and that commitment while testifying in front of the house ways and means subcommittee on oversight he also spoke about funding and staffing shortages and tax assistance for small businesses hurt by the pandemic.

>> good morning. and welcome it. i've >> good morning and o welcome i call too order the subcommittee on oversight take you for joining today. we are holding this hearing in a hybrid format ineg compliance with regulations for remote committee pursuing's pursuant to house resolution eight before we turn to today's topic i want to remind members of a few procedures to help you navigate the hybrid format. but first consistent with the regulations that committee will keep the microphones muted to limit background noise and membersal joining virtually are responsible for commuting themselves when they seek recognition or been recognized for five minutes committee staffmi will mute only of inadvertent background noise.e. second they must have the cameras on went on webex if you need tole step away and attend another proceeding please turn your cameras and

audio off rather than liking out of the platform finally we will distance of the practice of observing the role and instead go in order of seniority for questioning alternating between majority and minority beginning with members of the oversight committee. i thank you all for your continued patience as we navigate the procedures to continue serving our country togetherre in this great time of need and with that i will turn to the important topic of today's hearing with irs commissioner on the 2022 season. >> and ourselves liver might opening statements. welcome everybody as subcommittee on oversight meets today to review the 2022 tax return filing season and the overall operation of the irs, i would now like to welcome our witness irs

commissioner the chairman requested could not attend today and asked me to serve as chair this morning and he once a subcommittee to hold this hearing today because it is essential that we ensure the irs has the subpoena plus tax filing season and has submitted a statement for the record and without objection it is an internet into the record. thank you so much for appearing today we know this is a very busy time for you in the irs employees we are especially appreciative you can join us this morning and we are very grateful for the dedicated service of the irs. we are particularly interested in receiving an update on the ongoing taxis and including any recommendations that you

have to make the irs has more there will be an arm is challenges this filing season with an u unprecedented no tax returns each represent an individual or a family or a business desperately awaiting funds from last year we look forward to hearing from the commissioner on what the irs has done so far this year to address the backlog and what additional tools the irs need to congress. importantly we must assist constituents of the meeting minutes for much-needed refund including individuals with the rebate recovery credit retention credit i met recently with our local taxpayer advocate and it was

one of the highest reviewed events of the pandemic is just goes to show how many people are looking for information and relief during the filing season. not just credits ands refunds that my constituents has been denied economic injury disaster loan because irs has not corrected hishi business return from 2019. it also took months to post his returns from 2020. the irs has not corrected his business return. and this may not have happened at all had my office not intervened. now his business is in danger of closing because of the backlogin that keeps collected

returns from being posted so the fda can s see them. as a former employee or as a member of the elected state tax but i know the importance of tightly accessible service and assistance in ensuring the tax administration. we cannot be complacent with the level of service that only one out of ten taxpayers is able to reach irs customer eservice representative. recognize the irs receive an unprecedented number of phone calls last year. nearly 300 million. i would like to hear from the commissionere what lessons the irs learned in applying this filing season? that includes expanding the use of callback technology and i look forward to hear what

will be expanding the availability of that feature? further, the tax laws provide the irs administrative authorityin to address certain situations that developed during the filing season which may be unfair to taxpayers. has consistently advocated for tax penalty relief as a matter of fairness, as taxpayers continue to face covid related challenges and filing taxes. i look forward to hearing what administrative relief and actions are currently under consideration by the irs in response to taxpayer difficulties and the backlog. today's hearing is also an opportunity to learn how current funding levels are impacting irs staffing, most importantly taxpayers and tax administration, a decade of

underfunding by those who do not value who harm the irs and countless taxpayers. these impacts included tax gap of $1 trillion per year reliance on correspondence audits of low income taxpayers, the worst tell us in on —- telephone services in the history of the agency and antiquated technology thatow does not allow for the standing of returns of a secure e-mail contact and an agency preparedness for an hour the future. thanks to the bipartisan omnibus that the president signed into law this week, the irs has received an increase of funding of nearly 6 percent. that is in addition to funding from pandemic related

legislation for information technology. however we all know this is not enough which is why the house passed reconciliation bill including long-term sustained funding of $80 billion. i like forward to discussing how we can make this tax season successful and nine yield to the ranking member for his opening statement. >> thank you madame chair and also to the chairman for holding this hearing and thinking to the commissioner for being available. and before i begin i want to t say thank you to the tens of thousands of irslo employees that have worked very hard in overtime during the pandemic. we had many policy debates and concerns of management decisions that the irs. your work is important.ta

it's not easy. we sayay thank you. so the backlog crisis began with pandemic closures in march 2020 the impacted all20 of society. the irs was closed for months due to the virus. some delays would be expected. on electronically file tax returns were processed remotely paper piled up at the facilities with no one there to open them. i recognize during the pandemic congress assigned significant new responsibilities such as economic impact payments and advance child tax credit payments to millions of americans. there is i no doubt the pandemic created a significant challenge for the irs. just as it did for american families and businesses. the irs certainly has success

along the way. developer process for sending out economic impact payments to millions of americans with almost no notice in executing those payments so promptly. but not all actions have been successful during the pandemic. republican members of this committee have been sounding an alarm of the backlog crisis for over one year. and it truly is a crisis. >> when president biden took

office the backlog and customer service at the irs are already a crisis this information was that when president biden took office. he didn't propose a plan to fix the backlog customer service instead by hiring 87000 new agents to connect have to contact the first as part of the plan. the biden administration also wanted local banks to report details of nearly every american's bank account to the irs in a massive surveillance

effort. so for these bad ideas have been blocked from becoming law. but unfortunately we know the administration is still pursuing them. when it comes to the irs, the biden administration hasn't priorities misguided. the idea we were double the size of the irs by focusing on enforcement without first fixing the agency's ability to provide basic services to everyday americans is laughable. it wasn't long ago republicans and democrats came together to draft impasse taxpayer first bact the purpose of that bill is to reform the irs and to make it work better for taxpayers. to put taxpayers service at the heart of the agency's mission, the biden administration would undo the work to turn the agency into

an aggressive enforcement agency that is averse to taxpayers rather than one that serves taxpayers. so when it comes to a long-term vision of the irs, we need b to come together in a bipartisan way to fix the customer service problems and modernize irs technology that i've been on this committee for six years now and have consistently heard about the fact we are using computers built in the 1980s still using cobol program that only one person in the irs knows how to operate and to program and when that person retires or passes on, the irs is stuck. itit is absurd and has gone on 40 years with ancient technology and we cannot seem to get it modernized. we have throw money at this problem before. the problem to modernize technology, i don't believe we wouldld be facing the issues with the backlog that we have today.

we can do it. there members on both sides of the aisle that are dedicated to working on it. but first we need the irs's help. they need tofu tell us what needs to be done and they need to convince us that they can actually do it because we funded it before and it did not get done. so people have doubts whether it will be done if we throw money at it again. we needd a cost estimate of what needs to be done and how it will be done. let me transition back to the short-term. that's a long-term solution. let me go back to the short-term problems we are facing. just last week the irs and treasury put out the aggressive plan to and pandemic inventory backlog. that would be an aggressive plan. i'm sure it's possible that we

can completely do away with the backlog this year. it highlights several initiatives we have heard about previously combined with a few new initiatives. commissioner redding well i wish this would have been implemented one year ago, and happy to see the agency has put together a serious plan that matches the seriousness of the problem. i want to highlight a couple key points of how we got here. in january this year we see the irs was over $1 billion that it received in early 2021 at the same time arguing in needed additional funding to deal with the backlog. i urge the irs multiple times in january and february to address the backlog. it appears they may now be choosing to use those dollars to hire 5000 workers dedicated to working through the backlog this year.

after our calls for drastic action they said they will have search teams to address the backlog. i understand this involves temporarily moving employees from other parts of the agency over to submissions processing to help get to the backlog. that strikes me as a good idea given the scope of the problem and i would like to hear more from you how that process will work. i also noticed in your plan you are evaluating options for pursuing additional contractor assistance. like to hear more from you on that as well. finally have a number of items in the plan regarding communication with taxpayers. i want to know what you will do in the short-term journal taxpayers from contact to get the answers they need the inability to contact the agency be the ongoing problem. >> thank you for your

aggressive plan and have encourage your testimony. >> thank you mr. wright. without objection all members opening statements will be made part of the record. without objection i would like to enter a statement now we will turn to commissioner 2010 percent to discuss thiss very important issue. your statement is the part of the record in entirety. i would ask you summarize your testimony in five minutes. please keep an eye on the clock if you go over your time i will notify you with a tap of my gavel. commissioner, you may begin. >> thank you very much

chairwoman and ranking members andg members of the subcommittee. thank you for the opportunity to discuss the flaming season and irs operations. before i continue with my opening statement, i need to address something personal which is this may be my last time testifying inem front of this committee. my statutory term expires this year but every single time i have testified up on the hill i have had the extreme privilege of beingxt accompanied by the same person who is sitting behind me. he has been with the irs with a 50 years and if folks think a commissioner comes in a makes decisions i want you to know how much i value miss diane as a person, colleague and friend and attacks expert and irs experience expert. in many ways, diane epitomizes

the irs employee. she is our back. [applause] she's also extremely humble i will hearr about this on the way back. [laughter] but thank you for affording me the opportunity. we have truly spectacular employees. as you know the fiscal 21 gross revenue receipts were four.$1 trillion which represents 96 percent of gross revenue of the united states america a successful fully functioning irs is importanton to the continued success of the country. the government does not build bridges and things in a military context it is built with funds. 96 percent go through the irs. funding the irs appropriately is critical to the success of the country. the questions you will ask me today i am fully aware in large part you will hear me talk about funding shortfalls and many different parts of

the agency. i came on board almost four years ago and i've learned a lot about the irs. b and i might encourage you to invite me back when a no where the color of a commissioner for an additional discussion one-on-one or on a committee hearing. im representing an agency that i care deeply about and that's why i came to this agency. for the people of the irs, the people ofs the country, members of congress to make it better and is o to some of you a 36 years practice on the outside and could not be more proud of my term as commissioner. the irs, the employees have been at the forefront of every issue during the pandemic. and then to perform

spectacular the will delivering over one.$5 trillion during the pandemic and three rounds of economic impact payments and then and additional six or seven advance child tax credit payments totaling an additional $93 billion. this is for people who i sentar how much 2020 concerned about their health and safety and i am correct in saying we shut down the irs at the front and maybe even before any other federal agency fully aware march and april 2021 of our primary responsibilities as the people of the country to issue refundable credits which is the difference between food bank and food on the table or rent. we took that responsibility seriously. we had a to get back into

operation as quick as possible for processing centers to process those returns. you indicated electronically filed returns restless period were continuing for eligible taxpayers filing inaccurate return with direct deposit continues to. receive about 21 days. 17 million tax returns in paper. congress led us into changing and encouraging electronic filing scenario that we are currently for fiscal 22, about 97% electronically filed returns. as to how people continue to file returns electronically. accurate returns when i say

accurate i am talk about the advanced child tax credit because the returns that are not accurate fall out and need a manual and and manualing a process. the last we had season the reba context and 13.2 million returns for people who reported withthing to do their un insurance that filingation string season o unemployment compensation are already processi haveturns we 13 m unemployment comp and millions with respect to the earned income tax credit amend congress change the law. >> thank you so much i know there will be much more

content to be discussed. so at this time will open the hearing for questions without objection each member will be recognized for five minutes to question the witness. >> members are reminded. >> and in a sentence or two can you tell me when will the backlog be eliminated? before december? >> my term ends in november.

absolutely before december and with all due respect my minutes said i still had one minute four seconds. i was watching my clock. we had 800 members of the search team who have come onto accounts management and 700 coming into submissionub processing. as of today barring any unforeseen circumstances if the world stays as it is today, we will be healthy by the end of calendar year 22 and into the 23 filing season with normal inventory. >> thank you. that is very very encouraging to hear the backlog will be clear this year. commissioner i'm also pleased that congress has recognize the urgency to t address this historic backlog. to ensure that taxpayer

returns are processed ined a timely manner. and that provided the agency with direct hiring authority but i'm concerned not making the most of this opportunity in key roles and returns processing the gao report that in the last fiscal year not only didy the irs have a higher surge goals but they had the attrition rate of 17 percent more than double the a agency average talk about what the agency is doing to improve attrition with the effective next of the direct hiring search? >> for more than two years we've been requesting direct hiring authority because we compete with the private sector who can bring somebody on board between a six or eight month process and when you get into the accounts management those people have a lot of options they have

amazon and walmart they announced last night they are hiring 50000 people target is on boarding $50 an hour. we were at $14.57. i can only encourage people so much to come on board for the good ofat the country that those levels between 15 and $20 is whether or not they will have a lunch or dinner and what it will be. but we need to provide whatever. what we're doing is have tuition free embarrassment on this reimbursement child tax credits we work with the union and i word not even go out on a limb to say we both have regular conversations we have done that since we have been on board we have a great working relationship we want the employees to you be here

today and during 23 as well and employees are the strength of the agency. everything else is important but the employees are the pride and privilege are important. >> thank you also talking about audit fairness and as high as $1 trillion per year. recent report from syracuse university found in the last fiscal year the irs audited low income wage earners with less than $25000 of at a rate five times higher for anyone else. the taxpayers are less likely to have advice and have limited english proficiency so even a correspondence audit not only are they unfair but ineffective yielding little revenue how are they using this to address capacity to

audit complex returns of high earners to justify that the most vulnerable taxpayers are now bearing the brunt of tax enforcement just to keep overall audit number study. >> i will first address the report and also to draw your attention to the data book and then on page 344-2020 and table 17 and then that is absolutely 100 percent. that is false. and then to audit high income taxpayers more than anyf other category of the irs reflecting over $10 million of income to exceed 7 percent taxpayers up to the 25000 level of the

earned income tax level are automated at one.1 percent and then to file improper payment rates so we are forced to look at low income taxpayers what is that world? we must audit a percentage of those of the research folks can come up with the improper payment rate is. it is a 25 percent error rate in earned income credit $17 billion each year. the secretary signs off on that that with a high income if you drop between five and 10 million you will see four.2 percent rate. in between 1,200,000 it drops off considerably. and around a million we have

those in ofo w-2s and 1090 nines then you run into entrepreneurs. and with those complex tax returns to gave you one example and wee said before last year we received four.2 millionil partnership returns many of those are complex and multi- kid and have the foreign blockers those thatve come in to block certain effects.s. four.2 million i have 6500 experienced front-line agents they are the most technical people and they are entirely devoted to higher income taxpayer we are putting every effort on that. i do not believe that people ought to gain the system to hiring authorities are needed

you may have seen the irs chief counsel is looking at 200 experienced tax attorneys. i'm pleased to say we put out that announcement and we received multiples of that from those who are coming on board other areas of the irs. >> as you can imagine it is fairness that is the issue. but to issue those refunds immediately but 95 percent is a refundable credit doing up april 15. and those who tend to get lost in society. and now mr. rice for five

minutes. >> have to keep it very short on your answers. and to solvera the 25 percent fraud rate of the earned income tax rate. >> and a as a definition of the qualifying child and then to propose i will call out diane graham behind me working since 1975 putting me on my heels but the family credit and they merge all of them into something an agency can administer without getting into somebody's life. >> what about incomee verification?

period the earned income tax credit we don't try to verify the income but the qualifying child. >> i mentioned in my opening statement, i am glad irs has put out a play to resolve the backlog and i am pleasantly surprised. i would've thought it would have taken longer than that. i did take so long to come up with a plan? >> it didn't pick we've had this plan since we entered the pandemic. we know the pandemic playbook in july 2020, we had over 23 million pieces of unopened mail. we have the capability to open between one.5 million pieces per year, excuse me one week. we had to fight to the backlog. we did not have direct hiring authority so to onboard people

making $15 an hour was a six or eightav month process with a paper return. >> if you did not have direct hiring authority how did you do the hiring? who did that? >> quite frankly, i have not given a presentation without telling people we are hiring and i will meet them in the hallway to bring them down to the irs. every irs employee orrs ambassador is a recruiter. we actually have a referral payment r system. >> before you had payment authority who did your direct hiring for you quick. >> we only got that two days ago. >> before that. >> human capital office. >> how long did that take? they are a federal agency. how long before you had hiring authority? >> eight months is best

example we spent three months looking for 5000 people. >> eight months before how long will it take. >> between 45 days. >> thank you. and then for five years now and privately us today. and then the real long-term solutions is to modernize with information technology of the irs and i believe and then the irs has overcome because we feel we have funded this before. and so the hurdle of the irs is to convince us maybe all republicans that if we throw money at the problem it will

increase efficiency because actually pull it off they've done it before and it did not get pulled off. so can we work on establishing maybe with experts of a credible plan and how much it will cost give us some confidence it will actually occur. >> this is the agency that distributed one.$5 trillion. and i would also call your attention to the system modernization plan. and then that plan is reviewed by mckinsey and with those comments and consultation andnd as i have indicated with myself and the agency we welcome oversight.

that is an important part of tax administration and the irs operations. i think not only myself but those who follow in my place about them the opportunity to work with you. we take all ideas from all sources. at the end of the day california has an undeclared but i am an american and i'm very proud. help us brothers. >> i yield back. >> the chair recognizes representative for five minutes. >> thank you for your service and your willingness to comment in this very busy time the irs has just been with us. and those of my colleagues

will discuss the issues one that hits more closer to home i just want to share with you in 2004, i decided to move to the virgin islands. and born and raised in new enyork city. part of the reason i was able to move is the virgin islands has a specific tax incentive program to bring businesses and industries to the territory that has helped us to reverse the brain drain. so many people in the age bracket and professional experiences and with expertise and law and accounting. and so unfortunately there are several individuals who treasury and congress both

from the tax incentive program so congress lifted and changes were made. i believe there was overcorrection that was done. and then to have discussions but that is a long time since the american jobs act was made if i lived in the virgin islands i could only be for tax purposes if i lived there 183 days. everywhere else is 122. if i moved to connecticut i am considered a resident after 122 days but in the virgin islands, that creates a higher bar which also bars individuals who can support

our economy to be able to reside there nobody in this global economy lives anywhere it for 183 days except during the pandemic when we were all forced to be at home with her husbands and wives and children. so is the irs looking at this? >> i have familiar with the virgin island residency issues also california california is 183 days as a presumption. and then with that three-year rolling average. and with that tax administrator. treasury does policy. >> do you talk to people at

treasury? >> i have. have t you? >> i thank you do because you are the implementer of this and you trigger whether there will be auditsng of individuals. is not a laughing matter we have lost a lot of economic development and a loss of the tax base because of this rule. >> i am very familiar and i have offered to sit with you after this hearing, can make afternoon available and cancel meetings to bring in our people. but we don't influence treasury policy. that is exclusive partt of treasury. we are attacks administrative agency that follows the law. non- commissioner help because i can make comments as a non- commissioner i cannot make those as a a commissioner. you think everybody should be treated fairly and at the core

of any residency issue is a bona fide of the residency. we are similar situations between like the chairwoman are familiar those who argue mindfully with the residency issue and more than willing to sitt with you to give you my 36 your private life but the approach ultimately has to be treasury. >> i understand who has authority over and i would post you that you do have more influence than you think. thank you very much i'll take up on the offer. >> i yield back. >> i have my cell phone. . >> that's chair recognizes

mr. murphy. >> i thank you for coming out today. it's obvious there is a herculean effort to get a handle over the pandemic. and as those who have handcuffed not only with the american people in dealing with this. the irs obviously is a point of greatf stress. and i would just ask if you questions because of the difficulty that we have now do you ever use an outside agency and everybody asks for money does anybody ever come into give the irs lesson and efficiency to create do more with what you have? >> treasury and the irs have contacts with quite a few consultants who do exactly

that. and those to encourage others to participate with us. that the high and tech companies can do better contributing. we have a lot ofre different abilities. i came on boardhi to make things better but that posture is raised in a country but it's every americans duty quite frankly to support the agency that is accountable of gross revenue. >> without a doubt. so less government is better this is the perfect example we don't need more and more government because of the bureaucracy and inefficiency. >> with that taxpayer filings these are money paid to the

government but have not been refunded. do you have an estimate how o much the united states government owes american people because of filings that have not been dealt with? >> i do not. we need to figure out the inventories are down significantly. most of you who participate every friday 2:00 o'clock p.m. >> and those filings that have not been done the average filing is how much? >> currently it is around 3400. >> they are not all refund return. >> so there's hundreds of millions of dollars owed to the american tax payers in the government coffers that are owed to those people. so the majority of those with the inability to reconcile the economic impact payment a change in the law for the

e-itc we have to manually look at more than 30 million returns with 5000 people to do that but in terms of technology what we've been doing during the pandemic there are many. i willt give you one. but six took a position to automate the process and through february 284.2 million of ten.3 million that fell out and that is operating at a very fast pace. with those services that we are trending to the point of the chairwoman and the r ranking member we are trending in a really good direction. >> what are back in person

?orking >> like the rest of the world, we have a blend between telework. >> what percentage? >> people who are required to be back in the office are all back. the processing period were back june 2020. socially distance, multiple shifts, mandatory overtime as well as voluntary overtime throughout the workforce and accounts management and submission processing. >> i do know this is a difficult job. i appreciate what you are doing. but we can do a lot better. the irs had to pay out a tremendous amount of money and interest because of the delays of processing. without a doubt that is money that never should've been spent by the. american taxpayer. i appreciate the work that you do and i hope hopefully your replacement will come into be even more efficient and a

better steward of your taxpayer dollars. il back. >> . >> thank you for your testimony this morning and you responded favorably to the chair and myself and the senators through that submission process and just three irs facilities across the country. we areha all familiar with the national taxpayer advocate that is the irs kryptonite and also irs employees are working hard. [inaudible] [inaudible] >> your audio iss cutting out.

>> thank you. >> and then with the dedicated teams so many that i believe that we face today of the previous budget decisionsvi designed to —- deliberately to be satisfied. and then eventually replace it with another system. staffing went down 17 percent but those returns went up by 19 percent.

but then the happiness with the irs. and the colleagues have come up with a plan to rescue america. [inaudible] >> your sound is off. >> so the question is if your budget was cap by 50 percent by some of the republican colleagues what impact would that have on your ability to answer calls are get refunds? >> if the irs budget was cut by 50% you might be better off and

save more money by shutting it down completely. you know, we account for 96% the gross revenue in the united states of america but how are you going to find what we need to fund? and what every american deserves. efficiency yes. but cutting our budget is not the right answer. >> perhaps shutting it down is exactly those who make this proposal have in mind. let me ask you also for. >> by the way sir i am not proposing to shut it down. i'm just responding to the question be. >> i understand. some people would like to infect the budget decisions over the last decade have been designed to shut it down slowly. now abruptly. let me ask you by your comments earlier about the tax gap. you have estimated the difference between taxes owed in taxes actually paid, i believe were an astounding trillion dollars for a year. another estimate is 70% of that

gap is with the top 1%. what resources do you need in order to close that tax gap? >> we need a visible, robust, enforcement mechanism we are down 17000 enforcement personnel. that does not mean everybody on the street. it means strategic comment means experience people who know -- you cannot complain we conduct audits but you complain if we conduct audits that go on too long or in certain arenas where we should be moving on. but we do not have the ability to do what we need to do but i continue today to stand by the trillion dollars that we are about to issue our tax gap for the period that was 2011 -- 13 going to do 14 -- 16. going to see them track i'd like to draw your attention because i assume is going to be a lot of impressed you are going to cs

projectile we think the tax gap is in 2019 bear but no last year there is over $14 trillion in transactions in virtual currency with the market gap over $2 trillion. somewhere between 30 and 43% of that market is u.s. people. some u.s. reporting and they need to report. >> a gentleman's time has expired. the chair now recognizes mr. evans for five minutes but. >> thank you madam chair. recently enacted legislation that would increase the irs funding on nearly 6%. i understand this is nearly not enough to reverse a more a decade of severe underfunding. and i recognize the irs needs more resources to updated these antiquated technologies. still commissioner, how do they

plan to use the increase in fy 22 funding to improve service delivery via timely response to our constituent hair particularly those who do not file a tax return but who have earned child tax credit? >> note it is 675 million increased over enacted 21. it's more than 500 million or less what treasury and omb requested. and of that 600 million over 300 million cost-of-living adjustments if you net that it's about 375 million-dollar adjustment for an agency that gets called upon time after time after time for new responsibility and performs our people perform art people are spectacular in terms of earned income tax credits child tax credit and numerous others, we need to educate people we need to help people got it right. i am incredibly proud during my

term i don't take credit for but the public school kid from l.a. i open some eyes indoors about certain parts of the community. for the first time in the history of the irs i am number 49 as commissioner of form 1040 is in a language other than english. it is in spanish i will accelerate through the language is pretty have noticed last week he also launched spanish briella for our returns. i will call out also last year we had over 2 billion hits on irs.gov. more than 98 million were on our non- english speaking pages. we are in the communities in person. we are providing services we have a whole array of taxpayer services that are not just phones its online comments are taxpayer systems center were the first things i would encourage funding for, from congress is to let us staff up our 3258 taxpayer assistance centers by that is our front line retail if you will operation. we have 39 unstaffed we pull

people in similarly taxpayer advocate service they got a little bump this year. that is the safety net for many taxpayers on the outside. so to have them have a caseload that three or four times a normal almost impossible for any individual to do but they give their best pretty also note we launch this year taxpayer experienced office which is to operate and look and get comments and questions of the eyes of the taxpayer if we can add one thing we routinely hold hear me interactions with her front line employees whether it's on the phone or in the tax basis what are you hearing in terms of filing in terms of this on this? you will see that's when ucs issue alerts, announcements, letters, reach out to congress so we can work with your local offices and whatnot. we also interact with the transmitters because they run almost eight mirrored operation to us during filing season. if you want enter an electronic transmitter that is the person attend a call.

we share information with them as well. >> commissioner, when constituents cannot reach the irs they cannot get help from the taxpayer advocate service they contact their member of congress. the response to that aspect? >> absolutely. the pandemic has been very difficult for all of you, for your folks on the front lines and it has been difficult for us as well. i have almost never interacted with a member of congress 535 plus who does not have my personal cell phone, who does not have the personal cell phone number deputy commissioner for operations support. we are available, taxpayer advocate service is available. our legislative affairs are eligible but i'll hold a one-on-one conversation with you or without you with your staff bringing ken korb and his or

taxpayer experience office and for constituents are having a difficulty wanting to know where their matter is, get us a waiver so we can talk to you. get is the taxpayers information. i have been on calls where it opens up their 70 kim corbin will go 14 are here, this 13 we are waiting we issued a response to them. the idea we talk about how many returns we have it's not like they are sitting in a closet somewhere. we have 4 million returns, paper returns to process. the rest of the inventory if you well as they have been kicked out for an error in the return for they been kicked out for matching, identity theft there's a whole host of reasons, keeping in mind we are the gate keeper for fraud. where the gatekeeper for cyber. get over 1.6 billion cyber attacks per year with recent world events you want us to be that gay paper. you want us to be ever vigilant and you absolutely must fund us to keep those gates closed for

the benefit of every american. we get hit it is emotional. : : :

2021 and many of the small businesses and nonprofits are still waiting on relief for the third, second and first quarter last year while processing delayed eight to ten months. when congress authorizes the program designated to be emergency relief receiving the advanced payment could mean life or death for small businesses and nonprofits in every single congressional district. with the processes to ensure that individuals could receive these direct payments during the pandemic, explain why the irs handles the processing like a normal piece of correspondence and that you do not have the procedure to prioritize the credits. >> we do have procedures in place but we do not have the ability to automate the systems.

that's one of the differences to automate in order to process it but i would encourage that we arrange a meeting or call with your staff and the folks who are there. >> i do not have your personal phone number by the way. make sure i get it. >> [inaudible] >> probably not my better move. >> can you commit to the committee that they play are opposed to the processing including creating a dedicated mailbox, phone line and updated the timelines on when to expect the refunds specifically for small businesses and nonprofits and attempting the credits? >> i come from a small business environment and my dad all taxpayers but small business

taxpayers. the challenges the pandemic presented to them previously and they have nowhere to turn to. >> but you know any time a business obeisance the door whether it is a trust, glassdoor they are taking a gamble by being in business. and the speculation that it was eliminated in 2021 within the infrastructure bill because members of congress did not think employers were taking advantage of the relief. congress should not have accurate, couldn't have the accurate information due to the processing delays. again, at your agency. can you tell many how many claims from the previous quarter amendment before 242021 and how many have been processed since? >> i don't have that with me but i could get that for you this afternoon. and i just want to be clear the

irs isn't the one that got rid of the tax credit. we follow the law. >> i know that and i think you and look forward to continuing to work with you and i also urge all my colleagues on the committee to cosponsor the bipartisan bill to reinstate the ert saver the first quarter. it's hr 6161 and it will deliver our promise to relief to the small businesses and nonprofits in the communities. thank you and i will yield back. the gentle ladies time has expired and the chair recognizes mr. horse fruit for five minutes. >> thank you madam chair and i appreciate the important and timely hearing of the commissioner. good to see you and all of your team members. congratulations on 50 years of service. i'm going to get right into it

because we have a number of priorities facing the american people, and on one of them is the issue of gas prices. they are simply too high and it's imperative that we identify solutions to bring them down. since president putin started his devastating war in ukraine, the price of gas has gone up 75 cents, but the price of oil is rising disproportionately to the cost of a barrel of oil. as gas prices soar in 2021, the largest companies made a combined $205 billion in record profits according to a new report. exxon mobil, the largest oil and gas company in the u.s. reported over $23 billion in profits in 2020 alone which is a 60% increase compared to 2019 profit

of 14 billion. this on top of the tax cut that they got under the trump tax proposals and three oil companies actually paid an effective federal tax rate of zero. at the same time, many of the big oil companies are not paying their fair share of taxes, as i said and there are many not paying any at all and they are not doing anything to pass the profits on to consumers at a time when the american people need it the most. this is simply not fair and it's time that it be addressed. so, what steps is and can the irs take to provide relief to the american people as it pertains to accountability for these big oil companies and the price of gas at the pumps. >> we will do all we can for every american throughout and

that will continue for the employees. we are not a brick and mortar organization. i would encourage congress to take a look at the law and in conjunction with that there was a discussion about an excess profits tax and a lot of things the media is talking about in the space. we do not have the resources to go after the super bigs as you referred to them to the very low income people to identify for auditing at a higher and disproportionate rate and we don't have the adequate staffing we need.

and those that have record profits and are not taxing that to consumers. does the irs support providing an income-based tax relief to provide consumers with a monthly rebate paid for by the excess profits of big oil companies? that would be a policy called for treasury. i want to solutions now. we cannot wait. my constituents are struggling to get by as it is and yes we have a lot of priorities but this is one that must be addressed. >> the secretary will meet with you. >> i hope you well and i appreciate his leadership. turning back to the tax filing season, i have two questions i want to get on the record.

is there someone my staff can call with respect to the delays in the direct deposit issue that we are hearing about, and how is the department dividing its resources to address the backlog while also processing the incoming 2021 claims? >> i think your staff house my cell phone we have the friday briefings. we process on a first in an first-out basis and have about 2.5 million returns that were filed. 20 paper returns, excuse me, 21 and we have about 4.2 million total returns and inventory to

be processed. everything else is in process and has fallen out for some particular reason. we can certainly go through it. i'm confident if i may if any of you were in my seat it would have the same passion and prior to that i sit here with the effort of the folks to get this right. we are working really hard on behalf of each of you. >> the chair recognizes you for five minutes. >> thank you for being here today. i would like to have some additional conversations around the ert see. a lot of companies, i was in small business 35 years and understand the importance of the relief that congress gave and much of that didn't get to the

businesses but they have exposure to the tax and they are struggling and we've talked to accountants and companies facing the ert see issue. filing the amended because they don't have the bandwidth in time for the filings. in the cases companies will be filing the april 22 returns with reduced wages but they haven't received the credit. also liable for the safe harbor on the estimated taxes which is inflated to do to the latest wages and referred instances of companies have to take down short-term loans to pay the

estimates or the liability that's due until they receive credits from the previous year. like my colleague pointed out, this program is meant to provide emergency assistance to small businesses and this might seem like a difference and i understand your passion but i can assure you the small businesses are hurting and shouldn't be penalized for doing the right thing. there are massive backlogs at the irs and procedures in place to address these issues. but they need to certainty that they will see the credits in a timely manner and at the assurances that will not be penalized. to those who fight a long time but have returned stuck in the backlog. specifically as it relates to the ert see.

>> specifically and generally we consider the penalty relief. i sent everybody here every time i go outside and do presentations, the 36 years representing taxpayers mostly with respect to the various state taxing agencies and of the accountants and in conversations. i would like to have that notice and find out because all automated notices stopped months ago and so we have addressed virtually everything. nothing is off the table for us to consider. we have regular meetings with people all over and i think you heard me say i know thousands of people on the outside who fortunately or unfortunately

have the cell phone i had before. >> thank you for protecting me. the point being, our ear is to the ground on the front lines in every direction. internally you heard me talk about the people handling the calls and that's getting to me. externally, my friends are the people you're talking about whether it's a small business owners, accountants and agents, people without a designation or with a designation so you understand in advance the need for the prayer ready. i do not anticipate people ending up with a penalty. when we had automated -- >> we have about a minute left about to the specifics because there were a lot of preparers watching the video and we want to make sure they see this. i guess i am trying to put you on the spot. you've been on the other side

representing the businesses. they are asking not to be penalized in the liability and estimates on money they haven't received yet. they understand it's not their e asking for anything special other than not to be penalized for money they haven't received yet. the people that provided the letters know the answers to the questions they have you ask me. the answer to that is -- >> i've been in business 35 years. multiple businesses with a personal thing it should be for everybody. >> that's what i'm speaking to. and i'm talking to the same people you're talking to. they are not my professional colleagues but your friends and business. we are all in the same thing. irs is an agency of people who understand and have gone through the same thing. >> you are not answering the question. it's going to get out quickly because we are at the end of the

quarter. >> the gentle man yields back and recognizes mr. davis for five minutes. thank you commissioner and for being here and answering the questions. let me thank you for your letter yesterday. >> i thought that went out to you previously and you and i had discussions before and the letter was to confirm those

discussions. >> to help understand the income tax credit provisions are relevant to them. from the congressional district helping educate constituents. can your team provide myself and the committee income reports on a number for tax year 2021.

could that information be provided? >> i have that information for you today. we don't keep the information directly but we do under the act required to hold those until february 15th. the information i have today is on the refundable credits that we have held as of february 15th but have since released the three basic categories. it's held not only for economic impact or earned income tax but it was held only for the child tax credit and both child tax credit so in total, $34 billion

was held through february 15th in accordance with of the act and we were not able to distribute that until after february 15th. the eit see was $2.3 billion. a ctc was $110 million. they hold a combine to so people would claim both credits $26.7 billion. there's $5 billion of other credits so those numbers were a total of 34,110,000,000 and a conjoined 26 billion for the combination of eit see. >> for the specifics i kind of rounded off. >> thank you very much and again i want to shout out and say thanks to the taxpayers

advocates in chicago to make sure the individuals understand the earned income tax credit and understand all those things to help them spread the word. so thank you very much, and i yelled back. i want to thank the commissioner for joining us today. please be advised members have two weeks to submit questions to be answered later in writing. those questions and your answers will be made a part of the formal hearing record and with that, the subcommittee stands adjourned -- separate part in te

record. the presiding officer: without objection. mr. durbin: thank you, mr. president. just a few days america's eyes will turn toward the senate judiciary committee as we begin the process of considering judge ketanji brown jackson for her nomination to the supreme court. it's going to be an historic moment on monday, as judge jackson appears before the committee. gaveling the hearing together as chair of the committee will ranking as one of the highest honors of my career in congress. next week the american people will have chance to meet judge jackson, learn about her, her professional record, and her life