for example the irs eliminated or reduced services at taxpayer assistance servers said although the irs to the source is a limited or reduced were in part the result of the irs anticipated budget cuts, the irs plans did not show to what extent the services that would lower costs. moreover it had to reverse certain decisions. tigta also found that the irs fieldwork clinton process is not designed to ensure that cases with the highest collection potential are identified. additionally changing the law to require third parties information returned earlier would provide the irs the opportunity to use the information contained on these forms to verify tax returns at the time they are processed rather than after refunds are issued. however, even if the third party add-on returns are received more timely, ma the irs still meet certain authorities to more efficiently and effectively use this data. generally the i rest must audit any tax returns and identifies with a questionable claim before the claim can be adjusted or denied, even if the irs has reliable data that indicate the claim is erroneo

have you made any recommendations to the irs how to combat the problem? >> we have. what i would like to do at this point is seek permission to include a report that we have conducted on the earned income tax credit into the record. >> without objection. >> suffice it to say as a refundable credit, all refundable credits that the irs issues difficult to manage. once the money is out the door it is so much more expensive for the irs to reclaim it. they have to make a cost-benefit analysis as to whether or not it is worth doing. there are ways the irs could address this which we recommended in the past and that included earlier reporting of earnings under w. 2 warm. so the earlier the irs has information on what people are paid the earlier they can address problems that they ultimately find. this is in conjunction with the requests that the treasury department as well as recommendations we have made and the irs has made for what is known as correctable error authority. for example, once tax filing season begins which is the second or third week in january depending on

and number of lenders request seven made to the irs. -- letters of request have been made to the irs. if you could bring the up-to-date on this topic. i met with you or your predecessor back in 2013 in which the topic was american legion post across the country that were being required to provide the dd 214 service-connected discharge document for every veteran that was a member of their post. my understanding was that my -- that practice was coming to an end. i just in fact, before i walked into this hearing, came from a meeting with the vfw me mbers who indicated that that is happening again across the country. figure being required to provide the dd 214 for every post member. that is something very difficult if not a possible to publish -- impossible to accomplish. that was something i was assured would come to an end, and then were recently being told they must provide the tax exempt status documentation from every post across the country, which they are incapable of doing, and have also been able to -- unable to receive a response to their inquiries to the irs. >> whatever the di

so the irs is not responsible for employment -- and lamenting the -- lawmakers will have the -- the irs is being urged to combat identity theft, reduce errors in tax programs, and generally reduced tax fraud. i think we need to take this into consideration as it relates to the budget this year and make sure the resources are there to do this. i am concerned the taxpayers will ultimately -- we need to get a handle on what has been happening with identity theft. it was found that 22 per at that -- 22% of the identity theft cases, the irs closed without taking the appropriate steps to fully resolve the victims' account. so during fy 2014, nearly 270,000 identity that returns of this type were closed. so if that reported rate them a 22% of that group about 60,000 taxpayers were burdened by having our case is closed in a premature fashion. what do we need to do to fix that. inspector general camus: that is a job that would fit in our portfolio. one of the things i always look at is the victim interface and how the irs are -- how the irs is processing the claims and the correspondence. i know

both for the irs and state tax commissions. thank you chairman and ranking member wyden. >> finally, i welcome ellen clem. she serves as a director of consumer education and outreach at the attorney general's office working to protect oregon residents from financial scams including the scams and schemes we are working on today. we welcome you here and look forward to taking your testimony. >> thank you senator hatch and ranking member wyden. every day i are stories from oregon residents about a wide variety of prods and scams. these stories have focused exclusively on the irs in posture scam. that is because as senator wyden mentioned, in 2014 this scam topped oregon's list of consumer complaints. last year we received more than 1300 twice the number as the next highest category. what is worse, the victims reported losses more than $75,000. we know from testimony presented today, that is the tip of the iceberg. that is why i hear today, to tell you the story of two victims, and to talk about what the oregon attorney general is d

details you will see it's not from the irs. e again reaching out to try and get information from you that will allow them to still your identity. there are unscrupulous tax preparers, we said if anyone says just sign a blank form and i will take care of it, you should go find another tax we. it's an ongoing issue, this year our filters things to our expenditures of some of the constrained resources on approved data theft are catching more refunds at the door. more people are getting letters from us questioning their 1040 filing who didn't file yet. i told him the good news is that means we stopped the refund at the door, not paid the refund, and haven't contended your account without false information. we will continue, it's a major issue for us. we get millions of attacks on the system every year. thus far, knock on wood, we have been able to defend against those. it's one of my concerns about funding constraints, that we could become even more secure with more funding in those areas. but it is a high priority and we will conti

she endured more than three years of inaction from the irs. after becoming a poster child for alleged irs abuse, her groups were finally granted tax exempt status. but during that long wait the irs kept her occupied in other ways. aside from the tax exempt business. >> right. >> you had more run-ins with the irs. tell us about that. >> the irs showed up to audit our business. and we'd never been audited before so here again you think maybe i just drew the short straw. and we went through the audit. those audits of our businesses led to personal audits. >> in fact, it suddenly seemed the government was interested in every aspect of engelbrecht's life. in 2010 they made a surprise visit to her group king street patriots to ask a series of questions. >> it was a domestic terrorism unit. and they wanted information on somebody that attended one of our meetings. >> you think the fbi thought you were involved with terrorists? >> i don't know what they thought. >> did they ever offer you an explanation as to why they were asking all these questions?

as was the case in the previous fiscal year in 2015, one of the irs's first actions after the enactment of their appropriations bill was to announce they would pay out $67 million in awards to employees. once again, irs management seems to have forgotten that their most important customers aren't their own employees. they are the american people. it's disappointing to see that the irs budget request is again unrealistic. the president's request for the irs for fiscal year 2016 is almost $12.9 billion, a $2 billion increase. under the budget control act, the discretionary spending caps for fiscal year 2016 limit nondefense spending to $493 billion. this represents an increase of $1.1 billion over the fiscal year 2015 level for nondefense departments and agencies. yet for fiscal year 2016 the irs has increased -- has requested, i'm sorry yet for fiscal year 2016, the irs has requested a base increase that is higher than the total increase available for all nondefense discretionary spending. also a request for an additional $667 million above the limit on spending set by current law. treas

the irs also continues to dedicate significant resources to detect and review the potential iet theft and victims. irs employees who work a majority of identity theft cases are telephone assisters who also respond to taxpayer's calls to the irs's toll free telephone lines. this has cricketed to the irs to timely respond to taxpayer e' written correspondence. >> we believe the irs rather than only allowing paper returns. tigtaest mates that this could prevent the issuance of more than 2.1 billion dplars in potentially erroneous refunds over the next five years. the irs could also make more-informed business decisions when determining how to use its limited resources. for example the irs eliminated or reduced services that taxpayer assistance centers although the irs stated that the services eliminated or reduced were, in part the result of the irs's an tis pated budget cuts. the irs plans did not show to what exat the present time the services cut would lower costs. additionally changing the law to require third parties to file information returns earlier would provide the irs the oppo

after the irs became aware that lerner's hard drives had crashed, what specific steps did the irs take to loegt anycate any backup tapes or the disaster discovery tapes. >> the disaster discovery tapes at the irs are recorded over until they are no longer usable so there is no technique or capacity at the irs to retrieve e-mails off those tapes. what we did do was go to everybody in the custodial list at that point of about 80 different people that ms. lerner would have been communicating with, because we're looking for all e-mails. we already produced all e-mails that were relevant to the determination process. we looked at all those 82 and took every e-mail that was to or from lois lerner, compared them -- >> but that would have been from the hard drive. from the backup tapes you had made the judgment they simply were not going to be recoverable, or did you actually have somebody investigate whether you could have backup tapes or you could find some backup tapes. >> our experts said we had no way, that they were not recoverable. it's taken the ig six months the last two or three mont

we don't have the impediments of the irs in that regard. and then a filer can check if there return has been accepted to be it you go to the tax website and fill out the authentication issue, and then you can find out whether or not it has been filed. we always remind people to please check to see if your return has been filed, and if you had not filed it and it has been please take this number and call it. senator warner: again, the disproportionate amount of fraud is at the federal level instead of the state level? mr. valentine: i would agree, it is just a matter of finding the funding -- mr. alley: i would agree, it is just a matter of finding the funding and getting together. senator warner: i know my time is up mr. chairman, but when we look at $5.8 billion in fraud, "the washington post" said we have seen a 37 times increase in fraudulent claims, we need to have that resource to fight that, and we need to have an administrative change or a legislative change by the iris to inform people that they know if there is identity theft, and i

the irs scam widespread in the valley and in my home area of northeastern pennsylvania, the irs home scam reaching more of northeastern pennsylvania. a lot of what you of heard and a lot of what you had direct experience with trying to stop. i would start with the assistant attorney general cerello. i'm interested in your assessment. i was in the eastern side of our state months ago with the district attorney, john adams. mr. adams was walking through some of the basic challenges and he emphasized among other things that the perpetrators were first highly organized and two often reside in jurisdictions far from the victims and beyond the reach of local authorities and even pointed to perpetrators residing in foreign countries. that is among the many challenges that much of your testimonies pointed to. i don't want to be estimate stick because i do what to get to the part of your testimony we talk about what has been happening with the justice department and the success you have had, but there is a sense because of the scope and gravity that we are not winning. and from a national pers

and how the irs processes the claims and correspondences. i know that auditors are doing work in that area as we speak. >> we will have this resolved for this tax season? so we are not prematurely closing cases? >> unfortunately, it is always in hindsight. the rearview mirror and the audit team looks at the work that was done during the following year. they need to make sure that chris is -- the cases are closed before they look back and see how cases were handled. i share the sentiment. >> anybody else have any thoughts? it seems -- we need to do something better than have taxpayers affected this way. >> i agree. it creates anxiety among the taxpayers. one of the things -- we also have services to work with taxpayers that have been comprised with their identities to make sure they have received comfort and knowledge that the return has been properly reflected and accounted for. we need to do the same thing at all levels. >> i know that practically every committee has i just ideas of -- has been asked to address the ideas of cyber security a

and next, the grievances against the irs. can't get the obamacare tax right.ax dollars to people in prison but now their own actions could land them in prison. why a government watchdog is warning of potential criminal activity by the irs. let us know what you think, send us an e-mail through gerriwillis.com. jeez, guys, shut up. [laughter] he's out there. there's a guy out there whose making a name for himself in a sport where your name and maybe a number are what define you. somewhere in that pack is a driver that can intimidate the intimidator. a guy that can take the king 7 and make it 8. heck. maybe even 9. make no mistake about it. they're out there. i guarantee it. welcome to the nascar xfinity series. ♪ ♪ i'm almost done. [ male announcer ] now you can pay your bill... ♪ ♪ ...manage your appointments... [ dog barks ] ...and check your connection status... ♪ ♪ ...anytime, anywhere. ♪ ♪ [ dog growls ] ♪ ♪ oh. so you're protesting? ♪ ♪ okay. [ male announcer ] introducing xfinity my account. available on any device. ♪ ♪ gerri: new outrage tonight over the

both for the irs and state tax commissions. thank you chairman and ranking member wyden. >> finally, i welcome ellen clem. she serves as a director of consumer education and outreach at the attorney general's office working to protect oregon residents from financial scams including the scams and schemes we are working on today. we welcome you here and look forward to taking your testimony. >> thank you, senator hatch and ranking member wyden. every day i hear stories from oregonians about a wide variety of frauds and scams. these stories have focused exclusively on the irs impostor scam. that is because as senator wyden mentioned, in 2014, this scam topped oregon's list of consumer complaints. last year we received more than 1300, twice the number as the next highest category. what is worse, the victims reported losses more than $75,000. we know from testimony presented today that is the tip of the iceberg. that is why i hear today to tell you the story of two victims and to talk about what the oregon attorney general is doing t

neil: in the meantime, the irs singing the budget lose. is singing your is next. ♪ at mfs, we believe in the power of active management. every day, our teams collaborate around the world to actively uncover, discuss and debate investment opportunities. which leads to better decisions for our clients. it's a uniquely collaborative approach you won't find anywhere else. put our global active management expertise to work for you. mfs. there is no expertise without collaboration. the . neil: talk about taxing and the irs complaining we have already heard how the agency has been whining about budget cut that have compromised its ability, but now the treasury is saying that those same cuts are going to create even more for you. they may not be able to get refunds out as fast were administered as part of the health care law that is their responsibility as well. is it me or is the government more concerned about its own tax headaches than your tax headaches and burdens in your rules to which you have to comply but you better fill out for tax forms

it is territory for the irs. give you a definitive vat -- answer but we are reporting out information in the very near future. >> the tax gap estimated at 450 billion is 17% on compliance rate which is striking witter your views of the adequacy of the strategy to narrow that down what needs to be dealt with to attack this sword deal with it with the declining resources available? >> the figure that is a virus produced is understating the problem. we believe the international aspect is not included in that figure. with those recommendations and we would continue to make his third-party reporting. there is the few figures and i beg your indulgence that according to the irs there is such a high correlation between tax compliance is a third party information reporting in withholding of taxes, the irs estimates individuals whose wages are subject to withholding report 99% of wages. they are estimated to report 60% of their income and with those self-employed individuals there reported to show just 19 percent of bin, so

congress said the irs should do this. it is a big question, but as the court said in city of arlington two terms ago, chevron applies to big questions as well as small. your honor raised this point about the need for clarity in a tax deduction and irs in the statutory reading of tax deductions, there is a learned treatise that describes that as a false notion. and it is certainly not consistent with this court's unanimous decision in mayo two terms ago that chevron applies to the tax code like anything else. and so -- >> if you're right about chevron, that would indicate that a subsequent administration could change that interpretation? >> i think a subsequent administration would need a very strong case under step two of the chevron analysis that was a reasonable judgment in view of the disruptive consequences. so as i said, i think you can resolve and should resolve this case because the statute really has to be read when taken as a whole to adopt the government's position. but i do take -- >> general -- >> if there are

the irs told the courts that there were no e-mails.there is no honor among thieves, and it's very difficult to ascertain what in fact, would be the catalyzing event to get this into the hands of an independent prosecutor. shannon, personally, i'm tired of waiting. for five years ooifri've watched this happen. we are putting together a dream team really, of world-renowned data scientists who are stepping forward and are ready to dig into the data. we're just going to call upon congress to release it to us and let us and let the american people who we will need en masse to help sort the data out give us a shot at it. let's return this to the people. enough is enough. >> yeah, there is a lot to go through. like we said we don't know how many of these are new or things we haven't seen before but you don't know what's in there. it could be nothing, it could be something that leads to the support of the allegations of what lois lerner is alleged to have done. she testified before she took the fifth and there were statements about whether she

they rolled back the alerting of the irs. and they've literally rolled back the protections, the things that were shutting fraud down. they literally say in that tape that fraud fell off a cliff. i mean, it can't be any clearer than that. if they had stopped the fraud, then allowed it again, to me, makes them accessories before the fact. gerri: that's something we'll have to wait and see. there's a lot of interest in this story. i have to tell you, a lot of people are investigating this. i'll show you some numbers that will be instructive. turbo tax is huge. 29 million customers. this is the big kahuna. the proportion of suspicious customers. look at this. who successfully filed tax returns. in 2010, 900,000. jumps to 2.9 million in 2012. what does that tell you adam? >> well that tells me that the filtering systems aren't filtering. and that as was said, that when they see suspicious activity and they see, for instance multiple people using the same social security number, i mean, what does someone have to do? run a billboard

." >> like the irs i father that activists at the doj and the approximate fidc are abusing their power and authority and are going after legal businesses and in effect they're weapon eyesing government to keep their ideological beliefs. >> weapon eyesing the government. strong words from republican congressman shawn duffy, how he describes operation choke point. this is a justice tept program meant to choke out access to banking services to those firms considered high risk for financial fraud. but, mike, you agree with the congress pan that it was used to go after political enemies. >> absolutely david. duffy is 100% correct. this is another abuse of power by our lawless president. if he feels these businesses have ton something wrong they should be put in front of a judge and jury. the president should not be con scripting banks to go after people he doesn't like. >> look at the average americans, the folks that are caught in the middle of all this. play the tape. >> my credit union called me and told me that i had to come in and close my account because i deal with in guns. >> i rece

the irs never looked for them. tor general learns about it and recover the males in two weeks took two weeks to find them. they have been sitting there and there are thousands of e-mails, the guy looks through the end some of ones they already obtained, the house committee but the inspector general is looking for potential criminal activity. stuart: jim jordan, republican of ohio is on the show 45 minutes ago suggesting there may be signs of criminal activity within those e-mails. that is the late breaking story. are you familiar with this? >> yes. they are definitely looking at this because it has been years since the scandal broke and people were looking for answers. the e-mails should provide some to them. it is a shame it has taken this long. stuart: i want your opinion in ten seconds. do you think in the next 18 months up to the very end of president obama's second term in office in that timeframe we will get to the bottom of the irs scandal? >> i hope so. stuart: do you think we will? >> i think the house comm

to appear they were the irs. they sometimes know personal information, insist you owe back taxes and demand money with a prepaid cash card or wire transfer. even one of the treasury department's top officers got a call demanding he paid up. >> supposedly $750. >> or they are going to arrest you? >> correct. >> targeted across every state with more than $15 million stolen. each victim has lost on average $5,000. >> the fraudsters have clearly upped their game and we must do the same. >> this week congress held hearings how to stop it. >> when the money dries up the criminals will go away. >> the irs always sends a letter through mail first and never call. catching these fraudsters will be extremely difficult and may not be able to do it. the only way it will stop is by convincing people to hang up the phone. john. >> adam levin. good to have you with us. >> good to be here antonio. >> gullibility one of the victims very smart victims one was an nfl player had a radio show. these scammers were effective the way they

should conservatives expect the same treatment they got from the irs? >>> welcome to "the journal editorial report," i'm paul gigot. hillary clinton broke her silence this week on the scandal surrounding her use of a private e-mail address while serving as secretary of state. calling it a matter of convenience and claiming she complied with all state department rules. take a look at some of the highlights from her tuesday press conference. >> when i got to work as secretary of state i opted for convenience to use my personal e-mail account which was allowed by the state department because i thought it would be easier to carry just one device for my work and for my personal e-mails instead of two. we went through a thorough process to identify all of my work related e-mails and deliver them to the state department. at the end, i chose not to keep my private personal e-mails, e-mails about planning chelsea's wedding or my mother's funeral arrangements. i did not e-mail any classified materials to anyone on my e-mail. there is no classified material. >> her

have you made any recommendations to the irs as to how to combat the problem? .. now there are ways that, that the irs could address this which we have recommended in the past and that included you know earlier reporting of earnings under, the w2 form. so again, the earlier the irs has information on what people are paid the earlier they can address problems that they ultimately find. but this is in conjunction with the request that the treasury department as well as recommendations that we have made and the irs has made for what is known as correctable error authority. so for example you know once the tax filing season begins, which in effect is the second or third week in january depending on the year people can file their tax return and seek a refund. the irs is not required to receive from the payee the employer or whomever for another three months, sometime in march. that same information on that individual. now, if the individual claims is different amount than what the employer claims that individual could receive more money and then receive a refundable cr

this compound on all the other things with the irs. the fact that recently, we discovered there were more takes found a few weeks ago that contain lois lerner e-mails from 2009-2010 when it started. all this happening from the internal revenue service. they have a lot of explaining to do. >> he said i thought they turned over all the e-mails. yes he has a lot of explaining to do. whose team is he on? is he trying to help the taxpayers have a system that works fairly and trying to get all the information or on some other team? >> he told us back in june that the back uptakes no longer existed. two weeks later the inspector general drove to west virginia and found 700 back up tapes. 32,000 of lois lerner's e-mails then 400 more back up tapes. they were going through the sequence of documents and a document was missing. they inquired ant got a document that led them to 400 additional tapes. he said in june no back up tapes exist. since that time we have found 1100 back up tapes. 400 of them discovered after we got a document they tried to

that the court might rule against the irs? >> congressman let me start by saying that the affordable care act is working and the tax credits are working. millions of americans now have access to affordable health care coverage. >> but the court will not be ruling on that as expect of the aca. specifically the irs ruling. >> we believe that we have -- our lawyers have made the arguments, the justice department has made arguments that we think are compelling to the court and we look forward to a positive ruling. but the thing that we just have to recognize -- >> but mr. secretary, i don't want to interrupt but i want to make sure we understand. i'm not asking for a prediction on the court ruling but in the possibility that the court will rule for the plaintiffs, what planning is treasury department or the irs doing to deal with that type of ruling? >> congressman, there is no question but that an adverse ruling would strip millions of americans of health care coverage due to the loss of the tax credit. >> so you would be based on

you should also look at the irs to see if the enrolled agent is licensed there.t type of training they have had, how long they have been doing this and what types of returns they work with. do they work with a lot of people in your situation and that's how you can check them out, as well. >> when do i know if it is better off for me to file on my own? >> if you are a do it yourselfer you may want to do it on your own. one of the great things the irs is offering is something called free file and if you fall into a certain income level you are able to get free tax preparation software from some of the big providers out there and you don't pay anything for it. this is good if you have a simple return, just straight 1040 form. then you definitely want to think about maybe doing it on your own because you would be able to do it perhaps for free. if you don't qualify for that free software you could get free forms to fill out and send it in online through the irs website. and you can also just go to one of these software companies, get some of the software whether turb

congress said the irs should do this. it is a big question, but as the court said in city of arlington two terms ago, chevron applies to big questions as well as small. your honor raised this point about the need for clarity in a tax deduction and irs in the statutory reading of tax deductions, there is a learned treatise that describes that as a false notion. and it is certainly not consistent with this court's unanimous decision in mayo two terms ago that chevron applies to the tax code like anything else. and so -- >> if you're right about chevron, that would indicate that a subsequent administration could change that interpretation? >> i think a subsequent administration would need a very strong case under step two of the chevron analysis that was a reasonable judgment in view of the disruptive consequences. so as i said, i think you can resolve and should resolve this case because the statute really has to be read when taken as a whole to adopt the government's position. but i do take -- >> general -- >> if there are

. >>> it is tax season and the irs is warning about a sophisticated imposter scam sweeping the united states. scammers are praying on taxpayers over the phone and the irs says the scam is costing the americans millions of dollars. janine. >> reporter: there have been numerous cases here in the bay area where people are getting phone calls from fake irs agents claiming that they owe large amounts of money in back taxes. here's one of the phone calls. >> you have miscalculated your tax. >> oh my god how much? >> the amount is $4,550.95. >> what do i do? >> reporter: that is a call that a victim recorded and posted on youtube because she wants to make other people aware of what is going on. the scammers threaten arrest or deportation if the victims don't make a payment. the thieves can manipulate caller id to appear as if they are calling from an irs phone number. federal officials estimate over all victims have lost $15.5 million. >> very upsetting. i've had sleepless nights over this because i feel like such a fool. and i feel vulnerable. >> federal officials warn they contact people f

that the court might rule against the irs? >> congressman, let me start by saying the affordable care act is working and the tax credits are working. millions of americans now have access to affordable health care coverage. >> but the court will not be ruling on that aspect. beyond specifically the irs ruling. >> we believe that we have -- our lawyers have made the arguments, the justice department has made arguments we think are compelling to the court. and we look forward to a positive ruling. the thing we just have to recognize -- >> but mr. secretary, i don't want to interrupt, but i want to make sure we understand. i'm not asking for a prediction on the court ruling, but in the possibility that the court will rule for the plaintiffs, what planning is the treasury department or the irs doing to deal with that type of ruling? >> congressman there is no question but that an adverse ruling would strip millions of americans of health care coverage due to the loss of the tax credit. >> so you would be -- based on that, starting

now, the irs, if it's the real irs, will contact you first by mail not by phone or with a robo call and david, they will never demand immediate payment over the phone. >> good times, as always. mara, thank you. >>> when we come back here tonight, the american astronaut back on solid ground this evening. >>> also the fire ball in schools over america. nasa weighing in tonight. >>> and a question. sweet oral unpate unpatriotic? the foe toll of the newborn in the american flag tonight sparking a heated debate. a humpback calf and mother are almost inseparable. she lifts her calf to its first breath of air, then protects it on the long journey to their feeding grounds. one of the most important things you can do is help the next generation. at pacific life, we offer financial solutions to accomplish just that. ask a financial advisor about pacific life. the power to help you succeed. doing this all day, my feet and legs got really tired. so i got dr. scholl's massaging gel work insoles. they absorb the shock of working on my feet all day. i feel energized! i'm a believer. dr. scholl's massa

the irs get the resources it needs. every year they reclaim $2 billion in funding and revenue through the eitc compliance. and we look forward to doing better but it is available to the resources available. we hope there are the resources to doing it properly. >> so my point of asking is that many of us agree there are other on legislations that this reform could be applied to. let's say childless adults. so if we can contain it within itself, that would be an enormous step in the right direction and that could perhaps lead to a bipartisan common ground success. >> we very much look forward to working together on the childless adult provisions. it is something that i think would fill an enormously important gap in the current system. i don't know whether the costs would be covered by it but would you be happy to look at it and work with you. >> thank you. mr. levin is recognized. >> thank you. mr. chairman you and i have had a few discussions about the issues and all of us want to do more of that. so if i might, i want

the irs computers have all your historic data. we have a change we see the computer light up and finally, being self-employed in and of itself is an audit red flag. the reason is the irs has said that in the past, so many people underreport income and overstate deductions when self- employed. >> what do we need to know about deductions? >> reporter: i know everyone loves to pile them up but remember, if the deductions on your return are disproportionately large compared to your income, that return could get flagged. so just be sure that you have a lot of documentation for all of the deductions. if you are risking taking a home office deduction, remember, whatever you take, it has to be for work only. it's not like you're sitting at your kitchen table checking your email. that doesn't give you a deduction. finally, very few people use their automobiles 100% for business. if you claim that, it is going to be a turbocharged red flag. >> okay. what else should we know, jill? because we're less than a month -- well, about a month away

and one of the things great things the irs is offering for years is free file. if you fall into a certain income level you are able to get free tax preparation software from some of the big providers out there and don't pay anything for it. and this is really good if you have a very simple return, just a straight 1040 form. 1040-ez is even better. then you would want to think about doing it on your own because you could do it perhaps even for free. even if you don't qualify for the free software you can get free forms to fill out and send it o in online through the irs website. irs.gov and you can also just go to one of these software companies and get is softwa software, tu hr block or just do it there. >> that's the show for today. thanks for joining me. next week, we'll be talking to online real estate giant zel low about the changing face of the real estate. keep it here. have a great one and i'll seal yo >>> lights, camera, access. >> madonna's new number one album. >>> was monique back-balled from hollywood? everybody, welcome to "access hollywood." i'm sha