the eitc has been called one of our most important antipoverty programs for that reason. we provide about $67 billion every year in refunds to over 27 million beneficiaries. the numbers paint a picture that i think is often overlooked by the public. the irs, in dealing with those numbers, has to be a flexible, can-do agency with a remarkable group of employees. the fact is not overlooked by congress. whenever they pass a new program, the irs is often given the job of implementing the legislation with or without funding. these legislate mandates, as we refer to them, not only include the eitc and the affordable care act, but other recent programs like the able act, the health coverage act, and the debt collection act. we certainly have areas where we can improve, but at the end of the day, congress knows when they give us a job, we'll get it done. and that's something we've seen throughout the years. a wonderful example of that can-do spirit is sitting up here on the stage with us. carolyn tavner who was introduced earlier. she's been an irs employee for four decades and c

it's mechanics. >> one of the areas we have struggled with improper payments in the eitc. anytime you have a tax credit that is refundable, it is a magnet. it's a target for identity thieves, a target tfor preparer who are fraudulent. the advanced premium tax credit in the present system has not presented that problem because the money doesn't go to the taxpayer. the money goes to the insurance -- >> let me interrupt. the proposal that susan i put forward would have an account created that would be used for health care or health insurance. it is subject to irs regulations vis-a-vis thoughts? >> anything that causes the money not to disappear is a significant advantage in terms of dealing with the risks of improper payments. >> the concern at the eitc is the kind of paradigm in which we should view these advanceable tax credits. it doesn't go directly to the individual. rather it is somebody who has fiduciary responsibility. >> right. >> let me ask you something else because i have limited time and the chair is kind of wrapping me. another concern has been -- i have a healt

koskinen: one of the areas we've struggled with from the start is improper payments in the eitc. any time you have have a tax credit that is refundsable, that is you get it whether you owe taxes or not, it's a magnet. a target for identity thieves, a target for criminals. a target for preparers who are fraudulent. hanging out signs saying, i'll get you a big refund. the advance premium tax credit in the president's system has not present that problem because the money doesn't go to the taxpayer. the money goes to the insurance -- mr. cassidy: the proposal that susan collins and i put forward actually would have an account that would be created that can only be used for health care or health insurance. so that kind of bridges the difference it. doesn't go to the individual. it is under the individual's control. but then subject to i.r.s. regulations, vis-a-vis h.s.a. regulations, thoughts as -- in that context. mr. koskinen: anything that causes you to be able to not have the money, just disappear into somebody's bank account, is a major significant advantage in terms of dealing w

one of the areas we have struggled from the start is improper payments in the eitc. any time you have a tax credit that is refundable, that is you get it whether you owe taxes or not, it's a magnet. a target for identity thieves, target for criminals, target for preparers, who are fraudulent. hanging out signs, saying come with me, i'll get you a big refund. the advanced premium tax credit in the present system has not presented that problem, becauses money doesn't go to the taxpayer. >> let me interrupt. the proposal susan collins and i put forward would have an account that could only be used for health care or health insurance. that would bridge the difference. it doesn't go to the individual but under the individual's control and subject to irs regulations, hsa regulations. so thoughts in that context. >> anything that causes you to be able to not have the money just disappear into somebody's bank account is a major significant advantage in terms of dealing with the risks of improper payments. >> so if i may say, then, the concern that eitc is the kind of paradig

detalles de los ingresos de sus clientes, para reclamar creditos que no les corresponden, como el eitcnas de ingresos limitados, hasta usar los datos privados de sus clientes para hacer declaraciones de impuestos sin que ellos lo sepan, para luego recibir y quedarse con parte o todo el reembolso. en esos casos, los clientes no sabian lo que sus contadores estaban violando la ley, pero, el departamento de justicia reitera que usted es responsable de cualquier documento que firme, aun si alguien mas lo llena y envia, asi que, si su preparador le recomienda pedir creditos por gastos medicos o educativos que usted no utilizo, o inflar las cifras para solicitar mayores reembolsos, tenga mucho cuidado. declarar deducciones que no le corresponden, como -donaciones a caridades, contribuciones a companias, o gastos de negocios excesivos, incluyendo gasolina o kilometraje para el que usted no califica, son banderas rojas que levantaran sospechas, y muy ---le recordamos que si tiene un caso para telemundo 48 responde nos puede llamar al 844-408-4848. lorena --el peligro de un corto circuito ha ob

these mandates as we refer to them include not only the eitc and affordable care act but other programs like the health coverage tax credit act. we certainly have areas where we can improve but at the end of the day congress knows when they give us the job we'll get it duchblt that done. that's something we have seen throughout the years. she currently heads the irs office that administers the affordable care act. the average taxpayer has probably never heard of people like caroline. for example, anyone who has ever used the form 1040 ez or the short form file their taxes has caroline to thank. back in the early 1980s she was part of a small team that was asked to find a way to make tax filings different. caroline and her team developed the 1040 ez. it is fewer than 20 lines. you can fill it out in no time. you always hear a lot around tax simplify case. it has made life simpler for millions of people. through the years it's also saved people millions and millions of hours because they don't have to work through the 1040 form. some times we joke caroline is the mother but she has done m

the private sector has really figured this out, because fraud is not just a problem with eitcs, it's any type of payment you're making as ais company and if you're in the payments business, there is a lot of fraud out there, and they have made great strides and have limited substantially and the new technologies that are coming onboard are really incredibly impressive.ar to what extent do you think we need to just be looking at modern payments technology? it seems as if the irs is not using any of it. to both mr. russell -- or to russell, mr. george and to mr. dodaro. >> well, thank you, sir. i will say this, the irs is not in a position to not disclose mistakes that occur or fraud that occurs when it's questioneo by congress or the i.g. or gao. i worked in the private sector, senator, and i'm not questioning your point directly, but a lot of times banks won't disclose when their systems are broached because they don't want to shock stockholders or regulators or what have you. whereas, again, the irs is not in that position. there's no question that the irs in theory could implement

that way they get training in eitc. why would that no work? >> senator, before responding, and i neglected to do this at the outset of my comments to questions. since president reagan, every president has issued a directive indicating that tax policy is within the sole discretion of the assistant secretary for tax policy, and so the answers that i'm giving you is not on behalf of the entire department or the administration. >> that's fine. take that into account. >> there's no question that that is an idea that is worthy of consideration. but as you pointed out, there was a sensible proposal to have certification, and for some reason -- again, whether it was the industry or others, it was not accepted. >> mr. chair. >> senator langford could add on to this point. we recommended to irs several years ago that they should regulate the tax preparers. they went ahead with the proposal. it got taken to court. the court found they didn't have the statutory authority. i think congress could give some authority in this area. it could be a good program,

though, again, eitc a very good program and social security is, essentially, eliminating elder poverty we've made some real advances. so, you know, i don't want to -- i think it's a copout to just blame it all on trump and his minions. those of us who have a deep commitment to reducing or eliminating poverty have to come up with better solutions, and they're very elusive. the nbi is very tempting because one virtue that it would have is you cash out all or many of the programs that now purport to help the poor, cash them out and write a check to people. and eliminate all the bureaucracy and regulation that is now in place to draw these very fine distinctions and make these very difficult can decisions. difficult decisions. but as henry aaron emphasized in the passage that i read, that's very unlikely to happen, and it's not clear to me that that would be an altogether good thing. i think one does have to worry about work incentives, and i don't think it's the case that just because we have a low unemployment rate today everybody who could be employed is employed. that's certainly not t

that way they get training in eitc. why would that no work? >> senator, before responding, and i neglected to do this at the outset of my comments to questions. since president reagan, every president has issued a directive indicating that tax policy is within the sole discretion of the assistant secretary for tax policy, and so the answers that i'm giving you is not on behalf of the entire department or the administration. >> that's fine. take that into account. >> there's no question that that is an idea that is worthy of consideration. but as you pointed out, there was a sensible proposal to have certification, and for some reason -- again, whether it was the industry or others, it was not accepted. >> mr. chair. >> senator langford could add on to this point. we recommended to irs several years ago that they should regulate the tax preparers. they went ahead with the proposal. it got taken to court. the court found they didn't have the statutory authority. i think congress could give some authority in this area. it could be a good program,

slowed the pails of refund early on but the pace access railed with the release of $50 billion in eitc and act refund after february 15th. the new requirement to hold earned income tax credit and child tax credit returns and another change enacted by congress to accelerate the filing day of forms w2 have helped the irs spot incorrect or fraudulent returns. receiving w2s earlier also allows us to release refunds to compliant taxpayers more quickly, avoiding unnecessary delays inch record to phone service, we are again seeing an improvement level of service on toll free lines as we did during filing season 2016. our phone level of service is returning've 76%. we anticipate the average for the filing season will be 75%. the improvement is the direct result of additional funding grantedded by the congress in 2016 to improve service to taxpayers and strengthen cyber security and expand efforts against i'd the. the funding freed up resources to reduce the corporations inventory. the inventory totaled more than 850,000 pieces 60 corporations the end of fiscal 2015 and that's knew down to 660,

>> i think the big pieces we want to do is expand the eitc massively.nd. a larger standard deduction. there's a lot of things one can do that are not necessary ply in the cards right now but if you want to do the right thing i think that's the way to go. >> if the rate was say 25%, does that -- you think that doesn't move the needle? >> i think it totally moves the needle. we should not like the perfect be enemy of the good. we would like to get it to 18 or 19. if it gets to 25 i'll take it. it's better than tearing down things. >> talk to us about the tearing down piece. what do you think the border adjustment tax would do to our economy? >> i think it would do a lot less than people think. in part because we are already kind of a quasi-consumption tax. we're halfway between. the idea we're going to get lots of new investments because of this is not exactly right. debt finance investment in this country today has a negative tax rate. it would go to zero. the idea that we're going to get a huge growth is not true. >> i think paul ryan -- we've had david

you think of the irs's capability of administering an advanceable we fundable tax credit, using the eitc and companies that were paid off under the affordable care act. >> i would start out by saying -- >> i am just talking mechanics. >> we are concerned one of the areas we struggled with is improper payments in the eitc. any time you have a tax credit that is refundable, that is you get -- it is a target for preparers who are fraudulent. the tax credit has not presented that problem. it goes to the insurance. >> the proposal we put forward would have an account only used for health care or health insurance. it kind of bridged the difference. it is under the individual's control. subject to irs regulations, so thoughts in that context? >> anything that causes you to be able to not have the money disappear into somebody's bank account is an advantage in terms of dealing with risks of improper payments. it is somebody who has responsibility. >> that's why i said policy decisions are your decisions. >> so let me ask you something else. another concern has been, i have a health savings accou