no one would touch us or help us get coverage. that is in america's past. this is a good thing for our country. there are plenty of glitches in it. the one thing i would like to remind viewers of is -- i wrote an early book on franklin roosevelt -- the social security act of 1935 was a flawed piece of legislation. it had to be fixed numerous times to take care of particular problems in social security. host: we have to end it there. the house is coming in. thank you for joining us. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014]

ileana ros-lehtinen to act as speaker pro tempore on this day, signed, john a. boehner, speaker of the house of representatives. the speaker pro tempore: pursuant to the order of the house of january 7, 2014, the chair will now recognize members from lists submitted by the majority and minority leaders for morning hour ebate. the chair will alternate recognition between the parties with each party limited to one hour and each member other than the majority and minority leaders and the minority whip but in to five minutes, no event shall debate continue beyond 11:50 a.m. the chair recognizes the gentleman from north carolina, mr. jones, for five minutes. mr. jones: madam chairman, thank you very much. i'm on the nor again today to talk about -- on the floor again today to talk about afghanistan, the absolute waste of life and money. a lot of people don't realize this, but if you go back to

2001, the war in iraq and afghanistan, we have spent over $1.5 trillion which averages out to about $11.2 million tax dollars paid every hour by the american people. in today's national paper, the "usa today," and other headlines, the headline is this, "obama to karzai: time running out for security deal." madam speaker, based on recent polls this would be good news to the american people if we would not continue this relationship with afghanistan. it is nothing but an absolute waste of the taxpayers' money and the american people are sick and tired of it. a recent poll last week by gallup showed that almost 50% of the american people believe that the war in afghanistan was a mistake to start with. i can honestly say this. if it was not a mistake to

start with, it's a mistake now that we continue to support and spend money on a corrupt leader named karzai. mr. speaker -- madam speaker, as i listen to the secretary of defense, chuck hagel, yesterday talk about the financial pressure on our military and the budget that he will be supporting that mr. obama has proposed, i wonder why we in congress are not allowed to debate on the floor of this house whether we as the house, not talking about the senate now, whether we believe that we should have a 10-year agreement with afghanistan. again, we are talking about spending anywhere from $3 billion to $4 billion a month. it is borrowed money from the chinese and japanese, and we continue to raise the debt ceiling because we can't -- cannot pay our own bills. it is time for the congress to speak out on behalf of the american people and say enough is enough. to be clear, this agreement that president karzai has adamantly refused to sign, as

"the washington post" reported earlier this week, during a december visit to kabul, hagel suggested that the late february nato meaning, this week, was a cutoff point for president karzai to sign the bilateral strategic agreement that sets the terms for a post-2014 u.s. presence. mr. speaker, we cannot any longer police the world. we can hardly afford to pay our own bills without going to foreign governments to borrow money. mr. speaker, it is time for congress to reach out and to say that we listen to the american people, and when we are talking about not being able to take care of our veterans and we're going to cut programs for children and senior citizens and even our veterans are in jeopardy of getting the benefits that they have earned, it's time for the american people to put pressure on congress for us to have this debate that many of us in both parties would like to have,

quite frankly. madam speaker, i have beside me a photograph of a young man named eric edmondson. eric in 2005 was in a humvee that hit by i.e.d. that exploded. eric has been in the national wounded warrior project ads across this nation. eric is like so many of the wounded. we just don't really think about them every day but we should. eric has a wonderful wife. his mom and dad were able to retire to newburn, north carolina, which is in my district, and help eric have a quality of life. madam speaker, i can honestly tell you that we have so many veterans that we are going to need to take care of that earned the right from this government that we are going to take care of them that we are going to have a tsunami that's going to hit this congress in a few years and we are going to wonder how in the world we are

going to give them what they deserve. madam speaker, it is time for this congress to put pressure on the leadership of the republican party and the democratic party to force a discussion and a debate on the future of our financial involvement in afghanistan. with that, madam speaker, i am going to ask god to please bless our men and women in uniform. i ask god to please bless the wounded, to bless the families who have given a child that died for freedom in iraq and afghanistan and ask god that we will do what is right in the eyes of god and to please bless the president of the united states, that he'll do what is right in the eyes of god for america. with that, madam speaker, i yield back the balance of my time. the speaker pro tempore: the gentleman yields back. the chair recognizes the gentleman from massachusetts, mr. mcgovern, for five minutes. mr. mcgovern: i ask unanimous consent to revise and extend my remarks. the speaker pro tempore: without objection. mr. mcgovern: madam speaker, there are close to 50 million people who are hungry in the

united states of america. we're the richest country in the history of the world, and we have close to 50 million people who are food insecure or hungry. 17 million of these people are kids, and we in congress are not doing nearly enough to address this issue. in fact, this congress has made things worse for many struggling families all across this country. last november, there was an $11 billion cut that went into effect with regard to the snap program. that's the name of the program that was formerly known as food stamps. an $11 billion cut that impacted every single beneficiary on this program. everybody got a cut. food prices didn't go down, but they got a cut. and then we just recently passed a farm bill in this congress that made sure that those well-off special interests were protected. the rich got richer, but we paid for those subsidies by

cutting snap by another $8.6 billion. it is shameful. it is shameful. and madam speaker, these cuts are real, and the people they impact are real. sometimes i wonder whether those who voted for these cuts have any appreciation of what it's like to be poor in america , whether they've ever been to a food bank or soup kitchen or ever talked to anybody who's on snap. it's hard, it's difficult to be poor in america, and despite what i believe is this indifference and in some cases contempt for poor people that we've seen in this chamber, i do want to acknowledge that outside of this congress and outside of government there are many, many people who understand that we all should care about our brothers and sisters who are struggling and who are doing amazing things. last week during our break, i

visited with some people who i think are doing things that i found to be inspirational. visiting some of these places, these soup kitchens and shelters i visited last week gave me some new inspiration and new hope that maybe what they're doing will be contagious and that those of us in this congress will step up to the plate, you know, and take on the issue of hunger and poverty in this country. i visited a soup kitchen called not bread alone, which was in massachusetts. i met with the supervisor, hannah elliott, and a chef and people from all walks of life who prepared nutritious meals for those who are struggling and i talked to the people who came in to have one of these nutritious meals. these people are our neighbors. these people have worked to make this country great. some of them are veterans. and they're -- they've fallen

on hard times and they can't afford to eat, and thank god for a place like not bread alone who can come in and be in a warm place and have a decent meal and feel like people care about them. umass apple hurst, -- umass, i met a group of young students called the food recovery network. what they do is they work with the kitchen at the university apple hearst who -- amherst that they take those leftovers and they follow all these procedures that you have to follow to make sure that everything is, you know, within the health codes but they take this food and deliver it to an emergency shelter called craig's doors, which is also there. and i met the executive director there, kevin noonan, who is a wonderful man, and all

the volunteers there. and i had the privilege of serving meals who came to the shelter on a cold wintry night. i have to tell you it is eye opening when you talk to these people and you learn about their backgrounds and learn about how they've fallen on hard times, but i'm grateful there are places like craig's doors. i'm grateful there are young students like the ones i met at the university of mass, amherst, who has stepped up to the plate and tried to feed people who are hungry, and i'm grateful for places like not bread alone who does a great job in terms of providing food to people. i sat down with a president of a university and faculty and members of their campus kitchen. they actually have a food bank on their campus because there is a need. there are people who are going to school who do not have enough to eat, and this school provides them the support and help they need.

they have a garden and they're growing food, not only for that soup kitchen and for their food bank, but for their students as well because they are putting efforts on nutrition. i'll close, madam speaker, by saying these are inspirational activities that are going on. we need to learn by them and we need to do much better. nobody in america should go hungry. i yield back the balance of my time. the speaker pro tempore: the gentleman's time has expired. the chair recognizes the gentlewoman from florida, ms. ros-lehtinen, for five minutes. ms. ros-lehtinen: i thank you, madam speaker, and today i rise for those who cannot speak freely in venezuela. widespread demonstrations have broken out throughout venezuela to protest an oppressive regime that psyches to silence the people -- seeks to silence the people and their fundamentals freedom of expression and their right to assembly. after years under chavez, these brave men and women are expressing themselves in a united clear way that what they

want is what should be rightfully theirs, the respect for human rights, a true democracy in venezuela. and in response, as you can see here, the president and his thugs treat them like criminals. over the past weeks, madam, 14 people have been killed, over 100 have been unjustly detained. but because he controls the major media outlets, he has silenced many of those who attempt to draw attention to the plight of the venezuelan people and instead casts the blame on the united states for all of the country's ills. the nerve. blaming the united states for his own domestic problems seems to be the motto for him but the venezuelan people are smarter than that. they recognize that this is just a scheme, another scheme of his. the regime tried to silence its people by blocking images on

twitter as venezuela's turn to social media to show the world the ugly reality that they are going through. and as the violence in venezuela continues to escalate, responsible nations in the hemisphere and throughout the world have a moral obligation to stand with the people of venezuela against the forces of fear and repression. we must be the voice for those suffering under this oppression. at the same time, we must condemn the violent actions of the regime against people who are yearning for liberty, for justice, for democracy, for respect for human rights. this fight for democracy and human rights isn't the struggle of the venezuelans only. it is the struggle of all who seek to advance the cause of human dignity and freedom. how we respond matters. madam speaker, it is a test of our commitment to the ideals of freedom and democracy for everyone, not just for a few. it is also a test of our

resolve. other oppressive leaders in the region are watching us to see if we back up our lofty words with action. so we must not equivocate, we must not waiver. we must stand up for those who cannot stand up for themselves and we must be a voice for those who are being silenced by this repressive regime, because our inaction would only serve to embolden other rogue regimes that seek to fight back the tides of democracy. throughout the western hemisphere, madam speaker, we have seen these regimes, such as venezuela and the one in cuba, work together to oppress and silence civil society. just yesterday in my native homeland of cuba, one doctor, a leading cuban pro--democracy advocate and resip enter -- pro-democracy advocate was unjustly arrested by agents of the castro regime for expressing his support for one

of the leading opposition figures who remains in military jail as we speak. . we must send a unified message that we will not look the other way when they commit heinous acts against their own people. we must show them that the world is watching and that they will face serious consequences for their transgressions. and that is why, madam speaker, i have proposed house resolution 488, that expresses solidarity with the people of venezuela who yearn for freedom, democracy, and dignity. i commend the government of panama for calling for an urgent meeting of latin american foreign ministers at the organization of american states, o.a.s., to address this ongoing crisis in venezuela. but sadly this response is an exception as other countries in the hemisphere remain deafening silent. i call on the o.a.s. to demonstrate its commitment on the principles of its

inter-american democratic charter and support the venezuelan people's right for democratic reforms to be respected in their country and respect for human rights. i urge the united states administration to make a priority of supporting the venezuelan people's aspirations for democracy and liberty. i urge my colleagues in the congress to join me in this important call for solidarity. thank you, madam speaker, for the time. the speaker pro tempore: the gentlewoman yields back. the chair recognizes the gentleman from new york, mr. tonko, for five minutes. you, madam hank chair. madam speaker, we are in a global competition, a global race on clean energy and innovation. in our efforts to witness race and ensure our place as the kingpin of the global economy, for decades to come we must support a secure, all of the above domestic energy supply

that includes both newly abundant traditional fossil fuels as well as clean renewable energy. energy such as wind, solar, biomass, hydro, nuclear, and more. we simply cannot continue to rely on a single fossil fuel to power our economy. that is not wise, long-term policy. today i would like to highlight one of these abundant job creating clean energy sources. wind energy, one way to support this critical source of energy for our nation is the federal production tax credit. the credit that keeps electricity rates low and encourages development of proven renewable energy projects. this credit expired at the end of last year, and must be retroactively extended to foster job growth and promote a greener and cleaner environment for the next generation. the p.t.c., production tax

credit, also creates jobs. in my district, the capital region of new york state, we are host to g.e.'s global research center and wind turbines service septre. in 2012 alone, g.e.'s wind division produced some 1,722 megawatts of power and provided a local capital investment of some $3.2 billion. if we are serious about helping the private sector create quality jobs that will put purchasing power back in the hands of the middle class, we must support wind power as one part of our overall energy policy and strategy. madam speaker, today i renew my support for wind power and the almost 2,000 jobs this clean energy source generates in my home state of new york. a number that is growing by the day, and a group whose work

every day is helping to grow our economy, clean the air we breathe, and the water we drink, and make us truly energy independent. with that i thank you, madam speaker, and i yield back. the speaker pro tempore: the gentleman yields back. the chair recognizes the texas gentleman, mr. olson. for five minutes. madam speaker, on the americans' national debt, president obama is very different than senator obama. senator barack obama on the 2006, oor, march 16,

quote, the fact that we are here today to debate raising america's debt limit is a sign of leadership failure. it's a sign that the u.s. government can't pay its own bills. it's a sign we depend on ongoing financial assistance from foreign countries to finance our government's reckless fiscal policies. over the past five years our federal debt has increased by $3.5 trillion to $8.6 trillion. that is trillion with a t. that will is money we have borrowed from the social security trust fund, borrowed from china and japan, borrowed from american taxpayers. numbers that large are sometimes hard to understand. some may wonder why they matter. here's why.

this year the federal government will spend $220 billion on interest. end quote. senator obama later explained, quote, that is more money to pay interest on our debt this year than we'll spend on education, homeland security, transportation, and veterans benefits combined. end quote. after talking about hurricane katrina, senator obama shifted to the debt tax. quote, in the costs of our debt is one of the fastest growing expenses in our federal budget. this rising debt is a hidden domestic enemy, robbing our cities and states of critical investments in infrastructure like bridges, ports, and levees.

our families and children, critical investments in education, health care reform, seniors of their retirement health security they counted on. every dollar we pay in interest is a dollar that is not going to investment in america's priorities. instead interest payments are a significant tax on all americans. a debt tax that washington doesn't want to talk about. if washington were serious about an honest tax relief in this ountry, we would see an effort by returning to fiscal -- responsible fiscal policies. end quote. senator obama finally brought up our debt to other nations, quote, now there is nothing wrong with borrowing from foreign countries, but we must

remember that the more we depend on foreign nations to lend us money, the more our economic security is tied to the whims of foreign leaders whose interests might not be in line with ours. increasing america's debt weakens us domestically and internationally. it means that the buck stops here. instead washington is shifting the burden of bad choices today on to the backs of our children and grandchildren. america has a debt problem and a failure of leadership. americans deserve better. i therefore intend to oppose the empt to increase america -- the effort to increase america's debt limit, unquote. today our national debt is $18

trillion, with a t. clearly president obama has forgotten senator obama's words. but the american people remember and on their behalf i ask president obama to decrease our debt by working with congress to reform our tax code to make it pro-growth and anti-debt. i yield back. the speaker pro tempore: the gentleman yields back. the chair recognizes the gentleman from new york, mr. adler, for five minutes. mr. nadler: thank you, madam chair. i rise today to honor david lackman on his retirement from the house of representatives and to thank him for his 25 years of federal service. david came to washington in 1989 to work for former congressman helpinglis of brooklyn,

him on issues related to criminal justice, religious liberty, housing, and the environment. when i was elected to congress in 1992, david became my first legislative director. in 1997 david moved to the judiciary subcommittee on commercial and administrative law. for the past 13 years he's served as the democratic chief of staff on the constitution and civil justice subcommittee. as an expert on the first amendment and particularly on issues of religious liberty and church-state relations, david was instrumental in the passage of the religious freedom restoration act and the religious land use and institutionalized persons act. he's also one of the foremost experts in the house on bankruptcy, a very technical and complicated area of law, but one that affects millions of people. over the last 25 years, david has worked tirelessly to advocate for the rights and well-being of people where most in need of congress' protection but do not have access to

high-priced lobbyists. david performed these services every day, whether in defending against attacks on women's reproductive rights, working to protect americans' civil liberties against patriot act provisions, or building support for legislation to overturn the defense of marriage act. david's resume is impressive, but it does not tell the full story. david is a legend in the house. he's one of those committed public servants who has become an institution within the institution. as the chief of staff of the constitution subcommittee, david has been the point person on some of the most difficult and divisive issues facing congress each year. and yet he brings a sense of humor, wit, and perspective that is well-known in the house without ever sacrificing his commitment to advancing the cause of equality and justice and to defending the rights and freedoms of the most vulnerable among us. he has provided members of congress, staff, and advocates with a wealth of expertise and

institutional memory on a wide range of issues that will be difficult if not impossible to replace. it will be a long time before i stop picking up the phone and dialing his number to ask him a question about some matter before the committee or to get his perspective on the latest supreme court decision, or to just reminisce about the days of 1970's and 1980's new york politics. david has worked with me for a long time and his biggest contribution has been as a trusted advisor and loyal friend. madam speaker, i ask my colleagues to join me in thanking david for his service and for his dedication to working on behalf of the american people. he will be sorely missed in this institution, but we wish him all the best in his future endeavors. thank you. i yield back. the speaker pro tempore: the gentleman yields back. the chair recognizes the gentleman from pennsylvania, mr. hompson, for five minutes. mr. thompson: thank you, madam

speaker. madam speaker, on february 7, 2014, president obama signed into law the agricultural act of 2014. the five-year farm bill re-authorization that passed congress with bipartisan support , and reduces the annual budget deficits by $16. billion over 10 years. industry professionals across my home state of pennsylvania and nationally, including farmers, foresters, conservationists, researchers, and policy advocates have praised the law as an historic improvement. the federal agriculture policy that will improve land management, support key areas of economic activity, and bolster important investments in education and applied research. susan benedict, an american tree pharmacist thames certified forest owner from state college, pennsylvania, stated, and i quote, as a pennsylvania tree farmer i can happily say this farm bill was well worth the wait. with the promotion of new market opportunities and the biobased markets program and green building markets, improved

access to critical conservation programs, an increased regulatory certainty when protecting water quality of my forestings rose, this farm bill is truly the best farm bill yet forests. i applaud the conference committee members for championing strong forestry provisions such as the biobased markets program changes for america's 22 million family forest owners, end of quote. the president of the generations forestry in cane, pennsylvania, stated, i quote, from the outside looking in congress has played a level of of bipartisanship on the farm bill that's been lacking, which is far better than the gridlock we have enunderered. this is a wonderful bill and good final product from numerous standpoints, from the standpoint of forest service, this bill gives secretary vilsack and forest chief tidwell more tools to manage forests which is critically important. now that these tools are available the forest service must use them. this bill also office our foresters and private industry

more tools to actively manage, so this is also very important, end of quote. . one dean stated, and i quote, agricultural policy impacts every american by advancing food security for our nation and beyond, including providing for critical research and education programs. we are thrilled that a new five-year farm bill is now reality. as a specialty crop state of particular interest, pennsylvania's inclusion of the crop research initiative. these programs help creep our pennsylvania farmers competitive and increase -- in an increasingly complex environment and the challenge of feeding a growing population, end of quote. the director of pennsylvania's conservation districts stated, and i quote, the new federal farm bill -- we needed congress to understand these points and to ensure that the importance of conservation efforts wasn't lost in the final farm bill

language. the final bill addressed our fiscal challenges by understanding the necessity of redunks, the federal spending, while identifying the need of efficiencies and improvements of program delivery. the final bill will allow for clear water for pennsylvania waterways, resulting in healthier communities and stronger economies, end of quote. the conservency stated, despite the polarized political climate and challenging budget times this farm bill will be one of the strongest ever for conservation and forestry. they are practical, cost-effective and provides solid waste for the government to collaborate with individual landowners. the president and c.e.o. of the forestry states that it provides resources to have conservation promises on the ground and making stewardship affordable. improvements includes stronger market opportunities for forests, improvements to the biobased market program and

green building markets, the fastest growing market for wood products. it also includes strong support has rograms that provisions of regulatory certainty when protecting water quality, end of quote. mr. speaker, it isn't every day that a broad -- madam speaker -- excuse me -- it isn't every day that a broad cross section of policy advocates and industry professionals find themselves on the same side of a given policy issue. then again, it isn't every day that both sides work together for the good of the country and produce good public policy that improves the nation's public health while at the same time reforms government and reduces spending. madam speaker, i yield back the balance of my time. the speaker pro tempore: the gentleman yields back. the chair recognizes the gentleman from indiana, mr. carson, for five minutes. mr. carson: thank you, madam speaker. madam speaker, i rise today to draw attention once again to an

issue that some in this congress seem to have forgotten. millions of americans who are unemployed or who are working for wages that cannot support their families. imagine being told that you have to support your family for the rest of your life with just month's paycheck. if it sounds impossible to imagine it's because too often it is. low-income families have to make impossible choices between food and medicine. they often live in unsafe neighborhoods and send their kids to subpar schools because they have no other option. getting paid the minimum wage has always been difficult, but it's getting harder year after year. if the minimum wage had been

tied to inflation in 1960, it would be $10.10 today, or just over $20,000 per year. someone making this today wouldn't be wealthy, but working full time might at least allow them to make ends meet. for me this is what our country's really all about. if you work hard, you can build a life for yourself and your family. madam speaker, this is why i am a very proud co-sponsor of the fair minimum wage act, which finally raises the minimum wage for millions of americans. now, unfortunately some of my colleagues oppose this very bill, claiming that raising the minimum wage should be a state-by-state decision. that's fine if your state chooses to raise its minimum wage. but if not, your constituents

are no better off. they're still making $7.25 an hour. so i have just one question. if you're a well-intentioned pate yolic republican who wants to leave the decision up to the states, -- patriotic republican who wants to leave the decision up to the states, are you prepared to explain to your constituents why they are worth less to you than the people across state lines? for my part, i do not want low-wage hoosiers to make less than those in other states just because our general assembly decides not to act. of course i understand the argument that some people may work fewer hours and some may even lose their jobs. this may be true, but it's important to remember that we have raised our minimum wage in the past. in the past, the very same

argument has proven itself to be untrue. so i'm very optimistic that american employers and particularly hoosier employers in my congressional district will do what they can to weather a minimum wage increase without letting folks go. now, unfortunately this is not the only unnecessary struggle congress has laid on america's low-income families this year. today, our well-intentioned patriotic republican leaders continue to block an extension of emergency unemployment insurance. because of congressional inaction, nearly two million americans, madam speaker, were instantly cut off from their benefits in december with 72,000 more being cut off each week. many of my republican friends unemployment

slush -- painted unemployment slush funds for lazy americans. it's not only offensive, it's untrue. americans want to work, but in many communities there are simply no jobs available. and our economic downturn, madam speaker, everything from restaurants to machine shops to retail stores close their doors and are only now starting to come back. in indianapolis, many hoosiers are finding they no longer have the skills necessary for the modern work force. educated men and women with years of experience have to retrain before they even get rehired. others have seen their industry simply disappear and have to prepare themselves for an entirely new career. this is far from laziness. retrain and looking for a job is hard work with no pay. these americans deserve our

help covering expenses while they get back on their feet. madam speaker, my good house republican friends have yet to bring a real jobs bill to the floor in the 113th congress. instead focusing continually on deregulation and repealing the affordable care act. meanwhile, they overlooked raising the minimum wage is the right thing to do, putting our country back on track. thank you, madam speaker. i yield back. the speaker pro tempore: the gentleman's time has expired. pursuant to clause 12-a of rule 1, the chair declares the house in recess until noon today.

>> a lot of focus on the i.r.s.ment on that note we take you over to a house appropriations subcommittee hearing on the i.r.s. that's the director of the i.r.s. with his opening testimony before the subcommittee. live coverage here on c-span. >> would it surprise me the level of energy and enthusiasm that remains? these are employees like all federal employees that haven't had a pay raise in four years, suffered through the government shutdown, suffered with furlough days, and endured the criticism over the last eight to 10 months about the agency. you would expect what i would hear would be grumbling or complaining. what i have heard continually across those cities i have been to already, is the employees' primary concern is there aren't enough people for them in the offices to help taxpayers. the people who i sat in call centers in baltimore, call centers in st. louis, people, their concern is not that they

are overworked, they are working as hard as they can, their concern is there aren't as many there used to be answering phone calls and they don't feel they are delivering taxpayers the services they deserve. the people at the taxpayer assistance centers who run those centers oftentimes with empty desks are also concerned about the people standing in line. so to me it's a refreshing indication of the dedication of the 90,000 employees working for the i.r.s. have to meeting, the chairman section actly right, the mission of the agency, to provide taxpayers the services they deserve if we expect them to comply with the tax code. > in general you feel that the feelings of the staff is one of let's get the job done notwithstanding bad publicity caused by some shortage in personnel? >> that's been my experience and it has surprised me. i thought i would hear even more grumbling about the fact they have they haven't had a pay raise or working overtime

because of a lack of personnel. as i say i have seen last count personally talked to over 3,000 employees in offices with 20,000 employees in them. and the constant theme has been we need more people to allow us to do the work. >> i think it's always a good sign, so i'll take it now to thank our federal workers. i know there are some fall amount of members of both parties who would like to see less government, but that's another issue for another hearing. not this one. i have great respect for the federal workers and the work that they do. let me ask you a question, former acting commissioner conducted an internal revenue -- re new that president obama requested to the public trust and i.r.s. half have the recommendations in that review been carried out? are there other changes you think would be helpful? if so, how can this committee assist you? >> we have implemented and

responded to positively all of the nine recommendations from the inspector general focused on the 501-c-4 situation. we also have done broader reviews of efficiencies in the organization. again trying to be able to respond more effectively to the demands that have been placed on he organization. >> yellow sign which means caution. 30 seconds left. >> just one more question, then. the i.r.s. budget was reduced to $660 million due to the sequester. what was the effect on your operations based on that reduction? >> we expect that if we had the pre-sequester number, not the president's request for 2014, the presequester number, we would have been able to answer this year another 3.5 million calls. we would do another 100,000 audits. and we would collect

approximately $3 billion more in our enforcement activities. >> thank you, mr. chairman. >> thank you. turn to mr. diaz-balart. >> thank you very much, mr. chairman. glad to have you here, sir. let me throw out two issues if i may. one is one i have been dealing with your predecessors for quite a long time. unfortunately the i.r.s. has not always acted in good faith. actually one time admitting to me in front of a number of people that they had been instructed to not tell me the truth. i was pleased they admitted to me the person said i was not authorized to tell you the truth, which i thought was a sad day, but you better believe that's something that i hope will never happen again. it pertains to an i.r.s. specific trueling, it's a

technical advice memorandum or t.a.m., that all of the outside experts say -- calls into question 70 years of settled law on the definition of political subdivisions, there are many around the country, including in florida. this town effectively makes changes, makes a change to the law and it's retroactive. this is not something the i.r.s. should be doing in an audit f it wants to change the law, they should come to congress or at the very least propose regulations to make the changes prospective. it's calling into questions millions of dollars of tax exempt bonds already in the hands of investors. not only by wait of this entity, but this also many others around the country. to the point where economic development projects in florida and other states have been halted as a result of this t.a.m., and those who have gone forward are paying higher interest rates because of the vagueness of this t.a.m. commissioner, i have been trying to deal with this with your

predecessors. we have been misinformed. the chairman is very well aware of this. i just need your commitment you're going to look at this in a serious way to make sure the i.r.s. is not doing things in a way and retroactively in a way that's changing 70 years of state law through a t.a.m. >> i would be pleased to look into that and get back to you. >> i don't expect you to have the details, but i do expect to get with you to solve that. >> delighted to talk with you about that further. >> thank you. let me switch gears, the i.r.s.'s plan or no plans to move forward with the real time tax system. this subcommittee has placed report language in our annual appropriations bills since 2009 prohibiting the i.r.s. from using any funds on a simple tax return pilot program. associated without seeking specific authorization or appropriations from the congress. the language has been there.

february, 2013, i sent a lert to acting commissioner miller requesting that he confirm in writing that the i.r.s. expenditures to convert to real time tax system had ceased. the commissioner wrote back saying, quote, the i.r.s. is not in the process of implementing a conversion to real tax system. unfortunately later i learned there has been money spent on that and that there have been plans under way. i tried to find out how much it was. i asked the i.r.s. how much money had been spent on a total real tax system, the response as that there was a contract for approximately $3.54 million to explore a system, sir, that congress has specifically said it can't do and the i.r.s. told us that they weren't going to do. later i hear from other committees, house government reform, oversight committee has recovered additional documents from the i.r.s. that shows that the amount spent by the i.r.s. and real tax time system could be as much as $30 million. i can't confirm that. so two questions, are you aware

of any further exploration and implementation by the i.r.s. of any data collection system related to the real time tax system, number -- number one? again does that language in the appropriations bills since 2009 seems to have been absolutely systematically ignored. will you pledge to adhere to the report language in the current f.y. 2014 omnibus, and again what i'm asking is also 100% transparency to this subcommittee to members of the subcommittee on the other issue but also on the real tax system. >> i'm happy to commit that we will follow -- we'll follow all of the instructions whether you give them to us personally or in legislation. i think that's important for us to be able to do. >> with regard to the real-time tax system, part of the problem is two different systems have been called real time tax. the thing that's been the focus of externally, could we repopulate a he return form so

you could look at it and make decisions or thers coirs even file your return for you. that's what a lot of people have talked about as being the real-time tax -- we are not doing anything with that. it would take a long time to be able to do that. we do have work going on to try to figure out how to get bert third party information into our system earlier so as we actually match up tax returns for identity theft or engage in audits we'll have more data available in a timely manner. right now we don't get the w-2 forms from social security or the 1099 forms until late in the spring, which doesn't do us much good as everybody is filing in january or february. so some people internally have called that a real-time tax system, but it has nothing to do with the program you're talking about and we have no program going forward that i know of. and certainly we don't intend to do anything like that without talking to you. >> i look forward to working with the commissioner on these two areas on identity theft and other issues. >> thank you, mr. quigly. >> thank you, mr. chairman. welcome, commissioner. in addition to everything else

you have going with the i.r.s., this is an historic filing period. the defense of marriage act was struck down last june by the supreme court so for the first time same-sex couples will be filing federal tax returns together. this is the first filing period that is taking place. what education within the i.r.s. and outside the i.r.s. is takes place? how are you helping to educate the public in making resources available to people? particularly with some of the complexities involved. as you know different states have different laws, and i have residents in my district and in my state who were married in iowa, for example, illinois is just now beginning to recognize same-sex marriages, what is the i.r.s. doing to deal with these complexities? >> i think it's important, one of the things that did surprise me back there, congressman,

surrounding this question is the amount of outreach the i.r.s. does as a general manager of the taxpayers. we have a website which if you look at it today is a very different website than it was a year ago in the sense of trying to be more user friendly, provide information taxpayers need directly. we work -- whatever partnerships with tax preparers who actually advise. we get them information. we share information about what information their clients will need. we have a youtube channel with over 100 instructional videos about what you should worry about. we just put out our first advice to taxpayers this week about starting to look forward to how to deal with the affordable care act, particularly advertising taxpayers if their circumstances changed during the year, they need to adjust whatever premium tax credit they are getting. in the deence in of marriage act -- defevens marriage act, we have put out reminders. we remind people about estimated taxes. there is a tremendous amount of time spent reaching out to taxpayers trying to educate them as much as we can about the tax

code. as i somewhat facetiously said, it may take a while before i can convince people we are from the i.r.s. and here to help you, but we do spend a significant amount of time doing what you're talking about, which is prior to the filing season and during the filing season, give people as much information as they can go. this year, for instance, we are advising people that don't call if you need to find out where your refund is, go to the web sirktse push the tab, and last year 250 million people got information about where's my refund. this year for the first time you can go to the website, authenticate who you are, you can get transcripts of your previous filings and print them at home. you don't have to come to an assistance center or call. it goes partially to the chairman's concern which i have, we can't sit around and see what do we do? we spend a lot of time saying what information do the taxpayers need, what do they call about, how much of that can we give them in some other way? we have tweets. >> you recognize these are unique circumstances.

first time in history this is taking place and a lot of taxpayers need additional assistance. all receipt sources you are talking about are helping these new filings. >> right. and the people who are on the phones have information about that. so if taxpayers call and get through, they'll be able to get that kind of information. le it try proactively in all these areas to get information out to taxpayers before they fill out their returns, and even before they feel they have to call. >> appreciate that. your predecessor talked about the cases of identity theft said there were nearly $250,000 reported to your agency in 2011, and 816,000 in 2012. obviously this is an alarming increase. what are you attributing this to and what is the agency doing? >> it's been an explosion since 2010 through actually last filing season in terms of people stealing, owing,

getting social security numbers and filing false returns and trying to get refunds early. we have spent time as i was talking to the chairman yerblings spent time in jacksonville with a wonderful task force jointly between the i.r.s., criminal investigation, and state and law enforcement in jacksonville in florida have become much more aggressive at pursuing this. we have had -- last year had 1,500 investigations up from 300. the two years before. we have a substantially increased sophisticated filter system that identifies suspicious returns as they are filed electronically. last year we actually saw a plateauing in the number of returns that came through that we were able to tax or we think between we had 1,000 indictments recommended last year up from 165 two years earlier. we think we are getting some of the people off the street. we are i think getting the message out that this is not a free game. it's not a free good that you

can't simply steal a social security number and get a refund without being prosecuted for that. but it is a significant problem. we had in the budget proposed $100 million of i.t. work that was not included in the budget but we are figuring in some other ways. part of the $92 million additional funding provided was for this additional purpose and spending it that way. it's going to be a problem. we think we have under control. i noted we were able to resolve for taxpayers the identity theft problems much faster than we used to. but it's one of the three or four highest priorities we have in tax administration. >> thank you. mr. graves. >> mr. commissioner. a lot of discussion about the 501-c-4's earlier. what are some specific examples of 501-c-4's? >> 501-c-4's cover a wide gamut. everything from garden clubs to advocacy groups. and in fact the vast majority of 501-c-4 applications have nothing to do with political

activity. as they go forward. relatively small percent are in that area. one of the issues that we talk about the proposed draft regulations is that everybody is focused on it's really just political organizations that are involved. probably 90% of the 501-c-4's have nothing to do shall -- >> specific example of 501-c-4, an organization that might come under scrutiny under this rule. >> under this rule there would be any organization that is a social welfare organization providing information to the public that engages in political activity in a political campaign. so if you are an organization and you're providing information about any particular subject matter, that would be viewed as social welfare. if you then start running ads for a candidate in a campaign supporting that, that would be political activity or campaign activity. >> is it not true under the

proposed definition that it's any public communication that's made within a certain time period before an election would be considered candidate related political activity, if it identifies that candidate or political office? >> right. your question what about a c-4 and historically. there is a draft regulation, we actually expect to have over 100,000 comments on it, and it's asking for just this discussion. that's what i assume the 100,000 comments are. it has three issues. one is what should be the definition of political activity? what should be included as not appropriate for a social welfare organization, and what would be in that pool? then the next question is, how much of that -- >> proposed definition? >> they are not a proposed -- >> there is a proposed definition. comment is being asked for that. my position -- >> is that the proposed definition right now? the one i just read that deals with political activity as it relates to candidate or political office? >> that's proposed in the -- the

comment people are asking is, what are the options to that? tud should it be applied at all? should we stay with the facts and circumstances -- >> let's sume that proposed definition stays in place. >> i would like to not assume that because i think what we need to do is review the 100,000 comments, which i'm going to be involved with, it's a joint regulation from treasury and i.r.s., and as i said in my prepared testimony, my goal is that whatever comes out of this, if there is a regulation, it's not guaranteed there will be, be one that's clear, fair to everyone, and easy to administer. the i.r.s. is not a political organization and we ought to do whatever we can to get out of the politics of all this. >> i just heard you say, then, that although it's a proposed definition right now, you hope that that is not the final definition -- >> i hope you wouldn't put those words in my mouth. what i said was i hope that whatever regulation comes out if there is one is one that's clear, fair, and easy to

administer. that does not take a position -- >> i thought i heard you say you hope that is not the final definition. under that current definition, if it were final, there would mean no faith-based organization can issue a voter guide on public positions taken by candidates to consolidate that information to assist voters, is that unaccurate? >> if that's -- candidates are mentioned and that's within the 30 to 60 days depending whether it's a primary or election -- >> parenthood wouldn't be able to -- it would mean organizations such as planned parenthood would not be able to issue voter guides as well. >> within the am bit of a campaign, within a campaign that's what the draft would be. that's what the comments are about. there will be ultimately after the comments are reviewed, there will be a public hearing at which congressional members as well as the public will be invided -- invited to attend. >> under the current definition does that mean let's state american legion, or the v.f.w., would they be able to make phone

calls to notify voters that one is registered to vote? maybe a potential voter? or notify voters about candidates and their positions on military defense positions or expansion or defense in general? >> again, the proposed draft would say that voter registration drives within the context of a campaign would not be allowable. the other question that needs to be answered -- i would hope everybody would understand. a, the question is what's the definition going to be? b, how much of that activity? again, it's not proposed that people don't have no activity. it's how much activity, as defined, can an organization be engaged in? and the third important question is to what 501-c organizations which regulation, if there is one, would apply? >> how many in the department have been reprimanded?

>> that process is -- there's a review board that leadership from the top on down is all gone at this point. and several people are no longer at the i.r.s. >> is there a number you can place on that? >> there's no number. at liberty, give you. starting up from ground level all the way through the exempt organization leadership structure has all been changed. >> and you feel like it's been -- i guess substantially it's been justified all the actions have been -- all the reprimands have been taken care of and you're satisfied the direction the organization is going now with the way it's handled? >> i am satisfied to say that the i.g. had good recommendations for training, for guidance, for better review of organizations, if there are questions handled, all of that has gone on. i went to senate to talk to people to -- to cincinnati to

talk to people and whatever issues there was has been solved. again, it's important going forward -- we have six investigations going on. as i've said, i'm looking forward to having at least one or two of them finish sometime soon so we can see what the actual determination of the facts are and we'll respond appropriately and accordingly and we'll see what the response is to that. i think people need to understand that going forward, from -- as i say, this point forward, anyone dealing with the i.r.s., any taxpayer should be comfortable that they're going to get treated fairly in the same way anybody else is no matter what their political affiliation, whatever their organization is, whoever they voted for and any election recently, whether they go to church or don't go to church, if they deal with the i.r.s. they are going to be treated in the same way everybody else is. if you get audited we still, even with limited resources, will do 1,400,000 audits this year, many of them by correspondence. if you get a letter, if you get correspondence, you need to be confident and comfortable

because there's something in your return if it was in somebody else's return that would get the same response. it has nothing to do with who you talked to two weeks ago, what meeting you went to, what organization you belong to. >> thank you. turn to mr. amedeo -- amodei and so in your absence we welcome you and we welcome you again in your presence. >> thank you, mr. chairman. i hope my presence is better than my absence. we'll go from there. mr. commissioner, i want to follow-up where mr. graves was going. i looked at your statement and this is your statement, i assume you had statement preparing it but this is your statement you stand by? >> i wouldn't have submitted if i wasn't going to stand by it. >> you indicated at the bottom of page 1, the i.r.s. needs to fulfill responsibilities to implement tax related provisions, you repped the -- you referenced the a.d.a.

the rewrite. do you know when 501-c-4 was first put on the books generally? let me tell you why i'm asking to help you out. because we're talking about redoing a regulation now as a result of what happened -- i don't believe in cincinnati but all the way up the line, and so i'm wondering to know how 501-c-4 worked before this latest round of stuff that started with cincinnati -- >> that's been around for a while. the legislation was drafted in the eisenhower administration in 1959. >> are you aware of any problems that's been looked at by the i.g. from eisenhower forward until what we're talking about now? >> i'm not. >> ok. thank you. i appreciate that. and so can you -- and i know you weren't there so i'm going forward. congratulations on your timing, by the way. it's excellent. >> some people would say that timing isn't so good. >> it's better than others. can you tell me the genesis of how it was decided within the i.r.s.?

we need to take a look at 501-c-4 and do new regulations? and let me tell you why i'm asking to help you out. i get you want to restore confidence in the i.r.s. and the process and good for you. as you indicated in earlier question, there was no major tax legislation recently, which is aided in your folks' preparation for stuff. so why is 501-c-4 now on the top of the regulatory heap? >> i do not know. it's on the top of the heap now because the, a, there was the i.g. report noting there were difficulties in the 501-c-4 determination procession and one other strong recommendations by the i.g. in his report and in subsequent testimony was that the treasury department and the i.r.s. should put on their priority form review and clarification of the requirements. so it was -- >> so that was generated internally as a result of i.g. operations at treasury? >> there was the issue in the

i.g. report reported and that his recommendations, strong recommendation was that a regulation be considered as part of the priority process at treasury and i.r.s. and that's what happened. what happened before that i wasn't there and i don't know. >> ok. are you curious as to anything before? >> no. at this point, most of the -- i've spent 40 years, 20 in the private sector, 20 in the public sector -- can i just give you my answer. >> you're not curious -- you can't on my five minutes. >> ok. >> i play by the rules. i know you're not trying to evade anything there. can you tell me what percentage the i.r.s.'s budget is devoted to 501-c-4 staffing and operations? and let me tell you why i'm asking that question. because you talk about resource challenges and priorities. so what percentage of your operations go to 501-c-4 administration, enforcement, investigation, whatever? >> well, off the top of my head i would say it's got to be under 1% significantly in the sense we have 90,000 employees.

only 800 work in the entire exempt organization itself. so it's a very small -- >> so it's 1% of your budget. >> it's 1% or less. that's an estimate that i'd have to go take a look at. it's clearly at this point, you know, only 1% of the employees work in the entire exempt organization and the 501-c-4's are probably 5% of that. i don't know, .2%. >> i am going to read off about four, five things here and the context is priorities. you got the a.c.a. that you're working on. you've got issues with conferences and spending money. less than 1% -- i'll do the math on generally what that is of your budget. you've got bonuses that are in the news. you have 501-c-4's and then you have taxpayer assistance which you devoted a lot of time to. number one priority for regulatory reform, out of those is 501-c-4? >> it's a priority because it's

been the issue -- >> is it the number one priority reform or not out of those five things? >> i'm sorry. regulatory reform, we're not reforming a.c.a. we're implementing a.c.a. on fatca. as a set of regulations that -- >> i understand. >> you're talking about my priorities, i would say that if we can solve the 501-c-4 problem, put it behind us, that clearly is one of the six priorities i have. >> well, i guess you see my question where it's less than 1% and you're talking about this committee about our concerns about taxpayer service, our concerns about getting this filing season right, which is great. the a.c.a. is a small project that's froting around. and you have some internal management problems that you inherited. i appreciate all of that. in terms of conferences and bonuses and stuff like that and it's like, really, a law that's been around for 50 years and this is what's going on at the top of the regulatory thing. i will -- my time has expired, mr. chairman.

thank you, but i will look forward to interacting in more than a five-minute context. >> i'd glad to have a longer discussion with you. >> great. look forward to it. >> thank you. mr. yoder. >> thank you, mr. chairman. commissioner, welcome to the committee. we're pleased to have you come before us today to talk about certainly a variety of issues that are important to constituents at home and many hardworking american taxpayers that interface with the i.r.s. you know, last year in the midst of the outcry over the n.s.a. and the i.r.s. targeting of specifically conservative groups based upon ideology, there was a little known, i think, breach of public trust that was occurring at the i.r.s. and at other federal agencies that was brought to light which i think is as stunning or more stunning than the concerns that are constantly raised in the media and that is the i.r.s. and other federal agencies admitted that they were reading the emails and electronic correspondence of americans without a warrant, without

respect with fourth amendment respect. and the i.r.s. said that americans don't have a reasonable expectation of privacy when it comes to their email correspondence. it's stunning. and so under your leadership, my question would be for you, is the i.r.s. continuing to read the emails or other electronic correspondence, the private correspondence of americans without a warrant in controvention of fourth amendment rights? secondly, when it was reading those emails, are you aware if it was reading both conservative and liberals equally or was it targeting those private readings without warrants just on conservatives as it was targeted by other portions of the i.r.s.? >> this is the first time i heard that the i.r.s. read anybody's email so i can't give you any further information. but i will definitely look into that and i'll get back to your question with answers. >> i appreciate that. if that is occurring, sir, would you, i guess to the

committee, agree to ensure that it no longer occurs at the i.r.s.? >> i would be happy to say if we have no authority to do it, then we should not be doing it. now, criminal investigations does investigate. we had 4,500 recommendations for indictments last year, so there's a whole enforcement arm at the i.r.s. that, you know, has law enforcement authority, works with the justice department and state and local governments. so i don't know how much of this is in their domain. >> well, the i.r.s., s.e.c. said they have legal authority under a 1986 law that does not treat electronic correspondence the same way it treats paper correspondence. this is outrageous to a lot of our constituents on both sides of the aisle. in fact, many interest groups and entities across the country have spoken out about this. i introduced a bill, along with congressman graves here, and my democratic colleagues, has over 175 bipartisan co-sponsors to ensure that this practice stops in a variety of federal agencies.

so i guess in your leadership, i would hope you could ensure that you would head that off at the pass, that the i.r.s. would not be engaged in that practice, and that americans could trust that their private correspondence is not being read by some i.r.s. agent without a warrant, at least, or following the normal due process protections that are outlined in the fourth amendment of the united states constitution. >> i think it's a very serious matter. i take it seriously. i will look into it and i'll personally get back to you. >> thank you, sir, for your testimony on that. the issues have been raised involving 501-c-4 groups and it's been discussed in this committee and many committees and that's an issue that many americans are concerned about. i understand that the i.r.s. is attempting to write regulations that might make the enforcement potentially easier on the i.r.s. i guess i think the biggest concern that many of us have is that most americans didn't have a lot of trust already, and now they have very little trust that the i.r.s. is being fair in their enforcement of the

law. i've had folks say that they don't want to get involved in campaigns or be associated with any groups because they're afraid they will be personally subject to audits. i'm sure you'll say today and i hope that's not happening but i guess regardless of what rules we write at the i.r.s., it's not the rules themselves, it's how they're enforced and whether it's enforced fairly and whether we can trust the people, the individuals in their private moments to do the right thing. and so i guess, sir, what can you do to ensure that the folks like lois lerner and others, they are enforced fairly. ose are the concerns from my constituents. >> the public needs to have that comfort and confidence. one of the reasons i have been spending as much time to talking to front line employees is i try to make sure that our culture encourages everybody at all levels of the organization to raise issues and problem and concerns whenever they have them. danny worfolk set in motion the

beginnings of a program of a risk management, and i've told people that everybody has to be a risk manager in the agency, and one of the important risks is to make sure we're following the law, we're treating taxpayers fairly. we have a lot of rules to make sure that happens. a lot of review processees, but it du does depend on people. and my concern is that any employee that's concerned, has a problem, sees anything going on that they feel does not reflect well on the i.r.s., doesn't treat taxpayers fairly, they need to be comfortable they can raise that directly, either to me or anyone else. >> well, and to that end, sir, we had commissioner shulman come before us and confirm long before this became an issue, we asked him in this committee, is this happening? would you ever allow this to happen? he ensured us it couldn't happen, and we heard those assurances before. just be wear that the trust isn't there between congress and the i.r.s. either because we had folks sit in your chair and say, you can trust me this isn't happening. >> what i would say to that, my point earlier was when i

parachuted into these things, my role is play the hand you're dealt and don't spend a lot of time second guessing decisions. as i told employees, our goal is not to have any mistakes. we have 90,000 employees and a complicated tax law and so things won't go perfectly. my goal of running an organization, if it's a problem, it's my problem and we'll work on it together. if it's a mistake it's my mistake and we'll work on it together. if there is a problem i don't know about that's my fault because that means we have not built a culture where issues, problems, difficulties, mistakes get raised through the system. so i am -- my view is i am responsible for and accountable for everything the agency does. and whenever we make a mistake, we're going to find it, we're going to fix it quickly and we'll be transparent about it. if i don't know about it, i say, that's my fault, because i'm trying to get the organization comfortable. i told them, every individual needs to feel bad news is good news. i can't help a problem, solve the problem unless i know it exists. >> i appreciate those statements of personal

accountability and responsibility. i look forward to good results from your leadership, sir. thank you. >> thank you. ms. herrera butler is -- ms. herrera butteler is recognized. >> thank you. >> i have a couple questions. not quite where mr. yoder was coming from. on the issue of social media, twitter and facebook. last year the i.r.s. noted it was in the process of reviewing and updating its policies on the use of social media. quote, specifically the i.r.s. considering what limitations, if any, should be placed on the use of publicly available -- so it's a little bit different -- social media information in a civil examination or collection action. any new internal procedures would be made public. i guess i was curious -- two thoughts about that. how you go about deciding who you're going to read up on, if you're going to go that route, you know, is it someone you're trying to collect information about for a collection action

or is it that people -- there's -- you're looking at putting together part of your division that's going to specifically troll online spaces, what's your thought process going in this route? >> our thought process is when we do examinations when we send you a letter about something in your return, we deal with you about the return. we do not go and look for whatever your facebook account might look like. that doesn't seem to me efficient, effective or appropriate. when we are in criminal investigations, as i say, the criminal investigation department will use all of the information available when they're tracking down people, trying to track down assets, and so there i think it's appropriate for them to use whatever information that they need to. that's when we're tracking down people who are -- have violated the law, not paid the taxes owed. one revenue agent made a good point to me in philadelphia.

we have the willing to pay who have difficulties and those haven't paid but that's because they have some problem in their family. we try to deal with them with installment agreements or offer in compromise. they are different than those who are hiding assets, moving them around, storing them offshore. my thing if we can use social media to find the assets, we should do that. >> you exclusively use facebook and twitter for unwilling to pay criminal investigations? >> that's where i think it is appropriate and important. i don't know -- >> not using facebook and twitter for people who are not in criminal investigations? >> i do not know about that. answer to out the that i'd share with you that answer. >> please share it with the committee. >> i'd be delighted to share it ith the chairman and everyone. >> i got a letter from a

constituent about the foreign account tax. his observation was that a large number of americans who are voluntarily compliant with it, with our tax code -- and this law is really detrimentally impacting those folks. obviously you're wanting to go afternoon people who are not, but what he was saying and what he's seen is that, you know, his bank accounts already been closed. he has other accounts. and specifically his bank cited this law as the reason. so he's losing different services and concerned about the accounts he has. and here he is trying to be compliant, he is being compliant and basically his comment to me was, i'm being punished for having an american citizenship. i'm following the spirit of the law, not just the letter, and here i'm losing services in other countries -- in countries i'm living that have these accounts because they're citing this law. what are you doing about -- so

you talked a little bit before about going after criminal investigations. what are you doing to make this easier on law-abiding citizens who are trying to comply, who are getting these -- we don't want them to have to disavow their american citizenship. >> that's exactly right. one of the things we're looking at as we start to get the information is impose little burden as we can on the people you have been talking about, that have been compliant for sometime. the problem he's running into isn't from the i.r.s. or from the united states. the problem he's running into is banks, some banks in some countries are saying, rather than actually determining who's native and who's a foreign-born participant, we're simply going to have -- deal with resident citizens. and they're saying if you're not a resident citizen we are not going to provide you services. that's not a widespread activity because banks are anxious in this global economy to deal with citizens wherever they're coming from, and we're not the only country engaged in

this effort. but it is unfortunate wherever a bank in a country acts decides they're only deal with their own citizens, you think it will be penny-wise and pound foolish because they're missing out on people like your constituent correspondent. whatever we can do for people who've already been compliant to try to make sure we don't impose unnecessary burdens on them and we deal with it as much as we can. we don't deal with foreign banks. >> quickly, if someone has a challenge, whether it's this person overseas or whether it's the small businessman i sat next to on my flight over here who did tell me -- he feels like he's been the -- he's received retribution for his political -- speaking out politically in the form of a beautiful audit, if someone has that concern or they feel like they've been unfairly targeted, who do they redress their grievances to? is there a third independent

group or do they have to come back to you and say, hey, you've done this unfairly? >> they can contact me. taxpayer advocates, they can contact her. the inspector general does a very good job of pursuing specific issues and complaints. my view is that those are important sources of information. i chaired the interagency council of inspectors general for three years while i was at o.m.b. and i think inspector general provide a valuable service and a lot of information. as i told the chairman earlier, i.g.'s don't create jobs. they look at them. anytime they feel that way, they should feel comfortable contacting the taxpayer advocate because i do think -- going back to this issue -- if i take 30 second -- is we're going to do 1,400,000 audits. some of those people are going to be republicans, some are going to be democrats, some are going to be people who never go to church, some of them who go to church regularly, and what's importantly -- and all we can

do is continue to emphasize it and actually perform is for those people to understand they're not getting that letter from the i.r.s. because of who they voted for, where they were last week at a symposium or meeting. they're getting that letter because there's something in their return that we're asking information about. >> to that point, we're going to have to say -- and i'll cut it off here -- you're going to have to prove it to us because they received that letter because of political ideology before. it has happened. that's part of what this whole controversy was. we look forward to you proving it to us. with that i yield back. >> it's intolerable for anybody to have it happen, and i think it's extremely corrosive for the tax system for people to think it might happen. they have to understand that we take this -- going back to the priorities -- my highest priority is to do whatever i can to restore whatever trust has been lost by the american public and the i.r.s. we should be viewed as we want people to pay the right amount, not more, not less. if you deal with us we're going to deal with you fairly. and the same way we would -- in

the same way we would deal with anyone else. >> we have some time for another round of questions. if anybody have. let me start that by asking two questions. e has to deal with the phi 501-c-4. been aid before is it's premature, the investigation has been going on and we didn't have all the information and i think this subcommittee will recall, we put a provision in ur markup that said we wouldn't spend any money that was appropriated under this bill to work on that rule and that was adrop thed by the full committee, full house. and it didn't make it into the omnibus bill. but there was concern when we have limited resources that maybe that's something we could wait until we had all the mfings. but that didn't happen and it's going along.

i assume you don't plan on stopping that anytime soon. so let me just ask you, when do you anticipate finalizing the draft regulation? for instance, are you going to finalize the draft before the november elections? >> i think the chances of it getting finalized before the november election is fairly slim. we have an overwhelming amount of comments to take into consideration. there will be a public hearing. there will be more opportunities for people to provide information to us. if there's being to be a regulation -- and i would say if. nothing is guaranteed when you start the process you end up with a product at the end. there will be a regulation and it has changes in it. it would very likely be republished for more comments. like i say, my hope would be at least some of the investigations will be done well before we get to anything, it looks like, finality in whatever regulation might come out. because i think it's right. we need to know what the facts were in that particular

circumstance. although, again, the general issue is how do we provide clarity, not just for the i.r.s.? my concern is if i were organizing aned a vow case organization, i would want clear guidelines how to run it and clear guidelines how to operate it. two or three years down the road, the more clarity we can provide to those people what you can do and what you can't do and how much you can do without being in jeopardy it seems to me very important. the facts and circumstances test and the unclarity about how much of political activity can you do means that everybody is sitting out there worrying and wondering, well, how does it get measured? is this going to count on one side of the equation or on the other side of the equation? if i'm above 45%, is that no longer primary? i just don't think it's helpful for us but it certainly isn't helpful for those running those organizations. >> it's fwoo to hear you don't think it will be finalized before the elections. i guess it could be, you know, if there's some speedup process.

but an equally important question. do you think these draft regulations that -- have they already produced a chilling effect as people decide, gee, maybe we better avoid political activities because we don't want to jeopardize our tax-exempt status or have it denied or revoked, might that happen? >> i don't know. i haven't seen any studies or surveys about that. we have tried to emphasize that we have revised and taken all the i.g. recommendations into consideration. we're providing we think appropriate training and oversight for the process. so we're encouraging people to continue to file if they have an interest in doing that, applications. in fact, we have a streamline process that was set up to deal with the backlog that says if you are not going to spend 40% of your time on what has historically viewed as political activity, you will get a streamline so you don't

have to worry about the backlog. >> the last question is -- i think you answered this a little bit. whether you'll wrap up all these loose ends and be one final regulation or maybe it might be a series of regulations that are, you know, adopted over the next couple years, do you have any judgment about that? >> i have no idea. from my standpoint, i'm trying to keep an open mind about the whole thing, see what the comments are. there is a complicated question of what should the definition, whatever it be, be applied to? should is be applied to 50-c-3, 5's, 6's, 7's? those are important questions you don't know the answer to. my instinct is the clearer it is, more simpler and administrativeable it is, the better off we'll all be. >> let me ask you one quick happy question and that is that i found out for the first time this last week that there's a program called free file that

the i.r.s. has in conjunction with a lot of folks that prepare tax services. and we had an event in my home district to try to make more people aware of it because i'm not sure everybody is aware, but if you make less than $58,000 a year you qualify for the free file and you can actually file your tax return for free because of some arrangement the i.r.s. has with this alliance of folks. and so they told me they have to renew that every five years with a memorandum of understanding. and so in an effort to make more and more people aware, they said 70% of the taxpayers might be aware or might be eligible for this free file. so tell us very quickly if you think that's a good idea and if you plan on signing a new memorandum of agreement to extend it for another five years. >> it is a good idea. i should take you out with me because every time do i a filing season discussion with the press i try to emphasize

that we have this agreement with 14 providers, all the major ones you would think of. you can go on the free file website, 100 million americans are eligible. you can pick whichever the 14 you like and you can actually file for free. you don't have to pay anything. you get the same treatment you would be if you were actually in one of their offices. it's a wonderful partnership. we do plan to renew it and try to give more visibility to it because i think taxpayers are comfortable without -- doing their returns without a provider should take advantage of this. it's one of the services we're happy to provide. >> you are from the i.r.s. and you are here to help us. so thank you for that. mr. serrano. >> thank you, mr. chairman. i hope you give me a little leeway because i may shock the committee and the congress. using a little more time to say i totally agree with mr. yoder. and i know that's shocking to some folks. i sponsored his bill,

co-sponsored his bill. as ranking member i participated in a voice vote on his amendment last year because with whether democrat or republican, i don't believe that our privacy should be lost. and so when you hear about government perhaps reading emails, that's unacceptable. unacceptable to us and it's unacceptable to our democracy. i'm beginning to hear some people say, well, if you have nothing to hide, it has nothing to do with anything to hide. it has to deal with the constitution and what it's been known for and the fact that people throughout the world would like to imitate who they think we are and i know who we are and we shouldn't have that. now, that doesn't mean i sign up with those who don't believe in a federal government or those who would like to disable government agencies to the point where they can't function, but on this we agree that americans have a right to privacy and that should be something we protect.

so i think the big headlines tomorrow in one of the papers is serrano and yoder agree on something. that's a good sign. >> i'm happy to be the catalyst for that. as soon as you tell me what hussings are. so let me get this straight. if you have 501-c-4 status, you are not supposed to engage in activities primarily political. if your activities is primarily political, you can register as a tax-exempt organization under another part of the tax code, section 527. the problem for some organizations is that if they do this, they'll have to disclose who their donors are as opposed to being registered under 501-c-4 where you don't have to disclose who funds you. so even though threes groups could be registered under 527 they don't want to do so

because they would have to disclose their donors. am i correct in that? >> that is correct. on a not putting you spot where you have to try to figure out what happened in the past -- was that part of the problem people doing this and there was some scrutiny and that scrutiny went overboard? >> i have not spent a lot of time going backwards because there is six investigations going on. there was something in 2010, public discussion and debate and political activities, so the volume went up to some extent. it became more visible. back to the question, for a long time nobody paid attention because most of these organizations weren't particularly visible as you go forward. but i do think, again, if the process is clear, then people who meet the process ought to

be able to make that choice. a major factor in the choice, i understand, if you were a 527 you could spend all your time and money on political activity. contributions would be visible. if you're a 501-c-4, social welfare organization, you can only spend a certain percentage of your time and nobody's quite known what the percentage is but you have to primarily be a social welfare organization not engaged in whatever the definition of political activity. >> now, do you think that or maybe i missed something, do your rules define once and for all what is political activity? do you think we'll reach the day that we'll define political activity? >> that's the whole purpose of the staff and the 100,000 comments back and the debate is an important one of what should be the definition and how much of that, whatever the definition is, how much of that activity should you be allowed to do before you jeopardize your status of a social welfare

organization. and it's not a simple -- simple set of questions. it's a complicated issue to figure out is how to deal with that in a way that's fair to everybody. i don't think -- i think the criticism needs to be considered in the comments. we ought to make sure this applies fairly to people and not viewed as singling out a group of people. which is why you have to look at which sections of the 501-c-4 statute if there is a rule if there one comes out, is applied to. there are difficult questions to say, somebody new to the game -- my goal would be, if it's clear, fair and most importantly easy to administer, it will be better for the i.r.s. and it will ultimately be better for the groups who are operating. two, three years down the road they don't need to continually find out, what does this mean? that's my concern about the facts and circumstances always have you in position to judge what are the facts and circumstances, what has

changed, what's somebody going to say, and that seems it's not good for them. it gets us involved in a lot of decisions i think we'd be better off not making. >> one quick last question. $200,000 in the appropriations bill for training, for enforcement of employees in the exempt organizations unit. please explain how you will use ese funds to prevent the types of things that happened? >> i share that concern that we train appropriately. the training session that went on was in 2010 and o.m.b. 2011 and 2012 has made it clear those sessions aren't going to happen and they have to be approved at a very high level. in the particular of 501-c-4's in response to the i.g. recommendations, we provide clearer guidance to employees. we provided more training. one of the recommendations was to provide training before any elections. we'll make sure that people understand what's appropriate and not appropriate in terms of

reviewing these organizations as we go forward. so we're comfortable that while the standard is still facts and circumstances, which is a little hard to know about, we're comfortable that we have much better training and much better visibility and oversight of this issue before it goes back to the 50 years, nobody paid a lot of attention to is which i think is part of the problem. >> well, i thank you for your testimony. i know you have a very difficult job ahead of you, but if it makes you feel any better, understand that all the years i've been in public office -- and it's 40 now -- i've always known and before that that the i.r.s. was never very popular agency to begin with. that and the i.n.s. were right up there with some folks. so, yes, you have a challenge to bring back the confidence the president wants, but, no, this is not new. it's been distrust for many years by the public and it's

something we need to keep working on. so thank you so much for your service. >> thank you. >> thank you, mr. amodei. >> thank you, mr. chairman. mr. commissioner, thank you for your answers. i appreciate that. i guess i want to just -- a couple of things. one is, if we talk about transparency and all that other sort of stuff, any plans to release the lerner emails to any of the other committees in the near future? let me tell you why i'm asking that. >> no, that's a good question. >> the context of the proposed regulation, the context timing-wise that it comes forward in is something i don't think anybody in this room can ignore. actually, you know the 50 years may not be very important, but on the heels of what has happened in 501-c-4's and then -- because if that hadn't come to light, the i.g. probably wouldn't have taken a look at that. you say going forward -- and i respect that -- we want to be open, transparent, all that

other sort of stuff. when you say, by the way, part of that we're going to define political activity. and god bless you for your courage. sounds like defining obscenity to me and the supreme court had heal of a time trying to do that a long time ago. good luck. i wish you success. but i sit there and look at that and say, the timing of when this is going and we are going to define political activity, with all due respect, that's something the legislative branch probably ought to undertake if it needs to be done because the regulation will have the affect of assuming whatever the 50-year-old law is when you define political activity in the executive branch. and we're sitting here saying i agree or disagree with it. if that needs to be done, then we ought to have that debate, with all due respect. lerner f those learn -- emails go to the committee? >> i would say. what's been in effect in the past 50 years, in 1959, it was an i.r.s. regulation that set in motion the definitions we have today. the law has been there longer

than that. you're exactly right. even if we end up with a regulation, the congress always has the authority to either change the statute or overrule the regulation. so it's not as if the i.r.s. and treasury have, you know, art blanchee to do whatever -- carte blanche to do whatever they want. in having further conversations of chairman camp of the house ways and means committee about your question and we are anxious to provide, as i told chairman camp when i met with him about a month ago and he gave me which i think was very helpful a list of things of the items they needed to have to get to closure, we're very anxious to get him all the information he needs to make his decisions. and so we're working with the committees. we're working with the senate finance committee as well and the other committees. we have four congressional ones going forward and -- >> and i appreciate that. >> and we want to satisfy them that they have the information they need to reach the determination they're making about the determination process. >> but let me tell you why i

think it's important. it's not important in terms of what did what to who or who shot the sheriff. it's important in looking at this regulatory proposed action and going forward, was this a law in the regulation or was this something out of the ordinary for purposes? because, i mean, to listen to this today, it's like, we're changing the regulation. it's not you. it's important in examining how the existing regulatory body was working before this latest issue came up, not in terms of who got caught doing whatever. so with that i thank you, look forward to visiting with you. thank you, mr. chairman, and i yield back. >> let me just say a couple of things to make sure we have clarity. the regulation was drafted pursuant to and after the i.g. report and the i.g. report was in, my understanding, had been under way when the i.r.s. acknowledged that in fact had been inappropriately highlighting organizations for -- 503-c-4 e 501-c-

areas. the draft of the regulation was a recommendation from the i.g. but it's still exactly right. we need to actually provide as much transparency as we actually can. my goal on the investigation, i say, to do whatever we can to get all the investigators the information they need for the determination process. when you start a new investigation saying, the regulatory process, that's, you know, a different investigation than what we've been dealing with for the last eight to 10 months. my only thought on that is we're happy to try to get you information on that but we can't do a series of investigations all at the same time. >> i guess it would be nice to say you can't pick out people based on their political philosophy and bully them and intimidate them and harass them. that would be a pretty clear rule. but -- >> i think that's the rule. >> well, i guess that got violated. >> i think there is investigations going on to find

out exactly whether they were and how. >> let me recognize mr. yoder. >> thank you, mr. chairman. and at this point i'd be happy to yield to mr. serrano to say anything else nice he'd like to say about me. >> don't push it. >> i want to thank my friend, mr. serrano, for his comments. as you can see on that issue, we have a strong bipartisan support. i know we have your assurances that we're going to try to fix that. there are a lot of issues i think we agree on in this committee and across congress that don't always get media headlines. and so it's nice to find more and more of those that we can work together on to fix in this country. i appreciate mr. serrano and other folks on both sides of the aisle working on that and other issues. i want to give another one, i think, maybe we have bipartisan agreement on. this comes from a constituent as i asked, what questions should i ask the i.r.s.

commissioner? this could be fun. what would you like me to ask? i think this is a very important question and one probably felt by a lot of americans. we talked this morning about the trust deficit that exists between the internal revenue service and americans, particularly in light of what i will term as much more efwriegeous than maybe we heard -- egregious than maybe we heard from my colleagues on the other side of the aisle, the abuse of the code to attack people based on ideology and we are going to continue to investigate not only your investigations you have internally, sir, but here within congress. people need to be accountable more son than they have been. that being said, john, a c.p.a. in my district, asks -- the tax code is very difficult to navigate. i think we would all agree with that. four million words, 10,000 pages. how can the i.r.s. make it easier for qualified preparers and regular taxpayers to efficiently manage their taxes

and provide quality service with the threat -- without the threat of onerous penalties for unintentional oversights or unintentional errors? how can there be less of an adversaryial -- when dealing with problem taxpayers as well? absent new dollars, because it's not just a function of money. how can you operate the i.r.s. in a different way to improve that relationship which, as you can imagine, for even a c.p.a. or a regular hardworking american who has to pay their taxes? it's a nightmare trying to figure out how to sort through all this. many of us in this country, i think on both sides of the aisle, need tax reform. i'd like your comments on that, sir. >> as i told the chairman earlier, i strongly believe in tax simplification, tax reform, to figure out how much they owe. most americans, if you can tell them what they oh, they'd be happy to pay it or not happy but willing to pay it.

when you impose all sorts of complexity and make it difficult, they are less happy. i think we have an important partnership with preparers and those who are qualified. we are concerned about unregulated preparers around the periphery who sometimes engage in fraud, sometimes are uneducated and really don't provide good service. but for people like your constituent, we have a lot of programs trying to reach out to preparers, trying to provide them as much information we can. i would hope that as we make the website more user friendly, it used to be clunky in the extreme and we're spending some of our resources there because we do think it's important for taxpayer service. but we value the work that preparers do. they are our outreach to clients. if we can have them comfortable that they understand the intory cassies of the tax code it would make it easier for their clients. one of the things we have a special tax preparer line you can call. one of the concerns even there

is the resource constraints have made people -- we heard from preparers they have to sit on the line longer and i don't think that's fair to them. if they have to wait half an hour, 45 minutes on the special line, you know, if they have five or six clients, i mean, they could waste a significant amount of time. so all i could say is we value the preparer community. we'll continue to reach out to them. best thing we can do for them is try to provide them as much information, guidance we can and we'll keep doing it. >> it's also a function of style. as you know, they take their cues from the person leading the organization. efforts you can make to ensure the relationships are less adversaryial and more supportive, i think we see this at all levels of the federal government where americans feel these federal agencies are not there to work with them but rather to work against them. and this is a common problem at every agency. i hope you'll do your best to fix the problems at the i.r.s. >> one of the advantages of this tour i'm on is i do get to talk to people doing the work.

as i say, in ffl i had a very nice and -- philadelphia, i had a very nice and productive meeting with revenue officers. that's where i got the willing to pay, unwilling to pay distinction. these are revenue officers that are sort of banging on your door to collect. we need to make sure if you're willing to pay and you have difficulties that we work with you. that we don't actually make you feel uncomfortable. in fact, their concern is the biggest problem they have is a lot of times people don't respond to notices from the i.r.s. because they're very nervous about it and concerned. their point was, we ought to have a way of making sure people understand that if you're just having trouble paying your taxes, we're going to try to work with you. the people we don't like are the people in fact are consciously trying to avoid paying taxes, try to hide their assets, moving around the country engaged in fraud. those people we don't have to be very nice to. but i think the point is well taken. if there is an honest mistake made, they are trying to pay, we ought to have a productive working relationship with them.

>> one more quick budgetary question. mr. amodei asked this question in a different way. i'd like to know and maybe you can follow-up with information for the committee. how many hours and how many dollars have been spent related to the controversy created by the investigation related to 501-c-4 groups last year? and the reforms or the changes that you're looking at now? and i know you said it's less than 1% of your budget. if you can let us know the impact. i know it's prior to your time there. this is time that could be spent elsewhere. number one. number two, how much money has been spent and how much are you needing and requesting related to the enforcement of the affordable care act and the impact that's having on your agency? i know several years ago and throughout the hearings the i.r.s. has repeatedly asked for hundreds of millions of more dollars to hire more agents to go out to make sure that small

businesses and americans are following the new government big mandates regarding this law. i'd like to know the costs to the i.r.s. and where you're funding those resources. >> i can answer that question. 014 presidential budget for the i.r.s. proposed $440 million for the affordable care act. $330 million of that was for information technology. none of that funding was provided so we are actually -- one of the constraints we have is we have to pay for the i.t. out of other projects. the $100 million is primarily for preparing for and dealing with information issues, designing of the systems, making sure it works. as you can imagine, one of the reasons it's my priority, i am committed that we will at this time next year have an effective filing season which means we will be effectively implementing our responsibilities under the affordable care act. we did that at the front end. rollout difficulties were not i.r.s. difficulties.

it's a major challenge and we're finding the funds. it's one of the things we have to find in other areas of the i.r.s. >> just a qualification point, mr. chairman. the amount requested is $440 million. how much is spent annually on the affordable care act? >> i can get you that in terms of how much we spent in the last couple of years, what we spent this year and the next couple of years. one of the issues that will happen to us, that i talked to people about is, starting late in the fall, but certainly during filing season next year, because it's a new requirement, we're going to have a lot of inquiries from preparers as well as taxpayers if they are in the area of being eligible for a premium tax credit and even if they aren't, making sure they are comfortable filling out that return. we started that public information campaign this week. we'll spend all the rest of this year trying to, again, get preparers and taxpayers comfortable that they understand. now, 70% or 80% of the

taxpayers won't have anything to say at all. they'll check a box. be glad to get you and the committee information over the last two or three years how much we spent for i.t. or personnel on affordable care, what we're spending this year and what we expect the requirements be in the next year or two. >> i'm sure when you next appear before us then there will be a lot of discussion of the dollars that are necessary. thank you. ms. herrera beutler. >> i want to ask about bonuses really quickly. we had in making sure that bonuses are being given to employees who actually shown improved performance or goals they met. did you -- i don't know if you've seen -- have you taken -- we put some report language together. have you taken our guidance within the house report language what bonuses will be rewarded to those who actualry

show improved employee perform -- actually show improved employee performance productivity? the pool is 1% of compensation. the performance judgments are made by managers, not by the most themselves, obviously. and history is that those awards have gone to about 2/3 of the employees. so 1/3 doesn't get any. the average size of those awards is about $1,200. so nobody is making a lot of money. if i could -- if i could respond to the 1%. in terms of how did i come to this decision, after the decision was made last year trying to reach the sequester levels that performance awards would not be paid to i.r.s. mployees, i -- o.m.b. issued a governmentwide 1% performance awards could be made. my predecessor decided while the contract provided with the bargaining unit, performance

awards, a pool of 1.75% that we had -- we thought negotiating ability to interchange that number and the number went to zero. the union then, understandably, filed a grievance, unfair labor practice and unfair lawsuit, all of which were pending when i started. in the course of negotiating a new agreement, which we're in the process of and i hope sometime in the near future we'll have that agreement settled, we've been negotiating about what the o.p.m. pool ought to be going -- performance pool ought to be going forward. >> what do you mean? those eligible? >> the bargaining unit, whatever thousands of employees it is, you take the salary and the question is, what is the performance award pool? doesn't go to every employee. >> wait a minute. these aren't merit-based -- >> these are performance awards based on merit. it's determined by the manager. the size of the pool available for awards was set by the contract at 1.75%.

>> that many will get a performance award? >> no. 1.75% was the pool. then, each individual was evaluated, a judgment was made and as i say, about 2/3 of them were eligible for awards, performance awards. the average award was about $1,200. 1/3 was not eligible because they had not performed, determined by their manager. the question is what's the size of the pool or whether there would be a pool at all. the decision was no pool. we ultimately negotiated a settlement with the union they would drop the grievance, the unfair labor practice and they would drop the lawsuit and we would pay not 1.75% into a pool for performance awards but 1%. in terms of how we were able to do that, we have in our budget postsequester funding for that because as a result of the sequester we've actually lost another 1,300 people. an an annualized basis, that

provided part of the revenue we need. we made more assumptions in our cuts and overhead expenses of about 4%. the arrangement with the union is we won't pay those awards in the fiscal year the way we always have done it. we pay managers two to three months after the fiscal year into the next one. we're moving the bargaining units in the next fiscal year. this year we'll pay one pool award. there won't be two. that's how it fits within the budget. so we had -- >> so can i really quickly, reclaiming my time -- >> i was going to give you back two minutes. if the chairman -- >> what i'm interested in understanding is -- i think if someone's eligible for an award because they've shown based on their merit and their hard work that they deserve it, i'm fine with that. my issue is understanding, you said that the managers make the decisions. so i assume you have, you know, you've issued fwideans -- guidance whereby they can use some kind of criteria they can

make this? >> there's an agencywide performance plan run by the human capital office. >> there is a follow-up for quality control to make sure there's not a manager saying -- the people have met these awards, because we have a seen people receive these performance awards who for crying out loud are the subject of investigations. i guess i want to make sure that moving forward that these awards are appropriate. that's where my question is. >> i've asked that question myself to make sure for managers as well as bargaining employees, when we pay a performance award, we need to be comfortable that the system is actually rewarding performance. employees know who's performing and who's not. if you're making awards for those not performing, that's not good for morale. we have a sophisticated system. i've said the same thing. we need to evaluate it to make sure we're comfortable that this just isn't -- everybody is above average. basically we need to be

rewarding performance. that's my final reason for making this decision. we can do it within the budget. these are people that haven't had a pay raise within four years. have been subject of difficulties over the last few years. 75% of our budget is people. without the people, the work isn't going to get done. part of the reason i'm out wandering around the country in the middle of the wintertime is to remind those employees who are dedicated to the mission that we value their work, they are terrifically dedicated, some of them have been around 20, 30 years working on this area and their only concern is can we give them the resources so they can provide better taxpayer services. with timing in a different way, i can send a signal to the employees that we value their work. it seemed to me that was appropriate. >> all right. with that i yield back. >> anybody have any other questions? i think we're about ready to

move into panel two. so let me just say to you, commissioner, thank you. i know how busy you are. thank you for being here today. we know what a difficult job you have. i think sometimes we lose sight of the good things that the i.r.s. does that you do every day under difficult circumstances. so collecting the revenues, talking to folks, answering questions, chasing down the bad guys, all the things that you do every day we very much appreciate and we're here to help you do that even better. so thank you for the time. this concludes the first panel and we'll have the second panel come along. thanks so much. >> thank you, mr. chairman. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] >> you can watch this second panel of this house appropriations subcommittee on

the i.r.s., follow that online, should be getting under way shortly, at c-span.org. the house is gaveling in for legislative work and among the bills this afternoon, one that would delay by one year proposed i.r.s. rules, limiting the political activities of certain tax-exempt groups. political leaders said this morning a vote of flood insurance will be put off until next week. it was supposed to be brought up tomorrow under suspension of the rules. live house coverage here on c-span.