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tv   Key Capitol Hill Hearings  CSPAN  June 20, 2014 10:00am-12:01pm EDT

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>> the gentleman has reserved his objection spent i wanted to you why. it says in response to your questions, irs informed treasury in 2014 that ms. velazquez to e-mail box appeared to contain very few females prior to 2011. .. -- few females prior to 2011.
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a couple years ago and misleads us and says no targeting is occurring and then it said it was a few and then it said it was also unprogressive. all of those things had been proven untrue. this committee sent a criminal referral of possible criminal wrongdoing just a month ago the justice department and we have heard nothing. you bury any 27 page letter to the senate asking for them to conclude the investigation that you've lost lois lerner's e-mails during the time in question because of a hard drive crash. monday our investigators asked your agency whether any other
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hard drives crashed and we learned six others of people investigated involved. you didn't tell us that. >> we told you on monday. we asked you. >> and what to do with that information? >> you told us monday because the ascii of any other hard drives crashed. this is unbelievable. you told us we were going to give us all of her e-mails and you learned in february about this crash. hispanic i didn't learn in february -- >> i'm not asking you a question i'm submitting a statement. you are the internal revenue service. you can reach into the lives of hard-working taxpayers and with a phone call and e-mail or letter you can turn their lives upside down. you ask taxpayers to hand in seven years otheseven years of l tax information in case they are ever audited and you can't keep six months worth of employee e-mails? and now that we are seeing this investigation, you don't have
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the e-mails, hard drives crashed. he learned about this a month ago and we had to ask you on monday. this is not being forthcoming. this is being misleading again. this is a pattern of abuse, a pattern of behavior that is not giving us any confidence that this agency is being impartial. i don't believe you. this is incredible. >> i have a long career. that's the first time anybody's said they don't believe me. that's fine. we can have a disagreement. i'm willing to stand on our record and remind you it wasn't buried in 27 pages. most of those exhibits when asked about the custodians we advise you -- >> being forthcoming -- being forthcoming as to say you know what, investigators --
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>> let him answer the question. >> i didn't ask any question. him a question. >> yesterday. >> gentleman. i realized disrupting a hearing sort of -- >> come on. hispanic the gentleman from wisconsin -- >> i do not control the. if we investigate criminal wrongdoing in the targeting of people based on the political beliefs and the e-mails in question are lost because of a hard drive crash that is apparently not recoverable which of the it professionals would question and you don't tell us about it until we ask you about it, that is not being forthcoming. i yield back the balance of my time. >> the gentle man hasn't yielded back his time. >> thank you. mr. neal is recognized. >> i'm going to let you answer the question. >> mr. ryan tried to leave the
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impression that if we revealed the information about the hard drive crash. first i would reiterate the information about the hard drive crash is in the e-mails that you may have had for some time. second, we produced the public reports telling you about the e-mail loss on our own. it wasn't in response to a question. thirquestion. third-party alert on monday morning about the custodians. our staff was asked on monday afternoon if there was an indication to any hard drive problem. the next morning the committee put out a release of searching and leaping to the conclusion therefore that e-mails have been lost, particularly nicole flax. as we continue to work -- and we have more to do -- there is no evidence that her e-mails were lost. we are responding and what we are trying to do as the letter suggested is as soon as we are evil to give you a full picture, we are providing that. it's not in response to the question. question. that was in a public report and provided.
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you have 770,000 pages and you will have 67,000 lois lerner e-mails, $24 of the e-mails in the period that it crashed have not been lost and they will be produced to you. >> commissioner come at this point may i ask you a question and i will give you more time. there is a distinction, yes, the committee didn't know about the hard drive but we didn't know about the server. there is a distinction. we didn't know about the server and what came in the carbon copy of the letter that he sent to the senate, the server means they are lost forever in a hard drive crash doesn't necessarily mean that the e-mails are lost forever, so there is a significant distinction that hasn't been made yet today. >> would you like to respond? >> you may. >> that's an important questions in one of the reasons we did not immediately say we discovered a hard drive crash is because as
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you noted a hard drive crash does not mean that e-mails have been lost forever. and in the case of lois lerner, 24,000 of her e-mails were not lost. they've been found and they will be produced. you have 5,000 already and you have 24,005 by the end of the month. when the hard drive crashes the e-mails do not necessarily disappear. her e-mail account in any e-mails in those accounts, which we could find in the period, were included and did not crash. >> thank you commissioner. i must tell you based on what we've heard so far today if you came in here and say that you've agreed with everything that the republicans have suggested, then they would say we don't believe you. they have come to a conclusion, not based upon the facts, but upon what they might promote as a conspiracy. the only thing that is missing is oliver stone but there's time for that because there's an election five months from now so there will be plenty of opportunity for them to do that. having served on this committee
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for a long period of time, you have an individual here who has a distinguished career, who served in republican and democratic administrations, coupled with the fact he took an oath today. unless those here didn't hear him take the oath or witnessed him taking the oath, for him to take the oath and then have people suggest him don't believe you. that i isn't the way this committee has functioned in the past. and it off not be the way that we function going forward. now just a couple of quick questions and then i want to offer something to you. the tax investigator general has said there wasn't a cover-up; is that correct? >> that's correct. it's not a conspiracy. based on the consortium that he has made? >> that's my understanding. >> at the moment there is no smoking gun linking the administration to lois lerner sex >> that's also my understanding. >> now, i would hope that at some point, the committee might spend a hearing may be a morning
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talking about the success that you have had with the off shoring accounts for the individual taxpayers, but the numbers are pretty stunning in what you would be done to collect from those that have voluntarily complied in switzerland and other tax havens and it's a story that i would hope he would have an opportunity to talk about. mr. camp is correct when he says the tax system works on the basis of people believing that there is equity in it. and that everybody carries their burden and spending some time on offshore and spending some time on compliance by teak we got for the hearing. but i know that it doesn't fit in the determination that was me this morning for the purpose of this hearing. thank you, commissioner. >> okay mr. nunes is recognized. >> mr. commissioner in september of 2010 a letter from the chairman asking for an investigation of a political five o. one c. -- 501(c)4.
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>> i don't know where it would have gone. >> but assuming that it did she would have responded. >> and the agency i haven't seen the letter and i don't do what the response would have been. >> would we have that e-mail? what we have that response? >> of the response wouldn't have been by e-mail. but there would be a letter back to the senator. >> if the letter comes in from the senator there should be a response back. >> then there was in october of 2010, senator durbin wrote the commissioner or urging him to investigate the conservative groups specifically crossroads gps. that letter would have likely been sent to ms. lois lerner. did she ever write a staff that? >> i have no idea. >> would we have any of the e-mails associated with that? >> if she wrote back there would be a hard copy any letter in the
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final as to what it said. >> and during the period before the crash, the liberating groups, democracy 21 repeatedly wrote to the irs asking for an investigation of the conservative leaning groups. did lois lerner ever write an mac? >> i don't believe she wrote them back or not. >> would you have a copy of those letters? could we get those letters? >> if we have them they've probably already been produced. >> in june of 2011, chairman camp sent a letter asking about the abuses of the gift tax targeting. just so you know, we do have that letter. we didn't receive a response. so, the point here is that there were 83 specific employees that we asked for all of their e-mails on. you are aware of that right?
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>> we worked with the investigators to select the 83 that seemed the most likely to be involved in a selected range of search terms that would actually produce the e-mails that would be relevant to the investigation. >> but that was only the e-mails between the e3. for example if lois lerner send an e-mail to the secretary, that would be in those e-mails? >> there is no location that they would only be in the agency. the search terms were any e-mails to anyone. adjust the 83 were the accounts that were searched to see if they have 83 return to anybody else about the search terms those e-mails would be produced. >> that the secretary isn't one of 83. you're telling me if there was an e-mail from any of the 83 to the secretary that e-mail would be in the e-mail box and would have been found in the produce?
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>> the limitations back and forth belong the 83 it was the 83 custodians as they are called. they are e-mails, any e-mails that the search terms that were agreed to in all of them were produced whether they were to someone within the 83, outside of the 83 in the agency were outside of the agency. >> but do you understand mr. ryan's plaintiff in a lettee letter that he sent to the senate last week on friday, which is exactly what had happened when lois lerner planted the question in the audience way back, if this shows a pattern of abuse, then the pattern of dumping things on friday and then specifically -- i am not trying to get into a tit-for-tat with you. i'm saying why it's not believable is because you have -- the one we talked about lois lerner's hard drive which is one of the 83 that there were six
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additional folks in that 83 that have disappeared and you didn't tell us about it on friday. >> can i explain? >> we hoped to complete the production of all of the e-mails and complete the investigation which just started and provide a complete report. the senate finance committee indicated that they were nearing the conclusion on their report and they wanted an update on the letter in march to the committee and the finance that we have found that we produced all of the relevant e-mails to the investigation. we provided that letter. they also asked for an update. the reason it was produced friday rather than at the end of the month was in response to the question from the finance. at the time that we produced the report we had no information about the custodians and i have asked people to review. that information was provided to our people on monday morning who happened to be reading your stuff on monday afternoon.
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>> i'm under a lot of heat because i didn't know on monday and i didn't tell them on monday because i didn't know. it wasn't included in every part produced in response to the finance committee request because when the report was prepared, no one in the agency knew which any of the other custodians were involved. >> the time is involved in the -- time is a expired. >> lesniak might regret that this has been held -- this hearing has been conducted as less of a hearing then it might have been as an inquisition and you deserve better. you certainly are obligated to give truthful answers, and we appreciate your trying to. but these are just one thing. you have the right to try to respond to any question. if you find that you are being badgered or not given an opportunity to respond, take a
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breath and then try to get your answer out. if you are not given the opportunity, then recognize that again this is maybe not a hearing but an inquisition. you have the rights to mak righe the record reflects what you under oath would like to say. somewhat confused the issue that has been raised by this investigation. let me ask you a question. iand as added scrutiny that the irs was giving to the so-called social welfare organizations is there evidence that shows that any number of different types of organizations other than just far right or conservative organizations were being scrutinized? >> there is evidence that organizations across the spectrum were reviewed. the bold of the applications were from the conservative groups and were of conservative groups. >> but it wasn't just of conservative groups. >> that's correct.
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>> some would like to portray this as just targeting an attack on the conservative groups. but the evidence, which has been revealed to everyone including members of the committee is otherwise. we are watching how people try to confuse this investigation should really be about what is really wrong with the system and that is that today in america this so-called social welfare organization committees, these not-for-profit organizations that get special tax breaks that ordinary americans don't get and they pay less in taxes that doesn't have tax as a five o. one c. -- 501(c)4 they spent in 2012 more money than as social welfare organizations and the two political parties combined. $256 million spent by the so-called social welfare organizations to conduct political campaigns.
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while the two parties, which are there to conduct political campaigns spend less than the $256 million then the social welfare organizations spent. i hope at some point, commissioner, we have a chance to get into that because my understanding is that we are seeing now the seeds of this dark money that's being spent. my understanding is that there is an investigation by the state prosecutors in the state of wisconsin of the wisconsin governor for perhaps coordinating illegally campaign activities in ways that might not violate the law. what we are finding is that fewer and fewer of these organizations are applying for the tax-exempt status that gives a special tax treatment are doing social welfare. they are doing nothing more than campaigning. is that something that the irs is concerned about that what was to be a tax provision in the tax
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status reserved for the organizations that want to do social welfare is being used to conduct the campaign activity? >> our concern at this point is to try to testify on the numerous occasions to take our review of the relations governing all of the organizations to determine can we provide clarity as to what is allowable activity and the amount that you can engage in without jeopardizing your tax exemption and to which organization should apply. we have had over 150,000 comments on the draft regulation. we have announced that sometime probably in the early to next year we will review and we propose and ask for more comments and have a public hearing. we are not in the political business and i think what is important is to provide clarity. right now it is an unclear standard and it is hard for people running those organizations to know what is allowable and not allowable. they shouldn't operate those organizations and worry somebody is going to see the facts and
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circumstances change and now you are not eligible. so the goal was to have a rule that is fair to everyone, clear and easy to administer and we are going to try to do that. >> final question. you are under oath. to your knowledge are there any documents or requests for information that you have not responded to completely? >> we are responding as quickly as we can. we have the far-flung request documents we cannot respond to now and there is no known document request that we are not going to respond as quickly as we can. >> mr. t t. tiberry is recogniz. >> this congress and this committee have heard from a lot of different leaders who come and go and it's been quite frustrating for us and many other were constituents
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regarding -- and i will not rehash the concerns. but i think that every member of the committee ought to do something this weekend and maybe monday. go talk to your caseworker who deals with the irs for your constituents. get an earful from them and maybe we wouldn't be apologizing. let me tell you a story. a small businessman in my district paid his taxes on timee forever. forever. an automatic payment was setup in fact with his bank to pay the irs. like you have done as a businessman in the past. october last year, he found out when they actually the day that his payment was due to the irs got his account had been hacked. no fault of his own but fraud. he did what any law-abiding citizen would do. he worked with the bank, closed the account. the irs had already accessed the account but it had already been closed and he knew that.
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he called the irs and said my account has been hacked. a payment was made. it was made in perfectly because they closed the account. so the payment is going to bounce. i don't want to get penalized. i don't want interest. what do i do? >> thank you for letting us know. get us a check immediately. and it will all be good. it's the middle of june. he is being charged penalty and interest because of that fraudulent payment through no fault of his own. that is just one case ladies and gentlemen. and when these constituents have watched long before you got to the irs by the way, long before you got there has seen the irs continually delay when there is no delay on their part of the information. if they say my document got destroyed, sorry.
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not an excuse. there seem to be two sets of rules. and the frustration that we have is quite frankly everybody knows this has been going on for yea years. if the president would have asked me to be the commissioner of the irs and i found out in may, april, march, february was you found out rather than bury it in a letter on page 15 here is what i would have done. just a suggestion because of the lack of confidence the american people into this committee have because of how our constituents are treated differently than how the irs leadership treats america. i just found out this happened. it wouldn't cost to pick up the phone. the president has a phone. you probably have a phone. pick up the phone and say
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something very bad just happened. i don't know why. i don't think it is a cover-up and i don't think that it is, no. but because of the past and the lack of transparency in the past and because we are a really important agency that the american people need to have confidence in and the congress needs to have confidence in i just wanted you to be aware of this and we are going to try to continue to get to the bottom of this. when you don't do that, for what reasons i understand completely what you're saying but when we find a buried in a letter and then on monday because we ask the question not because you provided the information but because we ask the right question and there's a lot of questions we haven't figured out that we get the right answer there is a feeling that my gosh the irs has no credibility and it doesn't need to be that way.
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this isn't about republicans and democrats. it's about our constituents. talk to your irs caseworker. i can give you 12 more. i did i.r.s. casework. americans fear the irs. and now it is unfortunately with the pattern of delay and the disrespect and defeat in many cases there is no credibility. this isn't good for our country. and my hope is that you can clean this up. i have to tell you i don't even have a question for you. this is amazingly awful. it's absolutely awful. this isn't partisan. just talk to your caseworkers. thicaseworker's.this is not par. this is just americans frustrated with the arrogance of an agency that is above the law and that their opinion. i yield back. >> the first thing i did preparing for today's hearing was to talk with my caseworkers were constituents service
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representatives as we call them in austin and san antonio and what i found, commissioner, is when 250 irs employees spend over 120,000 hours in almost $20 million on responding to congress, those employees are not able to respond to their ordinary duties. i found for example that as far as the nonprofit community service organizations that the office of the cultural center that a smal is multi-area commuy foundation that wanted to raise money in a small town for the first time to support the community activities that a neighborhood community association in san antonio that the overzealous justice ministry, that a video service that covers community organizations in san antonio and tries to spread the word about their activities all of them have waited for months and in
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some cases over a year to try to get approval of their application to cause it would appear to be that you me that ye so busy responding to one claim after another you have no additional resources there's been a long-term commitment to underfund the internal revenue service and discredit it and the whole concept of progressive taxation in this country. now let me ask you as to the seriousness of the investigation have you ever been in benghazi? >> no. >> do you know if you have ever had any response ability for anything having to do with benghazi? >> no. >> how about area 51 and ross walden -- roswell new mexico into the space aliens? >> no. q-quebec have you ever had custody of the president
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certificate? >> no. you did is that this was a serious inquiry into the endless conspiracy theory that is being exploited solely for the political purposes. i do not approve of his lois lerner and the way that the irs handled all of these matters, but i think that there is a much larger cover-up issue here and it is the desire of our republican colleagues to cover up these purported social welfare organizations that don't want to disclose the secret campaign contributions they rely on to pollute our democracy. it's not surprising to me the entire revenue service would have questioned what organization paid by karl rove of texas was spending
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$71 million in the election cycle 2012. my concern is it doesn't appear in the public record has been a determination as to whether that was a legitimate social welfare organization are not window from today's papers and elaborate charts that anothechart that anl welfare organizations headed for citizens for a strong america. but that organization apparently wasn't involved in promoting the political process in the state of wisconsin. iabc that this is a serious matter. the use of the corporate secret money is a problem enough. but the determination to have that money to be taxpayer subsidized in social welfare organizations and in some cases headed by individuals who never had any interest until they could claim it for themselves to public our democracy that is a
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serious problem. i'm pleased you are going to be coming forward with anything else that you can find. because although this is not a serious investigation but the endless pursuit, the obsession with conspiracy and conspiracies we do need to have every bit of information every shred of information that you can find even though the people i talked about in texas who have legitimate issues before the irs are collateral damage in the process. but then i guess in some of his colleagues tha at the much cared about the collateral damage in other contexts anyway. i yield back i believe you are and i honest man and you took this job to improve the irs and serve the american people and so i just have a few questions.
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i was a cop for 33 years so i wanted over some questions. technology is confusing to all of us. there is an investigation currently ongoing, right? going back to the hard drive crash at lois lerner -- >> and you are fully cooperating with the office and i once chaired the intergovernmental agency of all inspectors general i'm a big supporter. you provided them all the information that they asked for in the process of the investigation into the request anrequestsand you've kept them s
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much as you can on all of the information that is developed on this investigation? i'm a little confused today when i learned that the ig office called our office here in our staff people here on the ways and means committee and decided that they didn't learn about the hard drive issue until the ways and means committee for doctor press release. how did that happen? >> vig is conducting an investigation into the avenue idea. >> the investigation they were doing as of the response to their report. they have started an investigation on issues regarding the hard drive. they were not doing an investigation. they have to learn from the press release in the ways and means committee in the united
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states congress they have to learn from that that there is an issue i would think if you were a part of that in helping me and assisting me in that investigation, does that not make sense to you that that would be information that you would provide the office? >> i just need a yes or no. >> i think that is important to continue to provide. they learned it in a press release. that is not correct. i think you want to be honest, but there's been some mistakes made and i can understand that. so let's just go through this very quickly. lois lerner sent her e-mails to the irs employees since they
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should probably leave not have these cases it's very dangerous we are told in a potential targeting is conducted by the rogue employees in ohio. we request all of the e-mails. the internal review then we find out the e-mails are destroyed and now we find out the hard drive is destroyed. mr. koskinen, the american people don't believe this you wouldn't accept that i'm supervisor i lost my e-mails or my hard drive.
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what would you do? my time, thank you. regular order. >> if i destroyed it id straight my hard drive. if i found the investigative contemporaneous information from three years earlier that he affect worked very hard to restore his hard drive you've got the best experts to conduct the e-mail and that had failed tiwould tend to believe it. the other hard drives used it to? one of the ones on monday turned out to have not caused the loss of a single e-mail.
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they do not cause the e-mail to be destroyed. we will make sure that we get it to you. >> now mr. thompson. >> thank you for being here. i too want to thank you for your public service and your distinguished career. and i don't want to apologize to the irs, but i do want to apologize to you. there are things that we can offer both sides of the aisle agree to. i think that we are all pretty upset if in fact there was any inappropriate behavior on the part of the irs come and i think most of us in previous hearings have expressed that. i don't care if you are a democrat -- actually i do care if you are democrat or republicarepublican doesn't matf you're a democrat or republican
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or conservative or liberal, you should receive equal into transparent treatment from the irs and if there's an there is y targeting done, it was absolutely inexcusable. i think we are all at the least disappointed that ms. lois lerner took the test and i think that they helped create a lot of the political nonsense that we are seeing playing out today. i wish that would have gone smoother and we could have gotten to the bottom of some of these problems from the start. and i certainly hope give that f these hearings we are having worked race to to have before te other committee has there's an all of the effort that's gone into this has really been a distraction from us being able to address a lot of the problems that are important to the american people the highway repair transportation if we
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could just take a little bit of this time maybe we could get some of the issues that would help put america back to work. and i think that all of us experienced the same situation as my friend from ohio. we all can tell stories about constituent problems with not just the irs but with anything given that you're here to tell you i personally have been trying for weeks to get an appointment in my district with the irs over a constituent matter of a small businessman in my district has been dealing with for a couple of years and it's all based on a bill dealing with conservation easements, so if you have any influence on your california office please ask them to return my call. i would like to deal with that. but the thing i found that it is
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really in my interest today in addition to getting this thing cleaned up and down with. it's misplaced and not knowing where they are or what the process for dealing with it is a. in number of years ago because of the legislation that i have carried dealing with electronic waste we found out not through our own resources through press reports that a number of hard drives from our intelligence committee and from the department of defense were found in third world countries and that was a terrible breach that caused me to amen amend our intelligencamend orintelligencer
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intelligence bills and probably everybody here who was there then. we had the same security problems with hardware and software in your agency and i would like to know if you think that's something we should try to collaborate on to protect the records of the public as they are stored in your equipment. >> it is important. it goes to recycle and as you stride rather than put in the waste dump were sent out somewhere else. >> i would be happy to share with you the approach that we took if you think that might help. in the remainder of my time i know that you had some things you were trying to say to my last copy and let us know if
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there are issues. i spent a significant amount of time visiting 25 largest offices across the country to let me know if there is an issue and to give us their best insight to the advice and suggestions on how to improve our operations. i'm particularly concerned and we are working on the backlog in the organizations and while we are doing our best to work that down so that your constituents actually get an appropriate and prompt answer to the replications i was angry when we learned what happened to lois lerner's hard drive and all the news that's broken since then and i'm even angrier today about this and it's interesting we
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sent a letter to secretary lew on monday we got the documents before this committee convened its hearing it's just amazing that the white house or the treasury can respond that quickly she had two computers write a laptop and a desktop quick >> right. >> which hard drive failed to close the laptowas the laptop oe computer. >> how do you even know where she's archived or do you know where she's archived to key documents from the timeframe that we are interested in? >> the timeframe you're interested in everyone archives
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their documents on their hard drive in the office because that's where most of the work is done and they want to be reached readable. >> can you attest that all of the documents and the memos from the targeting are produced you have these i cannot attest any e-mail was lost i have not talked to her and this is all information being developed as we talk. >> my understanding is no e-mail of hers has been lost as a result of her hard drive crash. we just got the list on monday ourselves and we've been pursuing this and we will in fact give you a full report on all of the custodians now it doesn't count. >> so we don't know where those hard drives are right now. >> we don't know where those are.
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it's unbelievable you don't have that information it then weeks since this information was made public to us. >> we advise you in the committee on monday that this is all that we have is the names. we are actually working through and review to find out what is the status of those and how many e-mails are lost and we will know where the hard drives are. we will give you that information as we have it. >> then we get asked what is the answer to this and we don't know the answer. so we can expect this in a timely manner. i can get yo give you all of the information. >> she was advised as i noted in the summer of 2011 that the kernel investigation division had been unable to retrieve any e-mails with her hard drive and was recyclable by what date to the date.
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>> it took this long for the committee to find the information in the letter that we received on friday. >> there were e-mails that actually last fall in the productions that referenced the crashes and no one was paying attention to because they were looking at all of the relevant information as we proceeded through it wasn't until april that was a crash and it wasn't until mid-may that we actually found the issue to determine how many e-mails were available. >> that's why it was into this committee notified and the decision was made to completely recycled the hard drive. >> that would have been made three years ago. none of us had anything to do with the investigation. it was -- >> i would submit it does have to do with the investigation.
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you might be able to shed some light as to why we were not notified and it disturbs me that this decision was made internally without any kind of outside consultation on this committee was vigorously pursuing information regarding the targeting. >> i would like to make the record very clear that decision about the hard drive was made three years ago and there has been no decision made since this investigation started and certainly since i started to have anything destroyed. any e-mail, any hard drive people are using now is after the crash is now in the possession of the eiji. any of the decisions that are made we need to be notified. this committee needs to be notified prior to any decisions made about the disposition of those hard drives. >> we will be going to-1.
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>> thank you mr. chairman. commissioner, i'm going to make an observation. it will sound condescending and i don't mean it to be. go deep into the meeting of time communicating. growing up my father told me make good choices and we kind of have a running joke when my kids go out of the door in the morning were particularly in the evening to make th good choices. i think that you made a bad choice and it wasn't based on that motivation. i think the administration came to use singularly as a person as a white knight. as someone with a sterling reputation, someone who has had experience turning around bad organizations. and i think that the administration is trading on your representation. so i think you've made a bad choice. you are in it now that the decision to accept this
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responsibility as the irs commissioner in defending this administration was a bad choice and i will make a prediction that you're not the commissioner of the irs anymore and it will go out to someone else because now you are the third person. and i would ask you to respond to that but it is an observation and i mean no condescension so here is the point you're been characterized by the other side as a victim. the irs as a victim is so richly ironic you can hardly believe it. so you're not a victim today. the irs isn't a victim today and here's the fundamental problem. the chairman sent a letter on this whole issue and then ten days leader. think about the duration of the ten days. ten days is the ability to panic as the irs, reflect, plan, talk
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and execute. and there was a crash. ten days after the chairman's letter. now i have a slide. that is a fire and inside that fire is a hard drive. i have another slide. that's the hard drive after it was burned and you know what, commissioner do you know what was recoverable from that column hundred% of the data. so the notion that a hard drive or a server in the midst of this entire situation has been lost into oblivion and is the case even a white knight can't make. >> can i make a comment?
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>> he has yielded that his time. >> can i ask unanimous consent that lois lerner's drive was thrown into a fire and 100% was recoverable because that is ridiculous. >> there isn't a question pending for the witness. i object. you are recognized and you may use your time as you see fit. thank you for appearing. you are not going to be doing this forever. i'm surprised anybody takes this job based on the treatment that has been accorded to people that have better things to do with their lives and had credible careers and a stepped into difficult circumstances. thank you. i appreciate it. i appreciate the fact that you
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are managing or attempting to housing the employees. you have a budget of almost $11 billion. and i appreciate that you are doing this with a workforce since i've been in a congress that shrunk 25,000 employees. 10,000 in the last four years. but the budget in its wisdom my republican colleagues are cutting your budget. the training budget went to $172 million to $22 million. from the tax code that we consistently make more complex and often times we don't get our jobs done in time so that your employees can do their job and somehow we are covering you and some of this does sound condescending i will say not
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allowing you to answer questions for the situation that the congress has made worse and is systematically assaulted the irs in its capacity to function. what did you do in the government shutdown? with business furloughs its accounts receivables department? not one that stays in business very long. with the layers of complexity and the vast system where people pound away on the irs for the people that work there. i appreciate that they do and certain irony is now in the republican party to assault the
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irs and return and undercut its ability to function. in its owand its own republican presidents starting with linco lincoln. i appreciate the hard work and being able to tease out this and i appreciate my friend mr. doggett's reference to the manner of things that have been relayed at your doorstep. like the training and like people on the job to not have the budget cuts that we are told by the tax advocates of the budget cut of 1 dollar costs the federal government seven.
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and undercutting the enforcement which every dollar is over $250 that's returned to the taxpayers for veteran services and for environmental protection. i'm sorry. i'm taking more time than i wanted. i would like to turn you to get an unfettered minute or two if there is something that you would like to say. >> thank you very much. >> and i would conclude with my thanks for your being here. >> with regards to bad choices i'm sorry the congressman has left. i have noted that when people ask why i took this job perhaps i need counseling. we have 90,000 dedicated employees that i talked to and listened to 10,000 of them. there is one point i want to come out from this to refute the suggestion in the next six to 12 months i'm going to fade away. i am firmly committed by will wl serve the remaining three and a half years of my term, come
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whatever it may be. and i think it's important for those employees dedicated as they are to the mission of this agency to have confidence that they are a leader and the irs isn't going to cut and run and decided to send a bad choice to take this job and it's delighted to be working with them and i look forward to the next three and a half years of my term during that. i would also like to note and reference again but somehow it is unbelievably lost the hard drive now is unbelievable because it wasn't lost now. it wasn't destroyed. that was a decision made three years ago before any of these investigations started. there should be no implication that anything has been the story or tampered with since this investigation started and certainly since i became the commissioner. >> the time is expired. >> thank you mr. chairman. commissioner, on the numerous occasions as well as on a first page of your written testimony that he presented to the committee, you cite murderous statistics of the amount of e-mails and other indications the irs produced with this
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committee and certainly for the senate finance committee but frankly all of these statistics are relevant if the effort doesn't get us to the full truth and certainly all of the statistics are minuscule to when compared to the constitutional rights of the average citizens that have been trampled on and is guided by lois lerner and others within the irs. the scope of the investigation into the work that was conducted by lois lerner and others and i would like to ask you based upon your understanding of all of that what do you think that lois lerner did wrong word inappropriately in the healing of her duties while she was in charge of the tax-exempt organizations in the application review process.
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>> in the past we had a lot of investigations going on. i think it is clear to the extent the ig found inappropriate. was used to select applications for the further review to the extent that applicants were required or requested to provide the voluminous improper information that was a mistake. it shouldn't have happened and we should do everything we can to make sure it doesn't happen again. the ig made recommendations of what should be done but accepted all of those and we are implementing all of those and providing appropriate training and safeguards because as i said earlier, i think it is critical for every american th american t their political beliefs, whether they go to church or don't go to church, whatever they went to last week it should be confident. if they hear from us is because of something in their return. and if they said something in the return that looked like that they would hear from us again and i think that is critical as a commitment that we have made. >> so you are basing that on the report in the investigation that
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you just said you didn't do your own investigation. i think however that if i were to become the head of an agency like the irs, i would want to conduct an internal investigation of my own agency to understand fully what happens. so i knew what happened because i am in charge of that agency. do you have any plans to do your own internal investigation of this activity? >> when i arrived it was clear with the investigations going on to the last thing i wanted to do was appear to be interfering in those investigations into talking to any of the potential witnesses in the second michael continues to be with the investigations and the amount of time going on what i'm looking forward to his being educated by the reports of those committees. you have all spent more and more time i have an agency to run. >> so you're not going to do your own. >> i'm looking forward to your facts in your recommendations. we will take those recommendations. >> it will be everybody's fact. >> let me ask you this in the time that we have. the tax-exempt government
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decision they announced the irs will restart the audit of the 501(c)4 investigations during the target ended due to political activity they were suspended after the acting commissioner expressed concerns that there may have been tainted by the targeting. the committee found evidence that lois lerner's bypass internal controls as you just indicated and reached into the right-leaning group for the audit. getting these concerns and the evidence that she influenced the office selection of these groups why would the irs use these audits? i think it is unfair for them to leave it in limbo that they deserve to have closure. we've made it clear. >> why not just provide the answer without auditing the process? >> we have noted that -- >> any request for the information they don't have to respond to the normal follow-up and we want to close the
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investigations of those organizations are not left in limbo and are not able to function and we should not leave them on there and we ought to appropriately review them and most of these cases we should do that. >> doctor price. >> commissioner, i want to also thank you for your service. there is a notion that we decided to appreciate what the public servants do come and we do. but this is serious stuff. ..
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your job is to rebuild this trust. and with all due respect, the comments we've heard today, the processes that you've gone through, haven't begun to rebuild that trust. you said that the work continues, the ongoing work continues. isn't it true that our friends who draw the conclusion of innocence is likely premature, is that not correct? >> are not sure who's i innocent you're worried about. i would like to note that the statistics we shared with this committee and happy to continue to work with you do not show that any donors were audited at a higher rate than people in the
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public generally. if they were it was a mistake but there's no evidence there was a systematic attempt. >> it's clear that the individuals -- and anecdotally there's no doubt about it, but the statistics will show that folks who donated to these groups were audited at a high rate. i want to get to a couple of specific questions. you said you learned about the crash of this hard drive in february of this year? >> i don't there was a potential problem in february. we did not know and i was not advised there had been a crush in may when her i.t. people discovered it and it wasn't until the end of may we understood there were able to complete the investigation of what the revocations were, how many enough still existed and then started the investigation of how many other -- >> winless treasury informed? >> i don't know. i did not -- >> they had to have been informed by the irs the? >> my understanding is that sometime by mid-april any conversation between council,
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council of treasury their advice there was a problem with the lois lerner's e-mails and that -- >> the irs council that inform the treasury? >> that's my understanding. they were advised we were investigating. >> secretary lew is refused today to provide a mouse as relates to lois lerner and other items to this committee. don't you think would be appropriate given, or maybe his computer crashed. didn't know if secretary lose crash -- computers has crashed, do you? >> my understanding, i haven't seen any of these documents. >> do you think it would be appropriate -- >> treasury department has provide all of their lowest learner e-mails. >> we have not reviewed them yet. >> none of us had had a chance to review those but that's my understanding. >> if there are any from lois lerner and secretary lew you will have those. >> to know if lois lerner headed back to larry -- a blackberry or an eiffel? >> i don't know spend i do not
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know. >> do employees of the irs kerry mobile devices issued by the government? >> the kerry mobile devices. the mobile devices running same e-mail system. people do not have on their office blackberries. if they have them or whatever mobile devices they have, ma they all run against the same e-mail account. >> can you find out if lois lerner had an iphone or a blackberry? >> i'd be happy to let you know. >> there's a notion on the other side this is the artist is scrapped ashman strapped for money. can't do a doggone thing goes to the money. you are aware the irs has a studio that produced the famous star trek video that spent $5 million annually on the studio, are you not? >> no longer, the studio has been closed. we now have a review board and produce very dubious and they're not done in the fancy studio. that was all four years ago. since then our budget has been cut by $850 million. >> i arisen please use 521,000
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hours in fiscal year 2013 at a rate of about $23.5 million for union activity, are you not? >> that's right. that's consistent. across rugged entrance of union voice and all federal agencies have a right to spend some portion of their time on official business for the kenya. the irs has a union and those employees pursuant to the process do spend time on union time. >> might be appropriate for them to spend time on something other than that. thank you, mr. chair been spent as long as -- >> time has expired. >> thank you, mr. chairman. mr. commissioner, i want to thank you for your incredible patience and your testimony here today. mr. commissioner, what you are seeing is an expected reaction from an overzealous committee that is so desperate to find any type of evidence in any type of fact that may point to a cover-up that does not exist. point to a conspiracy that does not exist and have instead chosen to go after a public
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servant who by all accounts is a model of integrity, honesty and professionalism. i think you are the right person, the right place at the right time to turn around a troubled agency. this committee and this congress should be working with you. mr. chairman, i also want to ask unanimous consent to get to articles inserted in today's record, one dated july 20, 2011, "new york times" article that's titled three groups denied break by irs are named. and another one by the center for public integrity titled irs liberal group to political or social welfare status. >> without objections ordered. >> the reason i want those answers today is to point out the extreme irony of this investigation. the only organization that were applying for 501(c)(4) status with the irs that was denied the
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application were organizations that were affiliated with democratic candidates for office. not conservative organizations. in the case of the three groups that were denied status they were emerging about it, emerge me, emerge messages that only supported democratic candidates for almost 30 of the article it was subtitle is agency rejects tax-exempt application of a pro-blanche lincoln arkansas to commonsense. they were denied application because they reviewed its two political. and there's no evidence at all the rsa denied any conservative group applying for (c)(4) status during the entire course of this investigation. so the state raged across from the other side is just that. going after an irs because of political fodder there brings to the base and it's unfortunate that we're having to conduct yet another witchhunt here today.
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mr. commissioner, let me ask you some quick questions with many time to guess you are under oath and we want to make this explicitly clear with your testimony. to your knowledge, has anyone at the irs to liberally withheld in e-mails requested by this committee? >> no. >> has anyone had irs withheld any information specifically requested by this committee? >> no, no. i wouldn't we have a produce all the information we have because it's luminous but we have withheld no information. >> any attempt with an irs to to destroy any evidence to your knowledge of? >> no attempt by anyone during the course of this investigation to destroy any evidence. as noted in the past e-mails were retained for six months. >> to your knowledge has been any attempt to data with any evidence or information requested by this committee? >> no,. >> since you been acting commission have you seen any evidence of any attempt to cover up information pertinent to this committee's investigation of? >> no. >> what about any information requested by the other
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investigations? i think you testified to six investigations that are still pending with the irs. >> were providing the same information to all investigators. the tax writing committees get unredacted information to the non-tax writing committees get redacted information so they have about 170,000 pages fewer than information in this committee and senate finance. >> have you seen any evidence of any direct involvement by the white house in the screening of (c)(4) applications that are the subject and evolve in this investigation? >> i have seen none. >> has been any evidence of any white house involvement in the irs is responses to the information requested by this committee? >> i have seen none. >> could you just give us a quick status update on the computer system at the irs, that you encountered when you took over as commissioner of? >> our computer system as i said is somewhat antiquated. we've been updating as much as we can. as noted we have about a billion
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dollar infrastructure as a result of the budget constraint. we are spinning minimal amounts on that as i noted. we still can get all of the employers on the window seven. i heard a reference earlier someone going to windows 10. we should be so fortunate to get everyone on window seven. we are constrained. our budget has been significantly underfunded on a declining basis on the less for your. >> in regards to what we can do to assist the irs, and updated more modern functioning computer system, what would that be? >> we have given you the president's budget would allow us to continue to make progress in that regard. we have at this .4 to $500 million of modernization and improvement activity that we would undertake. >> thank you. >> mr. smith's. >> thank you, mr. chairman. and/or witness here for your time today, thank you. i realize i think we have a large issue. i know it's been dismissed as an overzealous reach of the
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committee or a conspiracy similar to various others over history. political theater. i think you agree that this is a serious issue and i think that moving forward i would ask for full cooperation. it's been frustrating with the various responses that have been offered over the last i think 13, 14 months now. you mentioned contemporary documentation. could you expound on that? i've an idea what that is but i would like you -- >> i'm sorry speak with contemporaneous documentation that you referenced earlier. spent hours talking about, if you wouldn't mind, in the middle of this to our glasgow giants at about what we knew when. as i know to -- >> time is limited. if you would answer my question. >> contemporaneous means that the e-mail traffic that we found in our search about the crash was e-mail traffic at the time
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of the crash in the time of attempted restoration three years ago. >> okay. and various documentation is recommended by the irs with tax filers, documentation is required to be retained how long? >> generally come as a general matter people are subject to audit for three years unless there's criminal activity and then we can go back actually in some cases a limited amount but as a general matter unless you're a willful evader, we limit our audit to three years. >> now, shifting gears just a bit here. when you look at the size of the irs, 90,000 people, that we reminded $2.4 trillion revenue, many would say that the core of power in washington, d.c. is the tax code, 10,000 pages in length, various other descriptions, and it was noted earlier that a budget cut of 1 dollar in the operating costs of
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the irs results in costing revenues $7. would you agree with that assessment? >> could i what? >> that a 1 dollar budget cut would result in a $7 cost to reverend? >> it depends on who you ask of two of its four, six, $8 a dollar. but it's clear as i said, if with a greasy question 500 knowing that we were denied we were provided back over $2 billion of revenue. so we do provide, we collect in our personal activities over four or five times the entire budget of the agency. >> obviously there are many opinions here, and i have to tell you that given the complexity of the tax code, and i think that's the main reason why we're trying to reform the tax code to come up with a simpler approach. my question -- i question how possible it is to either these issues out, that some dismissed,
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others find very serious. and i would hope that we could have the full cooperation as we do move forward. i would hope that you agree that this is not a finished case. would you agree with that? >> no. and where inches and delighted to operate. i think it's important for the record without a good relationship with your staff and we have followed leads they wanted us to follow and it's been a productive and we continued to help to do that and we will be as responsive as we can to requests of the committee. i think it's important for us to do that. >> well, thank you i certainly hope we can continue to get this result. resolved. i know there are various characterizations here. it's disappointing that some have dismissed the situation today. i hope we can move forward. thank you. >> thank you. >> thank you, mr. chairman. mr. koskinen, i will go down the same length down the same unquestioned but if you want to highlight in a sample of a case in my district as well, small
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businessperson who went out on -- in minnesota, this individual small businessperson at the company have been involved and subject to for different irs audits over the past 10 years. most, the most recent is still going on. so for each of these audits has resulted in minimal or zero, zero changes to the compass income tax returns. the most recent audit is going on right now, has been going on for 18 months. the cost to the company about $110,000. it's an audit that is done to help train iraq's employees, ironically at the cost of the company. the agency is asked the company to produce an inordinate amount of information even requesting a receipt or a $10 cab fare that occurred months ago. i'm curious, commissioner, if the company came forward tomorrow and said this information has been lost, $10 cab fare, we cannot find it, similar to the hard drives being
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undiscoverable, you would understand that, right? >> yes. >> you would understand that and you would hold him accountable. they would have to produce that record? >> i'm not an exam agent but if as in this case he said i don't have the receipt but i can, by other information, demonstrate pretty close to $10 is what i spent, that would be allowed just as our providing 24,000 low-slung in those from the time of the crash. >> if they had a system of hard drive crashes that went forward and taking for and said there's nothing we can do, the servers are down, the hard drives argonne, we can retrieve the data, which ended the audit? >> as i say i'm not an exam auditor expert. i can tell you that trying to become compliant whether individuals or businesses we rejected him and trying and anxious to work with taxpayers trying to become a part. the ones we consider of the people willingly and consciously avoiding taxes especially those offshore. i'm happy to chase the end of the art and throw in jail but the people trying to become
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compliant we reach out to into the best we can do in fact work with them. >> this is following on the same situation mr. deberry identified with individual cases in the district but our constituents look to the irs for impartial judgment and understand but let me ask you, if an employee at the irs has a computer problem i,is there way to track when the employee called regarding the computer problem? >> yes. there are tickets which is how we actually in favor discovered that there had been a computer crash. i misspoke the last questioner i said we didn't about the crash until the end of april. we do know about the ramifications of the crash assess it in my organist testament. it was the ticket in fact information from i.t. that said there was a crash which caused us to then take the time to figure out what to get me come after e-mails been lost. that's when we been discovered in the production of e-mails the
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track of the e-mails that confirm that, in fact, there had been a crash, there been a significant ever try to deliver the most. >> with the ticket with the irs be able to track with the issue was that was being have a? >> i don't know the details of the ticket are but i know from the correspondence in e-mails that it was a hard drive crash and from some of ms. lerner's e-mails that she was unable to get to her e-mails. >> could you check based on the ticket who handled that particular id issue and how it was resolved, tracking mechanism within the irs of? >> i don't know what the ticket would show but we'll be happy to make sure you have the ticket and any information related. >> can you tell me who at the irs in the i.t. area handled ms. lerner's computer crashed issued in 2011? >> yes. it was a front-line, corresponds with within a front-line i.t. manager. what was not ordinary was when it could be retrieved by the normal i.t. experts to have scented expert at the criminal investigation division which was
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an additional step taken -- >> could you tell me what caused the crash itself? >> i do not know what caused the crash. in fact, my understanding, computers, three to 5% of them crashed as a general industry standard and there's no way to know why. >> can you rule out what you know are based on these tickets can you rule out that lois lerner destroyed her own computer? can you rule that out? >> there's no evidence that she did. if she had -- >> can you rule that out? >> you can never rule a something you don't know but at this point they're so evidenced -- the evidence issue worked very hard to restore her e-mail. >> can you answer the questions about hard drive crashes for the other six in toys as well that were involved in the targeting? similar situation. can we make sure they were not intentionally -- >> we are investigating that right now. will give you all of the information we are able to determine about windows computers crashed, whether in the nose were lost, what's been done with a hard drive should extent they are still available.
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they will be made available. [inaudible] >> thank you. mr. pascrell is recognized. >> thank you, mr. chairman. let me give you 15, 20 seconds -- i'm over here. spent you are behind the photographer. >> to answer one of the questions you were able to answer before, question, you wanted to correct the record. >> i started to correct the record, as i said in my testimony, written testimony, we knew with the i.t. ticket in february there been a crash. what we didn't know until late april was what the implications were. had the e-mails been lost? if so, whether other e-mails that were from lowest in that timeframe. so i've been consistent except fofor the one point i don't. >> thank you. do you agree when the irs grants a group exempts status, that
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means that there's an advantage of one group as compared to another group and how they are taxed x. it's important. and i do know what the number is of how much money the federal government doesn't take in because we do exempt, i me, the total amount of money. that's not my question. conveys a significant tax advantage to a group, whether they're left, right, north, south, doesn't matter. a significant tax advantage to that group. and its operations are being implicitly subsidized by you and me. you and i. >> that's correct. >> okay. is that correct of? >> that is correct. >> i'm not using hyperbole here,
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am i? that's exactly what happens. >> right. >> you actually think i'm going to ask your opinion. do you actually think they understand about what this is all about? i mean, this is not about what happened to the black box. this is about protecting the coverage that we have decided in our infinite wisdom to provide certain groups that are social groups but not political groups. now, do you believe the irs has a responsibility to protect it the taxpayers of this country by ensuring that the groups that we allowed to operate as tax exempt are operating in a way that is consistent with the law?
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>> ideal, and that applies to all 501(c)(4) organizations. >> according to the law in this area, tax exempt 501(c)(4) groups are required to operate exclusively for social welfare and that that must be their primary purpose. am i correct or incorrect? >> that is correct. the regulation provides your primary purpose has to be social welfare. >> let me ask you this. can you describe the process that the irs currently uses to determine a 501(c)(4) group is really a social welfare group, or is engaging in inappropriate amount of political activity? is that an intensive process that requires a lot of money, requires a lot of manpower? explained. >> it is a consultative process.
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we have 1,006,000 tax exempt organizations -- >> how many? >> 1,600,000 total of which somewhere in the range of 100 or one 50,000 rc for social welfare organizations. a lot of them, people of nothing to do that. women were stationed applies for exempt and, the historic process has been their activities or proposed activities will be determined on a facts and circumstances test and then there are a long set of examples and complicated regulations that describe how to determine the amount of activity that is social welfare activity and what kinds of activities and the facts and circumstances are political activities. so it is a complicated process. >> but it is intensive? >> it is intensive. >> and it should be spent and it is what? >> it should be. >> yes.
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we -- >> in the last four years how many organizations went from 501(c)(4)s to like any other organization in the last four years? >> answer quickly please. >> i don't know the answer but i will get that spent mr. chairman? >> yes. >> parliamentary inquiry. >> yes. please take your parliamentary inquiry. inquiry. >> since we're being summoned to vote and not all members will be given a chance to ask questions, i would like to know if those of us who do not have an opportunity to questio questione witness base of the comments and questions for the record speaks yes. and my plan is to recess and come back after votes, but -- >> some of us have travel plans. >> yes, but members will be able to cement questions. mr. marchant. >> -- to submit questions. >> microphone. >> i keep forgetting to turn mine on as well.
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>> this one is working. i'm privileged to have a district that has a vast number of people that are very high-tech, so mr. chairman, i'd like is a bit for the record a letter from one of my high-tech people that have some suggestions on how you may recover some of these e-mails that we are looking for. >> without objection, so order ordered. >> can i have a copy of the letter as well speak as i can provided to you. >> that would be great. >> this entire inventory was started because their constituents in our district that were harassed and treated differently by the irs, and whether we get all the e-mails, ever get all the e-mails involved in this, i think it has already been established that it this, this committee is dealing with this issue today not
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because it's a witch hunt but because we, our citizens and our districts were discriminated against. and treated badly by the irs. so that is why we are here today. do you believe it's important for this committee to receive all of the e-mails from ms. lerner's e-mail account and all of the e-mails from all the persons that have been identified of interest in this case the? >> i've always thought that was important. >> is the irs and its e-mails exempt from monitoring by the fbi or the nsa? >> i have no information about that, but i know indication that we are exempt from anybody's monitoring. >> so we don't know that the e-mails are not totally all recoverable in some process?
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>> if, if the nsa was monitoring all of our e-mails and collecting them and saving them someplace, then they might be there but i'm not aware that that was done. >> have you, as the commissioner, partially contacted the white house, the treasury, the federal elections commission in any of the possible federal agency that lois lerner may have contacted by e-mail? >> i have not contacted any of those agencies about any of the issues involved in this investigation, including her e-mail. >> would you be willing to commit to this committee that you will contact these agencies and request from them that all females that they have on their records and can produce for lois lerner and all the people of interest and request of them that they furnish them to?
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>> is good at it is all requested. would have authority over them and i'm delighted to note that the white house and treasury already have produced those, but with the other committees i'm happy, on behalf of the committee make a request that they provide any e-mails that they may have. if you'll give me that, remind me in a list of the agencies again that would be helpful. >> i will submit it to you in writing. thank you, mr. chairman. >> thank you. ms. black. >> turn one. thank you commission, for being here today. i'm a bit confused about the timeline here and what was known of what was not known about ms. lerner's computer. and the crash of a computer and, therefore, the lack of our ability to be able to get all of the e-mails. this is, for about a year and half now and i have read in a test and before you came and that i know you read your testimony to us it appears that the first time you were made aware that there was actually a crashed computer was when you saw the date dissipation of e-mail was uneven.
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and i isn't that correctly that that is the first time at unit about the crashed computer was when you determine after all these files were given and went back to look at them, you did a limited search and you said there is something wrong here because there is an unevenness division. was that the first time you were made aware that there was a crashed computer? >> that's the first time i was aware. that pattern cause people to do an investigation and they found that had been a crashed so i wasn't told to separate issues. i was told i was a pattern problem and i.t. have determined that had been a computer crash. >> during this period of time i think it very interesting that as we're asking for these e-mails and asking for them over and over and over again and they're not coming back to us in a timely fashion, this was prior to your even getting there, that all of the sudden you look and say wait a minute, we don't have e-mails from this time created, something else might of got on, that's when we find out where you find out or anybody in the agency that has been getting
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this request from us and other, from the oh, gee argument for him is, that's a first it's not that? i find that to be very curious. no one else knew? know what else would else knew? nortel's become a cynic with you to find this out because you saw that there was some kind of a given tissue vision and the dates. does that seem odd to you? >> no. the way the e-mails are pulled out of pool of e-mails that are in the server there is they're all pulled together in just a pool. the e-mails are extracted initially in 11,000 of them were provided in response to the search terms of don't get pulled out by -- >> i know how many e-mails to give talked about that so many times. spent i'm guessing they get pulled out initially by subject matter which -- >> let me just finish because i want -- this discussion, and you said you're a discussion of hard drive was made three years ago. the hard drive a finance of the ig. i'm confused.
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>> two hard drives. the hard drive that was recycled and destroyed was the har hard e the crash and 2011. a new hard drive was provided to ms. lerner and she used that from then on and that hard drive -- >> the crashed hard drive is going? >> it was going three years ago. the replacement hard drive was preserved and is in the hands of the inspector general. >> so we still do have a crashed hard drive that is not recoverable, that is missing that information and will never get it because it's somewhere, on? >> three years ago. >> is it not to there are also a requirement by law that you keep paper records as well if computers do go down? do not have paper records that are required speak as we are required by law to keep paper records of official records, and as a definition of the federal records act whether official records offer agency transactions. and then the employee is to point them out, create a copy of it and preserve it. >> okay. so i find it all to be very
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curious that in all of these questions of us asking for these e-mails all of a sudden just recently someone comes up to say oh, by the way, lois lerner's e-mail our hard drive has crashed and we destroyed it, it is gone. can't reach with it. these six other computers that we talk about gore the other custodians, i find that really curious, too, that that would be limited to the. maybe you can help you. are there other computers that use down? what percentage of total computers have crashed within the department? are there more than just the six? if there are six people that are connected with this, then you may have had a huge crash over there with this many computers being crashed inches will we are asking for. >> the industry standard is get three to 5% failures which may -- >> sound that spent across 95,000 employees. >> six of them that are related to this but -- >> the 82 we've looked at at
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this point we're looking at seven, which is within what the industry norm expects which is why -- >> i have one more question for you because my time is going to run out. have you had any information that is taxpayer information loss due to these crashes the? >> i've had no indication that taxpayer information -- >> so this information is lost but all of this information, millions of taxpayers have not crashed, not been lost, not been destroyed? >> there have been thousands of hard drive crashes in the irs across the time spent but we haven't lost any taxpayer information? >> that i know. tax information is saved in separate files. >> mr. chairman, thank you very much. commissioner, welcome. let me start by saying i understand suspicions of the majority upon hearing to years worth of e-mails just disappeared.
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put the shoe on the of the. when democrats were investing in the live lies and encompass of e bush administration, we would be in disbelief at this ineptitude as a. as we were, for example, when the learned the bush white house admitted that lost nearly 5 million, 5 billion e-mails between march 2003 and october 2005 related to the allegations of a politically motivated dismissal of then u.s. attorneys. fofortune we can put suspicious minds at ease today. the inspector general for the irs, a man named j. russell george who was republican political appointee of president george w. bush has already testified that ms. lerner did not learn about the inappropriate criteria being used in local since the irs office until a meeting at june 29, 2011, least 16 days after ms. lerner's hard drive crashed.
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yes, her computer crashed more than two weeks before she was notified about the inappropriate actions happening in cincinnati. like those who continue to refuse to believe that the birth certificate from the state of hawaii is actually real, a conspiracy theorist will continue to rattle sabers, but really does anyone in this room want to be seen in that light? commissioner graham as i mentioned, welcome. today, the irs has provided over 770,000 pages of documents involved in this investigation, is that correct? >> that's correct. >> included in those thousands of pages of e-mails, powerpoint presentations and notes deliver to congress over nine months ago. wasn't there information that specifically mentions the crash of ms. lerner's computer? >> yes. overtime starting in the fall and through the spring, the e-mails from lowest about her
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computer failure and e-mails about the attempt to restore it have all been provided to this committee. committee. >> so the crashed should come as no surprise. no surprise if the majority were actually reading the documents that the irs was sending up. you may not want to answer that question. do you think american taxpayers would be upset to know that this phony investigation has already cost them over $60 million counting when the republicans aren't even doing the basic due diligence of reading the documents that you're providing and sending to congress? i would message want you to answer that question. commissioner, or could be the majority in their zeal for an academy award for the best outrage in the state drum are more said they were caught not actually reading the documents the rss set up, thereby providing, proving that they are more concerned with a show trial than an actual, that actually finding answers?
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once again i'm not going to ask you to answer that question. the democrats on this committee have been outraged as has been said over and over again from the first award about ms. lerner's apology to a tax conference. we are anchored by any singling out of a tax exempt application based on ideology whether it be for progressive groups or tea party extremists. contrary to what mr. ryan said, progressive groups were targeted as well. that's a full statement he made. we led the charge for hard to be fired. we have agreed to oversight hearings over the finances. and for that reason, mr. chairman, an effort to get to the truth the next hearing on this matter should be with the inspector general of the irs who has not been before this committee for over a year. anything else would show that this committee is not using its time and resources seriously. without i think the commissioner for being here today and i yield back the balance of my time
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spent thank you. the committee stand in recess until shortly after votes are concluded. [inaudible conversations] [inaudible conversations] [inaudible conversations]
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[inaudible conversations] [inaudible conversations]
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>> you have been seeing some comments at the bottom of your screen. those are people's reactions to this i arrested and. you can weigh in,, or at twitter using hashtag cspanchat. the irs is taking a break as you choose also congressman can to vote on the house floor for defense spending we will get back at the hearing once it resumes. in the meantime we will show you some of the hearing from earlier this morning. >> good morning. the committee will come to order. well, good morning. over three years ago this committee started asking the irs, was a targeting conservatives for their beliefs? was asking groups inappropriate questions? was it harassing conservative
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donors? the irs i sure do this committee and even testified before congress time and time again that no targeting was occurring. then as we all recall one year ago when a signature i arrest friday news dump, lois lerner admitted to the american people that the irs targeted conservative organizations. the irs lied to congress and the american people. in fact, this committee has found that there's ample evidence to suggest the irs violated the constitutional rights of taxpayers. as of today the investigation into the irs intentional organized targeting of americans for their beliefs has been ongoing for over a year. what we have found so far is outrageous. the irs spent over three years responding to top democrats complaints and called to action to stop all activities of conservative groups.
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the irs in washington, d.c. took their marching orders and subjected americans to harassment going so far as to question the content of the prayers and their political beliefs while subjecting them to audits and leaking the personal taxpayer information. when the scandal first broke out the president vowed his admission he would work at the quote hand in hand with congress to get this thing fixed. this spring, commissioner koskinen can you said your goal was to quote find problems quickly, fix them properly, make sure they stay fixed and be transparent about the entire process. well since my time in congress i've never seen an irs so broken. late last friday the irs admitted to congress that the agency had lost over two years worth of lois lerner e-mails and blamed the loss on a computer crash. my committee staff later learned in an interview that it wasn't only ms. lerner's e-mails, e-mails of six other individuals
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willing to this investigation, including the former acting commissioners chief of staff. and just two days ago we found out the irs and white house have known for months and kept it secret from congress. this is not the most open and transparent administration the president promised to is not about as far as you can get from getting this thing fixed. what does this really mean? it means they are as has claimed ms. lerner's hard drive is really unrecoverable, the public will never know the full extent of the abuse of americans for exercising their first amendment rights. let me give you an example. ms. lerner told tigta investigated she first learned about the tea party targeting in july of 2011. that wasn't true. in february 2011 ms. lerner told subordinates by e-mail quote tea party matter dangers, and discuss ways to deny the application. we only have this e-mail because they came from a another employee's inbox. had ms. lerner e-mailed this to
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the treasury department or justice, it would be gone for ever according to the irs. we are missing a huge piece of the puzzle. figures between 2009 and 2011 are the very peak of when the irs organized and implemented its targeting scheme. how convenient for the irs and the administration. i find it hard to believe and i don't believe the out as went through every possible exercise to recover these documents. we are missing the e-mails of seven irs officials during periods critical to this investigation. how is this possible? making matters worse, the irs has kept a secret while quickly informed political staff and the administration. after all, the obstruction, i for this congress and the american people cannot take the irs at its word. one thing is for certain. you can blame it on a technical glitch. it is not a technical glitch to
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mislead the american people. usage of lost e-mails but what you've lost is all credibility. the irs is in charge of hundreds of millions of taxpayers information. and you are now saying technology system was so poor that use with the e-mails are or ever unrecoverable. how does that put anyone at these? how far would excuse of i lost it get with the irs for an average american trying to file your taxes who may have lost a few receipts. oddly enough, this seems a satisfactory answer for the attorney general but as far as i can tell this administration has done nothing to investigate what truly happened not was industries in the department of justice detailed referral letter of nearly 100 pages. they have repeatedly tried to sweep this under a rug and claim no wrongdoing that ever looking for the fact. the american people have no reason to trust the irs or frankly the administration on this issue. to wait years to reveal the
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facts the rs was targeting immigrant people and then wait months to reveal your conveniently missing years of documents. it's no wonder i've heard the word cover-up thrown a lot about this week. the time for denial, delays, destruction and attempt to blow this office of phony scandal are over. this committee is fed up and we expect some answers not, from not only the irs but the whole administration but it's time we restore the american people's trust in their government but i feel with recent events that may not be possible. and now, mr. levin, i recognize you for an opening statement. >> thank you. on september 11, 2013, internal revenue service provided this committee with one of the 770,000 pages of documents it has turned over since ways and means undertook its investigation into the irs in
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may 2013. in total, more than 250 irs employees have spent over 120,000 hours working to produce documents at a cost of at least $16 million to taxpayers. that document received last september, last september, included an e-mail from lois lerner to other irs personnel dated june 14, 2011. it began, my computer crashed yesterday. we now know the full extent of that equipment failure. despite an exhaustive effort by forensic i.t. professionals at the irs, they were unable to save her hard drive, and are e-mails between january 1, 2009,
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and april 2011. although her e-mails from june 1, 2009, to april 2011 our unrecoverable from her hard drive, the irs will produce 67,000 e-mails related to lois lerner. to iran's has or will be producing 24,000 e-mails that have been recovered from the period before her computer crashed. they recovered these e-mails from other irs employees. that is on top of more than 43,000 e-mails involving ms. lerner after april 2011 that have already been produced. there is absolutely no evidence, absolutely no evidence to show that ms. lerner's computer crashes anything more than equipment failure.
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at the time of the incident in june 2011, irs computer experts review the issue and conform to lois lerner fat, and i quote, unfortunately the news is not good. has sectors on the hard drive were bad which major data unrecoverable, end of quote. was the computer crashed a conspiracy? no. was the internal revenue service is system for backing up its e-mail system entirely underfunded and wholly deficient? clearly yes. in fact, congress has cut the irs budget for operations, which includes what it spends on computers and other information technology every year for the last five years. house republicans are proposing to slash its once again next
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year. commissioner koskinen, whom we welcome you today, has informed this committee that the irs has $1 billion worth of computer equipment, and that the agency should be spending $150 millio $150 million-$200 million on maintenance for that equipment. instead, the agency spends virtually nothing because it cannot afford to properly maintain white house. it's important to remember that e-mails were routinely lost during the bush administration. in one instance in 20 -- 2007 according to report by democrats on the oversight committee, the bush white house acknowledged having lost nearly 5000 e-mails between march 2003 and october 2005, related to allegations of a politically
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motivated dismissal of u.s. attorneys. lost data under the bush administration, coupled with the number of computer crashes at the irs, clearly demonstrate the need for government agencies to have adequate budgets to invest, upgrade, and maintain information technology. my colleagues on the other side of the have taken this opportunity to rehash well-worn allegation, allocations of white house -- allegations of white house involvement. allegations that republicans have made from the very moment the inspector general released its report more than a year ago. on the day the report was released, before a congressional investigation into the issue had even begun, chairman issa accused the white house of end quote targeting its political enemies. three days later, our chairman,
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mr. camp, in your opening statement during the first hearing on this matter, you accuse the white house of a culture of cover-up. congressional republicans are so determined to find a needle in a haystack that they seek desperately to add to the haystack, even though no needle has been discovered. it was in that vein that chairman camp this week said that this entire case started with the white house, and sent a letter to the president requesting all correspondence between lois lerner and the executive office of the president between january 2009 and may 2011, the period before ms. lerner's hard drive crashed. the white house has conducted that search, and what have they found? there was not a single e-mail correspondence sent to or from ms. lerner and the white house.
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this committee has been involved in this investigation over a year. here is what we have learned. the 501(c)(4) applications of both conservative and progressive groups were inappropriately screened. there were long delays in processing applications. they were serious mismanagement, and i was among the very first to call for ms. lerner and then commissioner miller to be relieved of their duties. in all of the 770,000 pages of documents that the irs has supplied congressional committees, including ours, there has not been any evidence of political motivation or of white house involvement. now there have been computer failures at the irs, and republican conspiracy theorists have started a new. the evidence to date reinforces
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this long evident truth, the prevailing conspiracy in this matter is that of the republicans desire to stir their base, tied the problem to the white house, and keep up this drumbeat until the november election. i'm glad that you, commissioner koskinen, is here with us today to set the record straight. we are glad you are here. you started at the irs last december, after a distinguished career in the public and private sectors. at omb, at freddie mac, as the chair of president clinton's y2k computer console. so again, we welcome your testimony. we are glad you're here. we look forward to your testimony to set the record straight. >> all right, thank you.
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if i recognize commissioner koskinen for his opening statement i ask he stand to be sworn in. commissioner koskinen, please raise your right hands. do you solemnly swear or affirm that the testimony you're about to give will be the truth, the whole truth and nothing but the truth so help you god? >> i do. >> let the record reflect the witness answered in the affirmative. thank you. commissioner koskinen, thank you for being with us today. you will have five minutes to present your testimony with your full written statements a bit of for the record. you are now recognized for five minutes. [inaudible] >> chairman camp, ranking member levin and members of the committee, thank you for the opportunity to appear before you today to provide you with an update on recent irs document productions to congress. the irs has over the past year made a massive document production in response to inquiries from congress. in march the irs advised this committee and the senate finance committee that we've completed the production of documents,
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identified as relating to the investigation of the processing and review of applications for tax exempt status as described in the may 2013 report from the treasury inspector general for tax administration known as tigta. those production effort included 11,000 e-mails from lois lerner former director of the irs exemplary organization's vision. this committee and the senate finance committee has noted have never sued more than 770,000 pages of unredacted material. we are sending another production to you later today of additional lois lerner e-mail to go in more than 25,000 e-mails from ms. lerner's computer account and more than 5000 e-mails from other custodians accounts for which ms. lerner was an author or a recipient to the irs expects as noted earlier in my conversation due to complete its production of the remaining lerner e-mails to this committee by the end of the month. at the time you'll have all of the e-mails, 43,000 of them, that we have from ms. learns
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computer and the military for the. january 2009 through may 2013. in addition as noted you have 24,000 lerner e-mails from other custodians accounts during the period that her hard drive crashed for a total of 67,000 lerner e-mails. in the course respond to congressional requests the irs in february review the e-mail available to ms. lerner's custodial computer accounts which have been been limited and limited by search terms we had worked out with investigators and identified the possibility of an issue because the biggest addition of e-mail was uneven. it was not clinton whether lerner e-mails were -- >> what's relevant to the investigation. to begin those widget, by subject matter and put them in order by date. and in late february they discovered that there were only a handful, relevant handful, small number of e-mails in the spirit and then more voluminous e-mail. nobody knew quite what that meant. we discovered in that late february time frame that her the
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computer had crashed through the i.t. department verified that. when we went into, then we started we tracing the issue of did we lose e-mails in her own production? in other words, because the system didn't work so we ran all of that process again starting from scratch. we then in the course of holding all the e-mails in the march timeframe discovered the trail of e-mails here that said my hard drive has crashed and what can you do about it? at which point we then pulled all of the 82 custodians who had already been searched or the search terms and relevant information to see if there was anything in that their information beyond the relevant information that were lerner e-mails which was by the end of april we were able to determine, we have a review to produce more yet but we have 24,000 lowest lerner e-mails from other accounts. at the point as we were pulling off, it took us into me to get all of that done and the, now i would like to note on the other 82 custodians because hard
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drives crash all the time, how many of those have a hard drive issue? and that was what i.t. was within and actually monday morning told the deputy i.t. person working with us who didn't that afternoon we were doing briefings, i wasn't but we're doing briefings with congress, got asked the same question, if lois had that problem, did anybody else have a problem? he responded we just learned this morning that the art that .6 it turns out subtract one that failed in february and had two more we found since monday as we're moving through this that this is what we found, we don't know anything about it. ..


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