>> okay. good morning.

welcome. i call to order the subcommittee on oversight. i want to thank everybody for joining us today. we're holding this hybrid hearing in compliance with house resolution 965. accordingly, i am joined but members here in the hearing room as well as approximately ten members on the remote platform. that's outstanding, and i want to thank them for joining us. before we turn to today's important topic, i want to remind the members of a few procedures to end-us navigate ther the -- help us navigate the terrain here. first, consistent with regulations, the committee will keep microphones muted. for those participating virtually to limit background noise. [inaudible conversations] we'll pause for one moment. [background sounds]

>> 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 logging9 out. third, we will discuss pence with our practice of observing the gibbons rule and instead go in order of seniority for questioning,al for nateing between minority -- alternating between majority and minority.

i thank you all -- >> [inaudible] a quick technical issue trying to get the streaming from 1100 to show up. just so you're aware, the audio e is streaming on youtube already. so the video will be going live as well. once we get the -- naudible] >> 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 today's hearing, a conversation with the commissioner of the internal revenue service. that's why we're here. so good morning. i welcomey 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 prossionally. mr. rettig, this committee has waited a long time for you to join us, and we were looking anxiously, wting anxiously. nearly two years. it is astonishing this ishe first time you're appearing before the chief tax-writing committee in the house. i mean, put yourself in our shoes. we're trying to do our job, you're 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. i'm not suggesting either, but the point of the matter is we're glad you're here. i'm disappointed you refused to join us for our 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 pay their taxes assuming the system is fair for all. whether you're 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 but the president. 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 i've led congress'

efforts to request mr. trump's business and personal tax returns. not because i'm a snoop. i'm 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 don't know what we're hiding, but we have not known, we have not found out yet. it is ouresponsibility to reste the public's trust in our tax syste the president's business and peonal returns mus be audited

impartially and without political interference. yetvery time we ask a question, we're reminde it's still being audited sin 2016, before 2016. so we have some questions. the american people he a right to know whether that's what's ing on. time is of the essence. just last month "the new york times" reported that self-proclaimed billionaire mr. trp paid only $750 in taxes in 2017-2018. $750. and in 10 of the last 15 years he reportedly paid n taxes. when y listen to the explanation of why that happened having nothing to do with you, but when u listen to it, you have toonder is this reading out of a cartoon magazine, or is

this really happening? is this a fantasy or reality? the teachers andirefighters, police officers, the people who collect o 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 fro our constituents who have failed to receive their ecomic impact payments. i'm vy angry over that, and i'm sure you are too. time and time again. i lookorward to discussing how the irs is rectifying these dire situations. no one who is eligible should have toait 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 ld not to expect 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 the irs. mr. commissioner, we'll be following up on my question at the oversight and government reform committee hearing. are you not auditing wealthy taxpayers and corporations more, tensively than -- more extensively than low income meshes. let me now yield to few good friend if, the gentle lady from indiana finish. >> thank you -- >> we're honored that you're here. >> thank you, mr. chairman -- >> you've got five minutes. >>'m thrilled to be here. i'd also like to thank you,

mr. are rettig, for your hard work at the irs. i also want the thank the dedicated men and women of the irs that have worked so hard 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 cares act required that the irs talk on a number of tax tasks -- tasks, but none was greater than sending 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. now, with that said, i think all acknowledge 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's a few main issues i think the agency needs to address. i hope you'll be able to provide the committee with some answers

on how the agency plans to do so i'm concerned about t current backlog of mail and unprosed returns that has -- unprocessed returns. 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 baiting on refunds for tax returns they filed as far back as march and april. second, given that this mail backlog may not be resolved well until 2021, i'm concerned about the agency's ability to prepare for what is likely to be another major and difficult filing season. third, on the eip payments, or i'll saw that the number of payments you is sent out and how quickly you did so was incredible, but i have heard from a lot of my constituents -- and i know my colleagues have as well -- about the situation where folks are still eligible but still have not received anything. so i would appreciate hearing more about what the irs has done and will do to make sure everyones who is eligible for an

eid receives their payment. and then i also want to acknowledge that the irs this week released guy e dance on the paycheck protection program related to the tax treatment of expenses paid with a ppp loan that have not been forgiven. many small businesses are struggling to stay abloat all over this country. -- a afloat all over this country. we need to pull together to insure these small businesses have relief, especially those forced to close their doors due to state and local covid restrictions. i'd also like a update on the bipartisan taxpayer first act. as you know, we enacted this important law last as a rult of bipartisan work. this historic overhaul of the irs requires implementation work on the pt of the agency, and i'd appreciate an update on your progress and what challenges you're nation. i want to make sure we don't let our response to the pandemic hinder the long-term work that still needs to be done to improve and modnize the irs. with that, i thank the

commissioner for his testimony, and i yield back, mr. chairman. >> yes. we will dismiss mr. kelly. we'll next hear from our only witness x 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 in five minutes or less. to help you with that time, please keep an eye on the clock. the light's in front of you. if you do go over your time, i'll notify we a tap of my gavel, but we're here to listen to you. commissioner, you may begin. >> thank you, chairman pascrell, , 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 covid-19 situation. initially, mr. chairman, respectfully, i would like to indicate that i disagree and take exception to the terminology awedded and abetted, but i cannot speak to any matters associated with that since those matters are in litigation as well as those matters involved to specific taxpayer information which i'm 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 at the internal revenue service. knowing that 96% of the gross receipts of our country flow through the irs has strengthened that my belief that it's critical to the success and well-being 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 covid-19. the response serves to illustrate how critical i is for the agency to receive consistent, timely anddequate multiyear funding such that we can success seed inroviding -- succeed in providing the services that our country and our citizens so rightly deserve. employees have worked since mid march 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 balance the statutory requirement to deliver these payments, quote, as rapidly as possible as dictated by the cares act with the 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 that's miraculous, and it's 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 equal lu important. during this period of time, our employees have been out, involved in and engaged with community, local community organizations trying to generate economic impact payments for people who are needy. we're essentially to the point of interacting with the unsheltered communities. we have interacted directly with more than 4,000 homeless shelters, numerous different os around the country.

i'll have 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 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 our country. we also temporarily adjusted numerous processes to help people and businesses during these uncertain times. as we will discuss, we have also just delivered a historic filing season 20 not only in terms -- 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 i'm probably

as proud as anything else, and we have a lot to be proud of, and i do want to, tend the opportunity to meet -- extend the opportunity to meet with each of you 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. is so when i got onboard, these numbers were between 6-99, and this all came -- 6-9, and this all came together -- 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 mountain 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 didn't call attention to somebody who's been by my side since i came on board two years ago who has been at every hearing that i've 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 nub 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 appriate, sir, your with acknowledgment of her. she's an amazing individual. [applause] now that i've embarrassed her, sir, i will turn it back to the committee. >> i'm glad, commissioner, to hear somebody say something nice about our employees, and you have -- >> sir, i came onboard 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 we are joined by my good friend, mr. kelly from pennsylvania, who walked all the way from pennsylvania to get here this morning. [laughter] 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. that's unusual but we'll try. all members should be able to ask questions. as mentioned earlier, we will not observe the gibbons rule, we will instead go in order of seniority for questioning. alternating between minority/majority beginning with members of the oversight subcommittee. members awe tending remotely are reminded to unmute yourselves

when you're recognizing for five minutes. i'll recognize myself for five minutes, mr. commissioner. mr. rettig, when president trump took office, former congress -- former commissioner koskinen volunteered to resign before his term ended. you stated this week that you plan to finish your term. that term ends in 2022, if i'm not mistaken. do you agree that you serve at the pleasure of the president, yes or no? >> yes. >> mr. rettig says yes, and i want to thank the commissioner. i'm glad we agree. will you proffer your resignation to president-elect biden, yes or no? >> no. >> if relate ugh -- well, you're

saying no to that particular question, right? >> right. >> i'm asking you, mr. commissioner, to proffer your resignation to the incoming president to facilitate the transition to the new administration, and i recommend that it be accepted. mr. commissioner, under a new administration, if you are asked to provide soon-to-be former president trump's tax returns to the committee, will you ply? ply -- will you comply? >> sir, as you are aware, i cannot discuss issues pertaining to the tax returns because they are involved in litigation. >> so you're not answering that question. i'm not asking anything but will you provide if you're asked? >> sir -- >> and you answered no. >> i'm not going to speculate, and i can -- >> so you doesn't answer no. you said you're not going to answer at this time. >> i cannot answer the question, sir. >> mr. commissioner, internal revenue code section 6103f, and you are familiar with that by

now, correct? >> correct. >> gives the committee clear and unambiguous authority to obtain anyone's 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, will the 2021 tax filing season start in january? and if not, what month do you expect it will begin? >> we are currently -- we actually accelerated our programming testing. we've gone through health testses for our equipment and our technology and what not. with we accelerated that by more than a month so that we would be prepared since we were not aware of what might happen with respect to continuing resolution or a lapse. to we are on schedule -- so we are on schedule. and per our acting chief information officer, we are

cautiously optimistic which is for a risk-awe verse agency, the highest level of assurance that we can give you, that we will open on time. we conot make the time determination and have never made the time determination until mid april. once we have gone through the rigors of our programming, testing, development, and we actually test, you know, i think the number is more than a million returns before we indicate that we're ready to go. finish historically, tax season has opened in the end of january. i think on occasion it has happened early in february. and we have no reason to believe that it'll be plait orer than that time -- later than that time frame. but we will advise you if there is something that causes that to change. >> well, mr. commissioner, do you intend to tell the president-elect before he a raises his hand on january 20th whether or not, where where we are in the schedule anyway? do you think his administration, the next administration -- regardless of who it is --

deserves to know beforehand and at that transitional point? will you tell them and give them any information in. >> sir, my interactions with not with the white house. my interactions are with treasury. and so that would be the course of conduct and discussions that i would have with people. >> i mentioned in my opening statement i'm extremely concerned but e the unfairness in the irs' audit priorities. with many low income taxpayers, especially eitc recipients, being audited more than wealthy individuals -- that easton record -- that's on the record. while i do not have a specific question at this time, i want you to know that i've asked the gao to provide data on audits by income group to the congress. i think it's important enough to look into. mr. commissioner, i'm concerned by the recent executive order that would reclassify what you called at your confirmation

hearing absolutely world class career irs workers as political appointees. this would undermine the impartialitity of the irs. how has the irs taken any steps on this executive order, and how many employees do you expect to reclassify? >> the executive order is under review. as i understand it, it requires a response on january 19th, and i would suppo the comment that i made before and i think that you endorsed that we do have world class employees, and we ha demonstrated that every single day during mywo years and before i came on board. >> yeah, i have no problems with the employees, as you well know. my problem is before you got here too how they are, how we operate day-to-day. how we put a budget together. and since you're part of the administration, is your idea of the budget the same as the

president's. the way that you talk, you brought up the subject, i didn't, of funding. are you satisfied with the -- you don't have to answer this question. rhetorical question, are you satisfied with the funding of the irs at this particular time. including personnel. i know what the numbers are every year since 2010. and i know when each president submits his budget as every other congressman does, and i know what we final will e vote on. >> can i respond, sir? >> i didn't ask a question. >> i know that. i now recognize ms. walorski for five minnesotas to ask her questions -- minutes to ask her questions and thank her for staying. >> thank you, mr. chairman. commissioner rettig, i wanted to switch gears for a second. my office has experienced some difficulty in resolving constituent case work due to the backlog at the kansas city err resolution operation. few understandi is the current

backlog is close to 6 days, so i know my office isn't alone in the concern that the irs has a backlog of approximately 3 million pieces of unopened mail and 7.6 million unprocessed tax returns. i'm fully are that the pandemic has taken a snificant toll on all of your operations, and i know we have to do better. ing i have hard working hoosiers who need a swift resolution to their cases so they can continue to put food on the table. given manyrs employees have been on cid-related leave for months,an you give us any kind of a quick update on the operating status at the kansas city center? and then how do we plan to get thugh this backlog? >> yeah. let me, wil the me clarify tha the unprocessed return inventory is about 1 million. >> o.k. >> the mail backlog is about 3 million. >> okay. >> the returns in process, which means they've gone through t system and they're about to be posted, is 6.8 million. >> okay. >> and as we've cared into

fiscal '21, we' a little bit high on our carryover from fiscal20 to fiscal '21, but not noteworthy e in terms of risks to the operations. >> okay. >> if you will. and in terms of the kansas cy and simply the other tee submission processg sites, kansas city is about six weeks behind. we have actually trans-shipped paper to som of t sites memphis, fresno e and austin, and some of the sites, one of th sites that we have on november 7 was processing receipts that came in november 6th. another site on november 7 was processingeceipts that came in on november 2nd. the thir one, i think, is about october 20 on november 7. they were tt caught up, and kansas city was at oober 2nd. we have actually, we're working split shifts, and -- obviously, we're socially distanced, but given the fact we have so many peop teleworking, we hit our high ts week of 59,000

employees teleworking which is definitely a record for us. that has given us more space so we can socially distance in spas where previously we had emplees sitting and doing somethin else. so we have reallyone all we can do. we've also offered the processing employees overtime an weekend work. and what i can say is, you know, on behalf of the internal revenue servicend every employee for literly every american, we appreciat the patience and understanding they have had with us. this is not an euse, but i will say that to our employees went through the same exact thing as every other american during covid with respect to health and safety concerns for themself, for their family, for their neighborhood, their community, and it was a highly uncertain thing. to the extent it's created significant hardships, we're doing our best. was doing my best. >> uh-huh. >> i was with one of my idols behind me, and we were trying to

figureut everything we could to on a daily basis to lessen burden on people. we didot always, nor would anybody else, get things right. i do think as far as a federal agcy that we did at least as well as any other federal agency given the monumental tasks we inherited terms of eips and all the busins issues. and we took on eip programming for both the veterans administration, social security administration while we were doing our filing system which is our normal high risk -- >> sure. >> but at the end of the day, i am the person that shut down about 51f our facilities -- 511 of our facilities at the end of march based on health and safety concerns for our employees. and i'm also the person that was instrumental in figuring out how we would do a phased-in reopening. and we have a covid czar, if you will, who not onlier sewer acted with other -- interacted with other federal agencies, but

around the world as to what they were doingo lessen the burde on their people and let them know what w were doing similarly. i will say we tried our best. an example of where you all have a right the complain is we did the congressional mailbox. th was an effort to be ae, for us to be able to work those unboundsvernight rather than a phe situation where we were t going to be able to answer the volumef phones that were coming in. that was one of my bright ideas, thinking, well, let's put them in this congressional mailbox. it got overrun and created a series of probls on its own. on a go forward, which you all have questions about, we now have a web-based scenario that we're doing. so you don't have to go into an e-mail inbox and get transferred several down. we have lessons learned, as you would he. and i think -- >> i appreciate it. thanyou, mr. chairman. i yield back.

>> to members in atten dance and consistent with committee guidance, we will move to 2-1 questioning. the chair now recognizes ms. dell vainny for five minutes. >> thank you, . chairman. >> you're welcome. >>hank you, mr. chairman. and thank you, commissioner, for joining us today. in july i led a bipartisan letter with 111 of my colleagues detailing concerns that our constituents have raised regarding the economic impact payments. since the cares act was signed into law, i've had several constituents reach out who are facing financial hardship due to the covid-19 pandemic, and they're still waiting for their economic impact payment or are waiting for an error in their eip to be resolved. in your response to our let ier, and you referred to this a little bit ago, you cited technical -- [inaudible] eip mailbox.

you said ethos challenges are, quote: attributable to the capacity of the system being used by the mailbox and the mandatory tools on the platform, end quote. commissioner, we talked a little bit about what you'd do differently. what do we need to do, what technical challenges do you face and systems modernization is a very important issue at the irs. i wonder if you can address what needs to happen in order to make sure we can respond better to issues like this in the future. >> thank you. and as i indicated, i am the person who made the decision on the mailbox. we implemented that within a matter of days. it seemed like the right decision at the time. it did get overrun, and i think i have and i will continue to apologize. in terms of modernization, in april of 2018 the irs issued its modernization plan which was a six-year plan with the funding

requirement between $2.3-2.7 billion. the first two years of that plan the funding that has been allocated has been about half of what was requested. and, therefore, obviously, it's extended beyond a six-year time frame. so we have and would certainly welcome the opportunity to sit with you to go through what we are planning for modernization both under our modernization plan as well as you're aware that we're implementing a plan which we will deliver soon up on the hill, the tack i payer first act, which has its independent set of modernization features and what not. but the last part of your comment, i think, is, you know, what can you expect from us going forward. what you can expect from us going forward is we have lessons learned, we have a lot of partnerships and a lot of industry specialists on the outside that we contract with. so it's not an irs alone project

in terms of modernization, and i would include congress in that same feature. our staff has done a lot of briefings on the hull. we would continue to do so. so, if invited, we will come up to the hill to do briefings where we are with respect to modernization, and i think you're going to receive briefings either, you know, depending upon calendars, but either in december or early january with respect to the taxpayer first act which has also an independent set of significant modernization features to it. >> mr. commissioner, how would your i e rs plans for fiscal year '21 be cut back if funding is not increased over the fiscal year '20 level? we know that senate appropriators have not increased irs funding, so what would happen if that does not increase in fiscal year 2021?

>> the history has a -- the agency has a history to reacting to funding challenges, let's say that. and we operate in a variety of ways. i think you're aware about 70% of our budget is staffing, and then we have significant rates of attrition. so not by choice, but that tends to be one of the first issues that goes. we do not cut funding for our mission-critical core activities, nor would we we. but we will adjust, and we will adjust as the agency has done throughout. i would like to make one quick point also in addition to all of that. i believe that just about every administration since 2010 has made a request in the administration's budget for a program integrity cap which is specialized funding specifically addressing and appropriated for enforcement activity. and i believe that since 2010 that has never been approved or funded. and so as long as i'm here, if i

could take that opportunity to make a pitch that, you know, it would help if folks would look in that direction for the agency. >> i understand the importance of modernizing technology. having a great work force is also critically important, so those cutbacks are having an impact on our constituents and the response they get. so i appreciate you raising how critical it is that we have those resources available. my time's expired. thank you, mr. chairman. i yell back. >> thank you. >> -- has expired. and we're going to continue 2-1 questioning. i'm going to call on in a second ms. sanchez from california, the gentlelady. but i want to say this, commissioner, since 19 -- 2010, rather, and in the last years leading up til now, in the

enforcement area which is under your guidance and responsibility we've gone from 50,524 employees -- you know these figures better than i $to 33,529. that's down 17,000 employees. that's all wonderful and we both agree to praise the workers because they very seldom get it. but these are our numbers. employees did not vote for this. and in the taxpayer service, it went from, it's less of a hit, went from 32,029, so that's a 3,000 difference. you cannot enforce the law are, i would say -- and you may discuss agree with me -- with 17,000 less employees than you hadine, ten years ago. >> sir, i'm not only going to disagree wh you, but i will --

i think is appropriate at this time to indicate that from 2011 to 2018 we had a hirg freeze as well. so with adistribution and a hiring freeze, i will say two commissioners agoade comments that we'll do more with less. the last commission indicated we'llo less with less, and i have not said that because i ink that puts the burden on our employees. and the ones who are with us are working really hard and get it, and they want to do it. what i have said during my two years is we want to do me. we will work -- we don't vote for funding. we will work within the fundi that we receive. it's my job and the job of our leaderip team toal -- to allocate that funding as best an appropriate as we can. and you've heard us or should have heard us talk about being in every neighborhood. ..

i now ask the general california sanchez -- five minutes. >> thank you for joining us. i'd like to start with an issue i raised in our previous hearing in which the irs has unfairly focused on the wrong population for us. all taxpayers to tax systems that's unacceptable. pacifically, the audit rate taxpayers earning over $1 million a year. as i'm sure you likely know, the

taxpayers has been cut but the automated program for low income taxpayers is chugging along at higher rates. we've recently had testimony from experts regarding how audits pass and deter cheating. do you agree it deters cheating? >> fly a greek -- i missed the last part. >> do you agree that they deter eating? >> correct. >> what is your agency chewing seeing to go after far higher rates while it's unchecked? >> i believe you are referring to the earned income tax credit examinations which are correspondence with what we perform -- >> no. mr. commissioner, i am referring

to audit overall. overall, taxpayers can make over $1illion, audit rates have been cut in half and yet, for low income americans, the audit rates he continued to increase increase. why are you not equally enforcing tax laws across income levels? >> we are. i'd be willingo sit with you to walk you through the statistics on that as far as also the staffg we have on that. i can tell you every experience revenue agent which are top exiners have focused on high income taxpayers that are not focused on lower income taxpayers i appreciate the opportunity. >> i welcome the opportunity because think most americans,

nobody lov to pay taxes but most americans feel they don't mind paying their fair share, everybody is paying their fair share but will sit down at a later date and go through the atistics with you. wealthy amecans are not being scrutinized and income americans are it's no wonder they fee frustrated that they are being taeted for the americans of a different experience altogether but will sitown at a future date because i will take you up on that because i absolutely know for fact that it is true. >> i'm not looking to debate the issue. >> another issue that's important, reports that suggest the irs backlogs may prevent some americans from advanced payment of the tax credit for the 2021 marketplace health coverage.

that delay could be them to become uninsured. i want to know if the irs can you will commit to working with others in the administration to fix the issue during an ongoing pandemic. unless you disagree, i think it is important for people to have their healthcare coverage during a pandemic. could you provide an update in writing on the bk wall as well as an assessment of how many peop eligible are pentially impacted? to have a commitment on that? >> yes, can i give a brief comment? individual attests to the as o january 1, the cms comes bk in march to reconcile that so there is no involvement orack of involvement that wou preclude anyone in this country from

receiving insurance. we can certainly go through that either later today or nt week or at your convenience and provide the information. i did read the same thing. >> i would appreciate your cooperation with that. i have no further questions. >> your time has expired and i am glad we agree this is a critical issue thathe has featured. we've seen numbers where the audits happening and over the years how they've changed. we have sid numbers they would verify and get to numrs of not only this committee but perhaps everybody should know. i want to thank you for bringing that issue.

the only the issue but you are very explicit was tt. the gentleman from pennsylvania, five minutes. >> thank you for having me. thank you so much for being here today. i want to mention a piece of legislation, personal health investment today, it would allow for the reimbursement of physical activity using pretax dollars to allow folks to use the money and to do this, we propose an expansion, definition of medical expenses to include qualified physical activities like health club dues and shoe size classes for disease prevention. these expenses would go a long way toward helping to encourage people to engage in this exercise in a healthy lifestyle. one other thing i'd like to

mention, this was a big day for all of us. the implementation act, it was a great day for us. one of the things looking back at the time spent with mr. lewis, requires long-term communication by the agency, the challenges you're facing, is there anything you need from congress to help out with that? >> funding. >> the act passed with no funding attached to it. >> so we ask you to do it with no money to do it. my kids tell me that all the time, to. i want to bring up the audit rate thing because somehow, we get rolled around and if you say it long enough and loud enough, some people listen to it and say the must be true to it or they wouldn't keep saying it but i want to go over this because ms. sanchez brought up a good heart,

when it comes to the tax credit, the fact that somehow we are going after these folks at a much higher rate than we would people that are higher income so to reiterate what you said, back in october, taxpayers with incomes over $10 million a year, 8.16%. for taxpayers with an income over $5 million, the audit rate is around 4%. for taxpayers with an income between one -- $4 million, the audit rate is around 3%. 1.129%. i have a degree in math but i do have the abili to look at the numbers and if anybody can tell me that somehow ripients are being audited more than anybody else, the figes don't lie. it's not magic, it is math. ihink we can clear this up. the truth is, it doesn't exist.

>> yes. the chairman asked about the numbers as well. the numbers are publied annually in our databook. the last published de of augu 2019, which we will me available to every member of your subcommittee. 2020 databook, sometime in marc april next year. individuals over 10 milli is 8.16%. individuals five to 10 million 4.39%. one to 5 million is 2.39% and the itc is 1.1%. i'd like to indicatehat there is no focus on ler income taxpayers and no focus on internal revenue servicen any systems in respect to the individuals with any of these taxpayer groups but people incate their focus on lower income individuals whoever is

in that population in the selection pcess that we don't look to the characteristics than what it should be in a return in an audit selection but annually in the last fiscal 19 in the itc world, about 25 million people fundin $63 billion and there was a 25% improper payment re which means internal revenue service pay for fiscal 19, the group we were unable to very, they were entitled to it. i agree with every member on this committee that this is important money for important people. it is a subsidy my personal belief is getting to the right people, a subsidy characteriz the internal revenue code given the response ability to the tax administrator on some things that are complex code itself for the itc nee t be oppressed by

congress to the appropriate -- >> i appreciate that. this committee is responsible for oversight and what we are talking about his hard earned dollars of american taxpayers. anybody with a 25% improper payment rate, nobody would run a private business like that if things were just okay. i agree and appreciate the time youut in. mr. chairman, i yelled back. >> we need to look at this, we already talked about this, i think. the percentages, i think it is important to look into. with only concentrated on the one aspect. we have concentrated on the fact that there is nothing wrong with that, that is for sure. a force of lawyers, which other

people do not have. this is not your fault or problem. the fact is, we have two syste systems, people who have boys and those who don't. if you want to challenge and you want your lawyers to get through loopholes and you have no lawyers, you have no choice either. i think all parties are here and we need to take a look at this because people feel they are being ripped off and if that is not true, we have to clarify it. please go to mr. shirazi. >> thank you, mr. chairman. thank you for being here today. good to have you testified before this committee. we are happy to have you here. you're in a tough spot. the irs is appointing back as it

is and you lost so many resources as an agency since 2010. i know you are a dedicated professional, you have a great background and you're committed public servant and you're in a tough spot and then you have the issue with the president, which i hope the treasury secretary doesn't direct you to do which i would hope future treasury secretary would have to go through this litigation because we have to demonstrate the power of this committee reviewing the issue of auditing the irs's regulations that say you must bought it, the president, vice president and review what this was done. you are in a tough position, you agree the irs had 17,000 employee cuts since 2010. you agree with that?

>> it was in the statistics. >> staff reductions are 22% overall. >> correct. >> revenue agents are down by 35% since 2010 and as a result the audits that have taken place are down 45% since 2010. >> i hesitate to say this because the audits are down but we do have technological advances. >> does not make up for the drop in staffing. >> we need to improve the technology at the irs, we need to send $3 billion to upgrade the technology of the irs. >> significantly more. >> how much do we need to spend? >> if we want -- >> we want to be the best we can be. >> the american people deserve, 6-$7 billion.

spending 10 to $12 billion a year. >> we need 6 or $7 billion. >> how much goes to fixing the old system versus putting in new systems? is it 50/50? >> at least the third. >> existing systems? >> we spend billions of dollars for maintenance. >> just for tape and bubblegum to hold everything together. we need to upgrade, modernize the irs with better technology to do that. correct? >> i agree. >> and more employees for the irs and money to do that, right? >> and to train our employees. >> and we need money to do at. and the money we invest in getting better employees will make more money bringing more money and from improving upon the tax cuts. is that correct? >> the ratio, everybody before me said the same thing, between $5 and $7 return. >> for every dollar we get in we get $5 or $7.

>> that doesn't take into account the deterrent effect in the enforcement arena which is significant. >> one of the things we are concerned about his right now corporations have $1 billion in assets or they breanna billion dollars a year in revenue. $1 billion in assets. there auditsre down 51% since 2010. is that correct? >> i don't have it stastics but i would not be surprised. >> strike that. for people to make1 million in assets or more there audits are down 61% since 2010. >> i think that is an income number. >> there audits are down 61% since 2010. >> down across the board. i will go with you on the 61%. >> bottom line is you need more money for technology upgrading. more money for employees. if you had more or better technology you could do a better job auditing all different types of people

especially tse with the most assets and the most money and bring in more money, 5-7 times more. >> we would also provide better service for every american. >> i yield back. >> the chair recognizes for five minutes the gentlady from california. thank you for being here. >> i'm grateful the irs closed its operations to protect its own workforce during the initial weeks of the pandemic and recognize it created a backlog of mail the irs is still working through but i'm disturbed the irs is continuing to issue libby and lien notice was ball profiting the backlog of males, taxpayers and businesses who have filed on time are being penalized because the irs has not processed their filings. i request unanimous consent to submit a letter for the record

to commissioner rettig from the american institute of certified public accountants dated november 5th dealing some common sense options the irs can implement to alleviate the financial difficulties for these tens of thousands of taxpayers. i understand the irs has not established an expedited phone service to dispute the lean and lovely notices being sent to taxpayers despite the backlog. you have a current estimate of how large the mail backlog is and also provide some rationale for not setting up such a process to date and whether we can have such a process. >> i did go through the mail backlog figures. we have an aggregate of the million pieces of mail backlog, 1 million on tax returns which is not unusual for us. as to the aicpa letter, as the

aicpa letter, 36 years in the outside, i'm in touch with thousands of practitioners in the outside as well as others and what they were asking for was for us to go beyond reasonable cause for individuals with a comment saying failure to pay, failure to estimate penalties you get an automatic payment and one of the payments was somebody has one of those, they don't get a second one but they default to reasonable cause. we have procedures in place, the individuals in the internal revenue service were not for employees who looked at this but more than 10 people who came on board from private practice, similar experience looks at this as well and were not willing to provide an open forum for people, professionals who might not be addressing their responsibilities. we took a hard look at that. >> commissioner.

they actually -- the understand your objection to gentle blanket kind of approval but they are talking about expedited phone service for tax professionals to at least make the case. >> we do have a practitioner priority line that is staffed. i will go back -- i have personal friends -- >> if you could look at that. >> the conversations don't happen in isolation. >> we talked quite a bit about tighter annual budgets entire freezes and the decreased workforce that is able to conduct audits and i believe congress has to provide irs the resources it needs to effectively and fairly enforce our tax code against taxonomies and fraudsters, the highest income individuals who are

avoiding taxes altogether and it is estimated if there was proper funding the irs could bring in $1.3 trillion by 2030. you have had recent calls, are there parts of the budget that should be prioritized for mandatory multi-year spending and if so what should they be? should enforcement be a priority? >> enforcement is a component of taxpayer service, taxpayers who are compliant need to know taxpayers who are not are at risk so they go together, modernization, people look at it as having ability to provide better services, chat or online or this or that but enforcement is one of our core components and a visible enforcement effort is significant in terms of creating deterrence on the

outside so i view that we need to be in every neighborhood. we have had 15 priorities each of which cost a dollar to get off the ground and we have one dollar. >> what about the issue of the multi-year spending? >> for modernizations much as anything else and what it does. our it parts of the house, they gear up late in the yearnd we can't actually implement the number by the close of the year and have to deal with the funding and we started over again next year and over the year aer. very difficult for us. that why the multi-year component so we can plan accordingly and acquire product accordingly. having to do it annually is not the way it suld be done. >> i still hope it would be enforcement. i yield back. i am an enforcement guy,

ma'am. >> thank y, mister chairman. i wanto thank the ranking member and commissioner ddick for being here today. apeciate taking time out of your busy schedule to address and discuss irs forts. you and your staff at all the irs employees, how the agency is handling the coronavirus pandemic is a true testament of the irs that's dedicati to delivering quick, meaningful guidance to taxpayers. wiin a matter of weeks after passage of the cares active the irs was nding economic impact paymentso taxpayers and this supported many of my constituents and people across

the country, the most challenging month they face in the country face. this money went to car payments and other necessities. moving forward, those who did not receive an economic impact payment had the opportunity to claim credit for the 2020 filing sson. many of my constituents are interested in claiming credit next year. can you provide any details on the press for claiming the recovery rebe credit and checking a box? >> there is a schedule worksheet that will be iluded withhe 20/20 return providing individuals to not oy claim the credit but if they receive the amount of credit they disagree with they can put the worksheet together to get th additional credit they believe they are entitled to. we would check that but it would be part of the retn.

>> t worksheet you referenced, is that something that has been distributed already? >> i would have to get back to you on that. i'm not sure it is public yet but that is certainly the concept. >> changing topics i would like to discuss wh you, i know it has been mentioned previousl the irs modernization efforts. ny taxpayers face challenges interacting with the irs due to the taxper assistance center and staff and long wait mes with carlson to this. furtr complicating the situation is the inabilityo process paper while service nters were closed. there was $2 for fundi for our 2 modernization to help address these challenges. how important is that congress make that investment in modernization, and prevent our constituts from having to pay similar challenges in th future?

>> thafigure was carefully determined and would be game changer for every american from the perspective of vipand specifically appropriated for it and technogy and would literally be a game changer and assure every american that we arable to provide services including if we get another round of vips or similar so the significance of that cannot be understated. >> appreciate it, thanks for your service, those are all my questions. >> thank the gentleman from illinois. the chair now recognizes for 5 minutes the gentle lady from wisconsin. >> thank you, commissioner for your character today and i want to join the rest of my

colleagues in thanking hard-working people at the irs for all that they do. i want to commend them on standing up to outstanding intervention with the economic impact payments and particularly putting together the portal that i will discuss in a little bit in a minute, to identify those taxpayers who were nonfiling taxpayers that really needed to address their extreme poverty during this time. many of my colleagues or most of my colleagues on both sides of the aisle have left me a clear path to ask the next question. it seems what was incumbent in the questions whether them chairman pascal or not, seem to deal with backlogs, people who haven't found economic impact payments so far, the disparity between those people who are audited and those who are not,

you did talk about $66 billion burden that earned income taxpayers provide on an annual basis but i want to note the tax gap is something like $4046 billion a month so it's really worthy of that so my question is real simple. say for exame you are reacquainted or continue your appointment i guess as commissioner of the irs, what wod you provide in the way of a budget mission to increase irs fundinto cover these clear gaps that we have been enforcement and training as you mentioned what would be our increased budget request? >> on the top end >> adjusted for inflation the

2010 budget would be $1.1 trillion, might not take into account hiring freeze from 2011-18,atchwork to get us to where we are, the streng of our agency to the extent we rn and continue to earn ust and respect is attributable to r employees at frontline specically as well as 00 employees in wage and investment departments. >> they are just awesome but you need more money as you indicated in the record. i wanted to talk about the problem of this pandemic which i co-authored a letter with

congressman raskin and most members signed onto it talking about the impact of covid-19 and domestic violence. we have seen a huge uptick in domestic violence where staying at home has not been safer for people. one of the impact has been as you know one of the impacts has been that people have not gotten, victims have not gotten a payments and there has been a ruling that in fact you cannot make repcement payments because of us 31 but we have had some advice from nancy olsowho used to be a sector advocate who has said in consultationith the gao that you really do have the ability to book a categoryumber for payment that provides these desperately needed payments along with affidavits or poce reports or something and what do you plan to do in 2021 as

this continues to be a problem and i would yield to you. >> first our request would be legislation such as this the irs be part of it to help in terms of what we can administer. >> the care act is responsible for who is an eligible american. in context of domestic violence ose payments were properly made in accordance with the income tax returns and if it was a direct deposit or a check they were properly made with respect to the cares act. >> i'm aware of that but the gasaid you had the flexibility that you could have - >> the council has specifilly -- >> how would you do it? >> with victims of domtic violence, employees and family members victims of domestic violence, we have discretion or believe we have discretion to do so would do so. we cannot do something contrary to legal and statutory

authorit that is why on a go forward if there is another round with respect to econoc impact payments we appreciate the opportunity to be at the table to indice not only with respect to that but a couple of other provisions, how we might administer bter for some people who were left in between or underserved at the end of the day but ninalson is not council of the united states government. counsel for the united ates government is chief counsel and to permit of justice, treasury and whatt. if i felthat i could with the stroke of a pen make payments toeople i would do so, but the irs, i am a tax administrator the irs is required to follow statutory law. we would like to work with you. >> my time is expired but i ask unanimous consent to put nancy

olson's analysis in the record, and without objection serve. >> without objection. >> thank you, mister chairman and with that i would yield back. >> the chair now recognizes the gentleman from pennsylvania ster boyle. >> thank you. i appreciate you having this hearing. one of the benefits of hearings like this is not just the opportunity for members of congress to exercise oversight and take testimony from the

witness but also for us to be able to listen to the experiences of other colleagues. i've been on this hearing since the beginning at 10:00 am and i've been struck by just how remarkably similar the experiences of constituents in other districts have been to my own specifically the first reblican member to speak said almost verbatim what i was going to rd in terms of the 2019 tax refund backlog. i appreciate you being here and when you initially reached out to me way back pretty covid-19 to sit down and talk how the irs can work better and more efficiently for all american taxpayers, i want to reitera my constituents in philadelia, pennsylvania are having the same issues wh 2019 tax returns. i've been office six years and this was by far the mo irs constituent service issues

we have got and the backlog at the kansas city site as you know from my constituents when you have an sue, the kansas city missouri side of thers that processes them, our ability as a congressional office on the front lines dealinwith constituents has been impacted by the fact that it has been so difficult to get information from them. i would also point out the constructi criticism, the way it haseen set up in irs with a congressional liaison office, they are able to get us the information we need to relate to our constituents and that, changing thais important because we are the ones who are on the front line dealing with ople. i have four different district ofces in my district because we prioritize constuent service. a lot of our constuents don't

-- they n't necessarily even look at voting recd or policy, it has been nuts and bolts of constituent service that matterso when i have somee waiting on a tax refund far larger than the t and haven't been able to get it or even get information and the taxpayer advocate office is so swped that they can't hear anything. it is enormouslyrustrating and the folks in my office who also live in in and arou philadelphia have been doing a next on job attempting to service them. i specifically recognize jim kennedin my office who has developed real expertise on these issues but it is enormoly frustrating so i would pass along that as

reiterating or underscoring what mcolleagues talks about because we are having e same experience and if we could look forward to the system of chronic -- cgressional liaison office it would be a better experience for our constituen. moving on let me speak about the eips. my constituents having a similar experienceo issues raised by my colleague susan, simple things like getting any ip for $6.66 itead of $50 and having to wait 9 months for that to be corrected. these are two areas that need to be addressed. they all point to the third point i want to recognize. i am sorry i can't see the timer so forgive me. looks like i have a minute left so i will conclude with this. this is something perhaps we can work on on a bipartisan basis. the 35% reduction since 2010 is

clearly pa of the problem. if we can work on a bipartisan basis to restore the irs workforce it would in the end of the day save mo taxpayer money than it costs. i covered three different areas but if there is anything you want to address, would certainly welcome. >> invite me back for another one on one. i want to look at a pitch for people to file electronically. during the pandemic - >> sorry to interrupt. a lot of constituents who were surfacing don't have the ability to do it online. that's part of the problem. >> i recall our meeting before. for the others there are

resources here andhere. >> could you by chance put something together for mister boyle? i want to give you the opportunity to respond as you write something to him in the next week or so. >> i have met with him before and we will meet again. >> is that okay with you, mister boyle? >> thank you, i appreciate that, chairman. >> thank you. before i call on commissioner onestrip it just occurred to me a couple things looking at some notes here. i think using percentages, mister commissioner, when we talk about audits is very misleading. i will tell you why i think. if you look at real numbers taxpayers with incomes of over

$10 million, 10 million all, there are 1500 audits and eit taxpayers which many of the members brought up today, 380,000, one might say there are not as many multimillionaires as there are people on eit but we are focusing on eit taxpayers, we are talking about individual taxpayers and the grief they have to go through. i don't think percentages are the whole answ. that is all i would say to that. >> i agree with you. the questions we've been dealing with his audits have lower incomes that a disproportionate as a class to the audits at higher incomes. we are not out of sync on this.

>> what do we need? >>e need the resources to do it better. the be itc should not be an issue for any american. we need to change that statute. we have been working this. diane grant s been working this since 1975. we have ideas but it takes congressional tion to change it so we are not collectively in this situation and we are not burdening lower income taxpayers who need and deserve these funds. >> thank you, mister commissioner. i recognize the gentleman from ohio. good to see you here. >> thank you foreing here. i want to echo the sentiments of my staff. behalf of my staff taking on a lot of issues since the pandemic, as you all have as

well, appreciate the comment in your testimony that you believe the irs has to operate from the taxpayers perspective and that is important because as members of congress that is whwe end of taking the view of. two months ago one of my constituents reached out and asked for guidance regarding the use of dependent care, flexible spending account and she had been notified she uldn't be able to use that to pay for virtual preschool and unfortunately for many americans around the country, in person school is not being given to them as an option right now so they face a situation, wle i hope all schools and not just some schools can safely and smartly reopenhis is an issue we face right now it is a burden placed on a l of families so as you know many families save for their children's education by putting funds into these accounts. i sent a letter to the irs

requesting what i think is reasonable accommodation to allow the dcfs a account dollars to cover the costs asciated with virtual dependent care services so my first question is does the irs, are you able to issue guidance on allowable uses for these accounts? >> i do recall your letter and my recollection is to treasury and further recollections of the treasury responded to your letter. this would be a policy call. the policy question about where to open that up to would be a treasury decision. irs did issue an announcement. i am speculating, 3, 4, 5, 6 months ago indicating it to be a problem for those who are not using funds on the back end with the ability to actually start making those withholdings

and having said that, we are quick to say we issued an announcement with the assumption everybody reads our announcements and i understand that is not the case so we did something but i'm not saying it as it solved the problem. >> they can temporarily use these dollars? >> the announcement was they should stop contributing during the pandemic if they are doing the homeschooling, not contributing to the account, treasury responded to you i believe and several others to take it under consideration and i would suggest interactions with treasury. i don't have that. >> we are doing that as well. i just was asking if you could issue guidance on that. >> if the policy decision -- >> if the policy decision was made i would hope that we could promptly issue that guidance. >> and not the other way around i guess.

guidance suggestions -- >> the suggestion has been made and keep in mind the people who review these things are people with families. >> i get it, i know you do. one other question one of my constituents who is a cpa reached out raising concerns about penalties that would be leveled on tax preparers around the country for failing to meet the deadline to submit returns due to delays beyond their control, what advice do you give? >> i personally know thousands if not thousands and thousands of cpas, enrolled agents and others, probably more than 1000 tax lawyers that have immediate family members in the practice. they have a first time abatement and reasonable cause and under the guidance of the

pandemic reasonable cause should be looked at liberally by everybody at the internal revenue service. >> that is helpful, i yield back. >> a pleasure, thank you for being here today. the chair now recognizes for five minutes my good friend the gentleman from illinois mister davis. >> tha you, mister chairman for giving me the opportity to participate though i amot a member of this subcommittee. let me tha you for your service and for being here with us and i also want to give a wo of commendation to the taxpayer advocatesn the regional office in chicago who have been steadfast an very helpful to my office in this period.

i remember the unlawful denial of vips om incarcerated individuals as well as their families during a historic economic crisis has illuminated further the pandemic's disproportionate effect on communities color and unequivocally harmed african americans who are vastly overrepresented in the pson population. when ordered b the courts to stop denying eips to the incarcerated the internal revenue service insisted the incarcerated complete a complicated form knowing they lack aess to the technology to use -- given the internal revenue service has prisoner files to validate incarcerat staffers failure to rely on a simpler form comparable to that seems like an intentional

effort to limit claims by the incarcerated which disproportionately harms african-americans. will you meet with the leadership of the congressional black caucus to discuss our concerns about the disparate racial ilications of recent internal revenue decisions? >> i would be honoreto meet with you and others. i t with john lewis on 3 occasions, highlightedy personal and prossional career and i realized the context in which you made it but we are very proud of our diverse workforce and our respect for a people in this country and we reflect that th people we serve which includes

incarcerated pple i have a workforce of 80,000 people, absolute guarantee we have thousandof family members who are incarcerated and entitled to the vips. we are no different than any other system in the united states but i would be honored to meet with you and others. >> thank you very much and we look forrd to that. almost eight months after the cares act became law nancy -- when are you going to pay the spouses of the incarcerated? >> it is my understanding that all of the payments associated with prisoner related issues have gone out but we are getting information through our portal currently, when that information comes in within a week or so those payments go out. the intention was all prisoner related payments -- >> thank you. >> end of november. >> my time is going to run out so we look forward to a review

of that information. mister scott, a colleague of mine from virginia had a constituent who is a security beneficiary who contacted the internal revenue service because he did not receive any ip. the irs told him he was deceased. representative scott contacted this subcommittee for help and although the irs corrected his record, it refused to process his eip this year because he had already been considered the eip when he was listed as deceased, making a gentleman wait until next year could he be paid immediately? >> it is maintained by the bureau of physical services, we get the information from them and the way of the issue was as rapid as possible a marker was

put on an account. to undo one we would have to undo all of them. we've not been able to work through this but we are definitely aware of this issue. >> thank you very much and could i ask, i have a constituent, it has taken more than two month to trace a check to reissue a payment, the reason this has taken so long? >> i would like to have the person's information. there could be a lot of reasons, there could be fraud filters and whatnot. we could track relatively quickly to find out what the issue is that held it up. it could be something unknown to the individual as well as internal revenue service. i will have somebody reach out to your office this afternoon. i don't know if you have power of attorney that we can get that information which would mean if you don't we cannot speak to you. we could speak to the rson.

>> thank you, appreciate your responses. i ask unanimous consent to have two letters submitted for the record from the congressional black caucus. >> mister davis, you always stand for the voiceless and the most vulnerable and i think that is the main question today, the reduced perceptions that there are two tax systems in reality. don't think that is political. and now the chair recognizes for five minutes the gentleman from illinois, mister schneider. >> thank you for joining us

today. i want to say as others have said many of the issues we are hearing our issues i'm having in my district so before i ask questions i will commend you, we are seeing improvements in service but a lot of constituents who have yet to receive their economic impact statements like others we have been working for these constituents who have cases pending, the irs resolutions section so my request, constituents able to enroll in the aca or receive tax refunds, we continue to forward the details and other information your office requested. can you commit today that you and your staff will assure these cases as soon as possible

and to know how we can expedite that a give realistic time frames to our constituen? >> some of your comments, i uldn't actually hear your comments but i will mmit to having somebody on my behalf contact your office this afternoon. >> i would appreciate that can you hear me now? >> speak again. when i had my but not it seems i heard you. >> are you able to hear me? >> i can hear you now. >> a couple of issues related to taxes, benefit our communities, critical service provider, certification groups, because of that, taxpayers subsidize these organizations to provide tax-exempt status in the tax code however this comes with expected expectation these

organizations work to use their status but there are different scenarios, i ask similar questions of j russell george at a hearing in may. as far as annually contracting for millions of dollars in public services companies run by one of the nonprofit board members and inflates prices, such a finding, would you find such an entanglement troubling? please answer yes or no. >> i believe these questions are beyond hypothetical and might be related to the referral we received it. i would not want to speculate on any one matter. i find areas of noncompliance for all taxpayers which includes tax-exempt, nonprofits to be struggling and i can say that too.

>> i am not signaling out an organization specifically at e moment but the organization has a provider directing millions of dollars annually to that provider but they he a stake in the company. is tt a source of concern to you? >> they are a provider but they have something -- >> a nonprofit organization has a financial interest in a provider to the organization, a vendor and they are directing business to that vendor. i would argue that is a conflict of interest. is that a concern for you? >> i'm not going to speculate. i come back to the same thing particularly in the nonprofi tax-exempt world, not only coliance but appearance of impropriety is eally important because as you said

they are sported by taxpayer dollars. >> we would want our nonprofit organizations who are getting tax advantage status, to be held up to the highest level of ethics. conflict of interest, personal self-healing, issues that are restricted by nonprofits. is that correct? >> there's a whole host of provisions specific to nonprofits that are there for a reas and it is notust in the ordinary sense for taxable taxpayer, tax dollars interest in penalties, to use my term it is not a code te but the appearance is equally important because they have benefits that other taxpayers do not. >> right. i am talking about the nra and i know you can't reports on an investigation but the level of

concern related to the activities recorded are very disturbing and i hope the irs is taking all appropriate steps to protect not just taxpayers but donors to these organizations who are not making the nations to people's festyles. with tt i yield back. >> would like to thank our witnesses, mister commissioner, for joining us today, be advised murderers have two weeks to answer later in writing, those questions and your answers will be made part of the formal hearing record. mister commissioner, i believe that here too if conditions of

the meeting today, with your direction, kind of, but i want you to know to me this is n a political issue. this is as i said on february 19th, 2017, when i asked mister kevin brady who was athat time the chairman of theays and means committee, we ask these questions in a bipartisan manner so th we did not avoid it becoming a, quote, partisan issue. people out there watching in terms of fairness i did get into in which you did answer and respond respectfully, this is a bigger issue and i hope someday you will come before us

and talk about it. feel free to do it but i want you to know i'm not impugning your lack of response because you said you would not respond and thank you for being here today. i hope this begins a process of you coming in once in a while. >> we didn't refuse, we declined to speak about the topics you wanted to speak about which i cannot speak about. and indicated i would appear in november and i am here in november. i will come back and i will come back individually or to the committee. >> we will look as was we can discuss and not what or question your response but i would say this. it is a very big issue. it almost came up, mister schneider's question, who the

irs investigates and who the irs audits, this is pre-rhetoric, the irs investigated the irs commissioner and at the end of all the questioning, questioning of ten people all in some ways liberal war organizations, those people, their names were made public because 6013 deals with privacy as well. nothing was found after their names were made public and one

has to -- no apology ever given to these people. when people say keep politics out of it i returned to that issue all the time because those were the facts and i could tell you one thing. you know little abt me and i know little about you and i am not going to get off the issue rerdless whether i ask you questions or not. i appreciate sincerely you'r coming today and making yourself available and i am sure we are going to meet again. we are adjourned.

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c-span.org/coronavirus to follow the trends, with interactive maps and updates on dend anytime on c-span.org/coronavirus. >> american history tv on c-span 3, the people and events that tell the american story. coming up today, 6:00 pm eastern on the civil war, discussion about opiate addiction among civil war veterans, with jonhan jones. at 8:00 pm lectures in history, baltimore county professor william blake on new deal politics and the role of public opinion onssues such as court packing and executive power. on sunday american history tv will mark the 4 hundredth anniversary in massachusetts starting at 4:00 pm on real

america. at 5:00 pm eastern a look at the virtuamayflower project which uses virtual reality to re-create e ships in plymouth harbor. a tour of a living history museum in front of massachusetts, ao the home of the mayflower 2, a full-scale reproduction of the original ship. exploring the american story, today on c-span 3. >> in a brief statement georgia governor brian camp did not explicitly say he would certify the presidential election results presented by the secretary of state but noted he is required to do so by state law. the governor noted some irregularities in the statewide audits and called for election reform. the deadline is 5:00 pm saturday.