rev hasn't is that? i'm struck when i listens to folks at home in oregon that there is a very, very substantial problem. could you kind of put some numbers around it? how much people honestly trying to comply with tax law get snared in this bureaucratic, you

know, water torture and even over or under pay? >> the only number that is i have seen from the 2001 national research program audits of individuals where we asked audits to identify whether an error was essentially intentional or inadvertent. and the auditors only classified 3% of the errors of the returns that they audited -- this is a random sample of individual taxpayers as intentional. but -- >> so -- >> now the -- the irs always say that is we didn't give good guidance to the auditors. they don't know what they answer. that's the only number i've seen. >> and i recognize with your caveat that these are not always, you know, scientific in every particular. but what you have told us is what is my seat of the assessment. it's the vast, vast overwhelming

majority of instances that involve people who are anxious to comply with the rules, they want to be honest, and just getting snared in the net of bureaucratic torture. and that is essentially what i think has to change. now my view is -- and i think y'all have recommended. we aught@@@

this destroys business the prospect of certainty and predictability and the same is true for individuals and prepares of course very

frustrated as well because you try to get accurate answers to the clients. how serious is the problem getting consistent answers from the irs and what to be done with it? >> this is a result of the complexity of the law and the response when the accuracy rate went down several years ago was to limit the questions they what the answer so we've gotten a very high accuracy rate in the 90s on the phone. but they get there by taking off all of the difficult questions or things the irs called out of scope which doesn't solve the problem. the problem is the law is complex and difficult for the irs employees to answer a particular taxpayers questions accurately, consistently. >> they try to solve the problem by pretended that doesn't exist. >> that's my assessment. >> thank you for holding this important hearing.

>> thank you. senator nancy, you are next. >> thank you, mr. chairman. early eckert you asked some questions i want to delve more into. this will be a question for mr. miller. is the onerous restructuring the 1998 commissioner the internal revenue service shall insure an appeals officer is regularly available within each state. yet wyoming and eight other states don't have such personnel physically located within their borders. the appeals process is the last step processors to to argue the merits of the return before another decision is recorded and collection process begins. so i think it is critical all taxpayers even for all tax payers have unfettered access to the irs officers. once that understand the area. wyoming is a state of high altitude and global to and lots of roads and but somebody has to kind of understand that to

understand the people that live there and i realize the act also permits the irs to video conferencing in rural areas but i don't think the nation's founders guaranteed rights to two process under the constitution. i know in some circumstances that could be hamdi but videoconferencing doesn't give you all the body language and capability. i understand the with the agency budgets are strained the bottom of asking to hire new staff. i think it is perfectly reasonable to suggest the irs redeploy existing resources to provide at least one full time appeals officer and one full-time settlement agent in every state. would you agree to assess the feasibility of doing that redeployment so there would be irs resources that would

guarantee a full-time appeals officer and full-time settlement agent per state? you don't feel they would be busy enough of the state they could drive into the other states or thrown into the more popular states that we would like for them to be in there and i would hope you would agree to get this assistant to the committee in a timely fashion. i'm sure my colleagues from arkansas and idaho and north dakota would be interested in the finding since they are two of the appealed that lack the appeals officer and settlement lights. >> understood. we will be glad to take a look at that. >> i might ask to take a look at it to send a letter back to this committee after you've made that assessment. >> this is of critical importance to almost a majority of this committee. we would like answers on that and i have had comments from our tax payer advocates in the state

about what a difference there would make and it seems just as reasonable to have people come from wyoming to other states or video conference in other states and wyoming and i ask the chairman -- >> thank you very much. now we are going to hear from the senator from kansas. >> i think that is [inaudible] the member for his alleged work senator enzi as well and think you folks for coming up in the wood is a busy time for you and taking the time to come up and try to answer the questions. as you know most of the questions have been about the mandate that individual's purchase health insurance and

basically the bill imposes a penalty that would be collected by you folks for those that fail to obtain the irs obtained insurance. i think that the rule will be straightforward. it's great to be added and mistreating the tax provisions. i think there was a statement made by one of your folks and i would like to know how will people prove to the irs they have health insurance? how will approve the venture and speed reported to the irs? i read several reports in the press there's been a lot of confusion about this. is this going to be a form of a 1099 the detachment from an insurance company or what? how are they going to prove this? >> senator, that is basically correct. the bill in the beginning stage is looking at the systems and all of that and we can get into that, but the bill itself

indicates insurance companies will be sending 1099s. our thought is that is how we will be matching the yes and no answer as to whether you have eligibility taken up by a plan that meets the requirements under the law but the insurer is making a determination. probably in all likelihood we are not going to look behind that. we are going to receive a 1099 that says yes or no. if the answer is no we will talk to the taxpayer. we will do that of course no doubt. >> the next question how with the irs be about to cross check or verify the information submitted by the taxpayer with information submitted by the insurance provider. there is a forum in massachusetts they call it the tanned 99hc form. that is an additional three page tax form and tim page instruction booklet. is that what we envision for everybody? >> i'm not familiar with the

form, senator. i don't think so -- >> i hope not. if it were three pages from the standpoint and ten pages of the destruction it would probably be six and 20 at least. what will happen if an individual does not purchase insurance therefore required to pay a penalty initially as little as $95 increasing up to 695 per person a year how would you collect the penalty? >> with respect to the individual mandate, congress has been very clear in terms of the rules we can use and we cannot. you cannot use levees. it's not a criminal penalty. but there are tools we can use and we obviously will be notifying folks letting them in there with do we have these classrooms. >> as i mentioned the matching program we will be sending out a notice that we happened to notice we didn't get a 1099 with respect to health insurance here

and an explanation of that. >> we have a highly mobile society here within that particular group as well as being highly mobile. i don't know how you will keep up with that by mail, i guess it's mail. we will let that go. let me just point out to set you are still in the process trying to figure that out and i understand that are trying to implement and dread plan for contingencies. everybody does in the business community. every health providers sitting down there with their lawyer, c. p.a. and actor larry. this is the lawyer, cpa at to react i think that day divided it up and they keep coming to my office and there's a gentleman over here to my right asking these questions. if an individual doesn't have a tax liability, doesn't need to file returns that is required to pay the penalty for not having insurance how will you enforce this provision? >> you kind of stepped beyond my understanding of the bill.

if there is no filing requirement i will have to come back as to what the health bill requires that situation, center. >> i'm down to 14 seconds, but the health care provides a tax credit for small business for two years to help manage the cost of providing mandated health the germans to employees but there is a cliff in the second year where the credit expires. what would be the cost of small business? have you made any kind of estimates or guesstimates to provide health insurance without this tax credit? what will be the cost of compliance for small business? that is a very key question. can you comment generally if you don't have a specific answer the cost of compliance for small business. >> i don't think i have any numbers in that regard from the irs. >> but you think you might have? >> i'm not sure the irs would be doing the analysis on that. we are administering the provision as best we can. >> who would?

>> i would assume -- >> if we ask the cbo is that the answer? >> it is possible. we have responsible over administering the credit and they are active in terms of making sure folks know it exists. >> would be the compliance for indigenous and families to meet the individual mandate requirement that requires individuals to purchase entrance to prove the evidence and pay a penalty for not obtaining insurance. it gets back to that individual and the individuals cost and what they are obligated to do or not obligated to do i think that is a question upon it but if you would like to comment on it and also your time is more than expired. sprick thank you. i might also add there is no mandate for any small business with 50 or fewer and we use. >> i just have one question for

mr. miller with regard to the comments the national press club on april 5th in that speech indicated that the individual mandate would be enforced through matching program of some sort based on insurance companies providing 1899 document to an individual who would attach it to the return. then in a recent television interview he stated the irs would not be auditing individuals to check their insurance status. this position was then reiterated today in "the washington post" op-ed. what incentives to individuals have to purchase insurance they know the irs won't be checking and will be seeking to collect individual mandate penalties? >> we will be looking, mr. brusquely. we will be corresponding with people whether that triggers examination or not it is going to depend on a given case. it's not likely what my boss was saying that is not the kind of

case that we send out an agent to pursue it is the kind of case we correspond with a taxpayer congress limited the tools we can use but we will be talking to the taxpayer and we do have a refund offset mechanism in order to enforce the provision. that is in our toolbox. >> let me give you this, some idea something could happen, so if you have matching which is one of the ways of checking if an individual doesn't purchase health insurance and it wouldn't be receiving anything from the insurance company and also has no filing requirement with the irs with the irs the match against? >> again that is senator roberts question as well and i will have to -- i am not sure of the income levels and when that requirement triggers so i have to get back to the committee on

that. >> thank you. i thought i would ask a couple of questions. how many dollars do you think y#rrrrg$rrk'the tax evasion each supporters are on the fact of the bill is going to get a much better sense of what is out there as people either come in or for an organization's become subject to the 30% withholding alternative so that will give a much better feel for what's out

there. >> that is a provision that we put in in the higher act. >> yes, sir. >> how much do you think that you will clamp down and that local? >> i think i started with the statement we don't know what we don't know. the fact is going to give much more information to know more and so the on a certain part should be reduced considerably within the next couple of years. >> what questions should i ask you next year when we have this hearing? >> i think by this time next year we will have a much better sense of our next targets in the offshore area. i think it would be fair for this committee to be looking for a much more robust discussion on where we are on health care and

much further along on credit card reporting basis reporting in fact the information tools you provided us we should be prepared to discuss a much more detail. >> a year is a long time from now. some of that can be addressed earlier don't you think? >> certainly. and we are not waiting for the hearing to move. some of the information reporting requirements are not yet triggered. they will not be in effect yet. certainly offshore will have made significant progress i hope. >> this is a little bit in complete this answer of yours. basically saying you don't know. help us figure out a way to get that information or then you just now said. maybe we should meet again six months from now.

>> certainly willing to do that. >> do you know you well know more in six months and now? that is enough to make progress report? that's meaningful? >> of sure? >> we will be much further along in terms of the outcome of the monetary disclosure program on the outcome of the john doe work and in follow-up investigations as we pursue other leads in the information. >> how will you know how much is lost offshore. >> that does have to wait until fact of reporting comes in and that isn't a couple of years off. >> why does that takes a long? >> again, we don't know what we don't know. we don't know who is holding off sets out of short. >> why does it take so long to figure that out? >> there is no reporting of that or they are not reporting accurately and the leverage points are being treated by a factor which will come into play in a couple of years.

sprick you have to refresh my recollection. >> it is requiring a dupe qualified intermediary program and increased reporting both on the individual side with respect to the bank accounts that i might hold off shore and also new withholding regime whereby -- >> as we've just been discussing. isn't that the 30%, potential 30% requirement of foreign banks to report? >> correct. >> that is a fact of? >> along with beneficial ownership and statute limitations a whole host of excellent provisions. stat you are very welcome but i can't figure of why it would take so long to find out how much we are losing off shore. >> [inaudible] >> you can't answer that question more quickly?

in respect of what the law says why don't you come back and tell what changes you need in the law if it takes additional legislation. >> there are a couple of provisions in the budget along those lines. >> what are they? >> there is one about the transfer of intangibles overseas to the low tax jurisdiction and there is also the removal of a deduction for certain premium payments to u.s. foreign affiliates for the reinsurance so i would commend those to the committee. >> would be those provisions to deal with offshore loss? >> i think they will help in terms of international, the shifting of income overseas and they will help in terms of that not necessarily offshore accounts obviously but in terms

of the largest business taxpayers shifting the income to a low tax jurisdiction and peacekeeping u.s. tax. >> i appreciate the intent i just urge you to be more aggressive. >> yes, sir. >> okay. thanks very much certainly need a year from now and follow-up on these questions and we may meet earlier. we will meet earlier. and you are going to answer that question by senator enzi and myself. >> yes, sir. >> thank you. the hearing is adjourned.  ????????xxxx??????????????x???xa cccccccccccccccccccccccccccccccc çcçcçcçcçcçcçcçcçcçc 7xoaú