tv Tax- Writing Panel Considers IRS Reform CSPAN May 22, 2017 11:41pm-12:44am EDT
live coverage is at 9:30 a.m. eastern on c-span three. you can also follow life on c-span.org and are free c-span radio app. >> treasury secretary, steve minasian testifies on president trumps tax reform plan. we are live with the senate finance committee starting at 6:10 a.m. eastern on c-span three, ina olson, national taxpayer advocate testifies on fighting fraud and taxpayer id theft she appears before the irs services for taxpayers. this is about one hour. >> lessons learned from the tax
payer advocate, it is been nearly 20 years since congress seriously considered reforms to the irs. i am hopeful we embark on a new effort to improve the agency that can work hand-in-hand our members on both sides of the aisle, working together confident will find common ground and make progress. it's important to emphasize that our effort to reform the irs is not seen as a punishment of the employee. instead we need to recognize the irs mission is very important. every government entity whether private companies can benefit from a thorough review of thoughtful long-term planning and action. that is what were here today for a period of a business background is started my business many years ago. my experience tells me we are say to look for ways to improve. continuous improvement has been part of my philosophy over many
years. when i was find a way to get better and more efficient. when evaluating entities i always ask myself the reason for improving. the big goal is to have continuous improvement is your organization has. the task before us as tough questions and look for solutions. taxpayers need to be able to trust the entity administering texaco. 98% of our tax revenue come to the irs voluntarily. only 2% is corrected through the iris of horseman action. trust is a component of voluntary compliance. the taxpayer bill of rights contains the right, and quality service and i think that's a big focus that second on the list. an irs publication describes it as a right to receive prompt courteous and assistance in dealings with irs as we consider reforms we should keep this right as well as well as the
other nine of mine. i look forward to working with the ranking member and other members of the committee to make the irs or 21st century agency. i think our witness for being here today, she's been a champion for taxpayers for many years and her insight will be very valuable. i look forward to her testimony. i now yield to the ranking member mr. lewis for opening statement. >> good morning mr. chairman. thank you for holding this hearing. i want to thank this olson for being here and for her many years of service. also like to thank our members for being here i know some of us this is a little early. [laughter] >> i agree. >> but we are here. mr. chairman, we must approach
the important manner of informing the internet service with a great deal of care. we must remain focused on doing what is right and what is just for the interest of every american taxpayer. who stay on a bipartisan path together, we help the irs become a model for constituent services. we are large and complex organization that is suffer from a lack of resources for many years. , congress cut the agency budget to almost $1 billion in 2010. these cuts harmed taxpayer services and tax compliance of the irs need technology, infrastructure and employees to provide for quality customer service. for these reasons responsible
reform must include strong robust funding. as we study the structure and service we must consider how much the world has changed since congress enacted on this matter. over the last 20 years internet access creates opportunity for summer barriers for others. both taxpayers and those are serve them struggle with increased identity theft, fraud, and scam unfortunately a program like a private debt collection which has been tried and failed plans to more confusion. i believe we agree on the importance of an agency that will provide taxpayer with greater access to customer service online, over the phone and in person.
i believe we can help build a tax administration system that would take advantage of new technology while enhancing the security of the taxpayer data. i believe we must do better and if we work together we can do better i look forward to hearing from the national advocate today in learning more from her experience with taxpayers in the agencies. i think you are holding this hearing today and i thank you for your service. >> thank you and i look forward to working with you on irs reforms. other members opening statements will be made part part of the record. nina olson, from the irs is here. i mentioned to her earlier i met with a group of cpas from florida. your organization was well thought of.
also last week prepares here in washington i asked about your organization. they give you high marks. i don't want to to get a big head but we do believe in continuous improvement. we appreciate you being here today, the subcommittee will receive your written statement made part of the formal hearing record. you have five minutes to deliver your oral remarks. you may begin. >> chairman, ranking member and members of the subcommittee, thank you for inviting me to testify today regarding the operations of the internal revenue service and offer suggestions to improve the responsiveness of the agency to u.s. taxpayer. spend nearly two decades since congress last reviewed and updated the laws governing irs operations. touch is changed and tax administration would benefit from a fresh review of the laws. my written statement i make the
following point. first, reforms irs operations will be most successful if congress can focus widely in the proposal and engage irs employees and external stakeholders and provide irs with adequate funding to 60. second, some tax administration should be predicated on foundational principles. the most important principles respect for taxpayer right. not only is respecting the taxpayer those who pair nations built the right thing to do there's significant data that suggest building trust with taxpayers which requires respecting their rights enhances voluntary compliance as well. in 2015 congress codified the provisions of the bill of rights as part of a provision requiring the commissioner insurer irs employees receive training and act in accord with those rights. the challenge to is to ensure that it is not merely aspirational but isn't
incorporated into the ether those of the irs and exclusively into business practices. a clear statement that taxpayers actually have the ten fundamental rights would provide a stronger foundation for effective tax administration. i recommend congress and at the taxpayer bill of rights is a freestanding provision in the internal revenue code. there, to become an effective tax demonstration the iris was placed greater emphasis on taxpayer service. in my view there's no conflict between providing high-quality taxpayer service and taking actions to ensure tax compliance, particularly on the part of persons actively seeking to have a tax. should not be in either or proposition. to create an environment to encourage taxpayer trust and
encouragement the irs must change the culture from one enforcement oriented to one that service-oriented. of the current appropriated budget of $11.2 billion, 43% is allocated to enforcement while only 4% is allocated to taxpayer outreach and in activities. according to data the agency only dedicates 98 employees to conduct outreach and education to 62 million small business and self-employed taxpayers and only 376 employees to conduct outreach and education to the 125 million wage and investment taxpayers. meanwhile, the irs has over 3000 officers who collect field information and field audits. congress directed the iris to place greater emphasis on serving the public a meeting
taxpayer needs. in response they adopted the following mission statement. provide americans taxpayers top-quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all. in 2009 with no public discussion notice to congress or to myself they quietly change its mission statement to read, and enforce the tax for with integrity and fairness 12. the shift in tone and emphasis from applying to enforcing the law suggest iris leadership disagreed with congressional directive and decided to place greater emphasis on enforcement on that mission statement. accordingly i recommend congress require the iris to revise its mission statement to reemphasize an approach and explicitly informed the role of taxpayer rights as a guiding principle for tax administration. fourth, congress has passed
important rights bills and in my testimony to highlight provisions that congress has enacted that the irs is either not implemented, to find a way through guidance or only done a partial job. fifth, ra 98 showing oversight hearings would give congress better insight into the strategic and operational plans to promote dialogue between congress, irs and interested stakeholders to help ensure the tax rating and appropriation committees coordinate tour the iris operation. thank you. i look for to answering questions. >> we will now proceed to question-and-answer session. we will have to limit the questioning to four minutes instead of five because we have a briefing at 10:00 o'clock. as is custom and i will hold my question to the end.
i recognize the gentleman from arizona for any question. >> this is unique for us because we are used to having witness for the irs. where we have a series of stories and is frustrating and when we researchers on we had people say nice things about your organization. a little concern about speed but actually said nice things. you win a prize for having a unique conversation with us today can i start with one thing that did come up in the conversations about the hearing that was without reach to our office in your office of individuals who are in the gig economy. the cooper driver, the person who crowd sources their work through the internet and the discussion of how they access information to say here there
rules for me to pay for my retirement and what must be set aside. first as an advocate to believe your organization is doing enough to make it easy to access that information? where is posted on the website, and the same thing as he observed the irs? >> i'm very concerned about this population as it's a very fast-growing i'm concerned they would get into trouble with self-employment tax. one thing my office is working on that we receive suggested font from other sectors is to develop a wizard where people who are starting in the gig economy king go toward taxpayer toolkit online and see the steps they need to do and get to the different places get an employer identification number, understand calculating self-employment tax and when they need to make it, calculate
and learn about the different forms of retirement saving. most importantly they have problems how they can resolve them including getting to the taxpayer advocate service. we are developing that now. >> and i may have chartered and never get but sometimes advocate may be proactive this is something we need to deal with no dissociated mother organization you know you can save for your retirement they may have just sent off be in every employee and no longer an independent contractor. we'll have to figure out what we'll do to help this population to have that future. on the irs side to see the agency itself doing enough as a public access, you cannot get it
from the organization your contracted with, where does that person go? >> the irs did create a webpage last year to address some of the issues for the gig economy. as always i think we can all do more. this goes back to the fact there are only 98 employees conducting outreach and education to the self-employed population in the united states and 14 states that do not have one of those employees located in the. >> i know where the last 30 seconds, i have a fixation that the use of technology as a way to direct folks were having difficulties with the irs. as the advocate do you publish saying this is a problem that comes to us quite often here's how it's been resolved, here's the four meaning what are you doing proactive in that?
>> we identified the needs of the gig economy and made recommendations. we have created materials from my local taxpayer advocacy in each state conducting outreach proactively. that is an assignment to identify stakeholders in their communities. >> thank you. >> i recognize mr. lewis for questions. >> thank you. it's my understanding you held a dozen public meetings around the country, what did you learn? >> we learned how hard people are trying to communicate and how much they actually want to. we learn people thought having digital online tools would be very helpful but they were no replacement for talking to the irs.
there is a strong desire for the irs to hear for them and listen to them. we learn from different populations concerns about identity theft and scams going on. those were strong issues. we learned about issues of payroll service providers ripping off taxpayers who are securing their services. we heard from experts about how to design digital services to make them usable by people but not replace the communication with us on the phone or in person. i was a very strong message. >> as a taxpayer you believe the quality service can be provided on the cheap. >> i think taxpayer service to me is the key way that you build trust with taxpayers.
you can do taxpayer service whether trying to do outreach and education are within an audit or collection activities. if you take the approach they are trying to bring it into voluntary compliance and understand why you having compliance difficulties in listening, then that is how you bring taxpayer service and rights into the egos of the organization. there's no conflict with exercise in the compliance tools that you have. providing taxpayer service that you have doesn't eliminate any power the irs has when they need to use them. >> to think the 1998 reform was successful? >> i think it was very successful. i think what we need to do is go back and that's probably why i give you the list of some of the provisions that i saw were not successfully implemented. the congress focused on a 98 was
very key and we need to make sure the irs does what you directed or learn why they couldn't do it and revise it so it fits into 21st century tax administration. >> has it achieved its goals? >> it made the irs focus on taxpayer service but it sort of moved away from that is a primary focus. it's moving away from person-to-person contact. i keep saying people are giving up their money, were taking their money for the greater good. why would we not want to talk to them and hear from them and listen to their concerns. even if we have to tell them we can't solve the problem in the way they want area but by listening we gain trust. and we need to do that. >> thank you for being here and for your service.
>> i recognize the lady from indiana. >> thank you. many thanks to my constituents in indiana. you have helped the five years i've been here you have been able to mitigate and help over 90% of the questions we've had. i'm very grateful. you probably seen everything is 16 years so i want to pick up on what you learn from the hearings on the issue of id theft and that's what we get burdened by folks my question is on the return review program that started in 2009, i wanted to hear from you on the success in 2010 the irs said it was too risky to maintain upgrade and here we are and it is still the principal fraud detection system because it's still not ready for prime time.
in fact no estimated date of full implementation. they estimate that it has incurred over $86 million. when it has run as a pilot that yielded a high false positive rate missed $313 in fraudulent filings. so let's talk about the number behind them. you documented what taxpayers go through in your annual report. can you walk us through what happens to a single month, small business owner, a person who gets flagged as a false positive? how do you find out what hoops they go through and what this means to the people. >> depending on what system triggers them as a fraudulent return to either get a letter or their refund is held up and they
have to call and they have to verify themselves online i might have to go into a walk inside to do that they can't just walk in the have to make an appointment sometimes it could take weeks to get an appointment annual bill gave refund before you do that. even if you go through the your return could be stop by some other filter once it goes back to the processing. then he have to go through it again. identity theft and fraud have been the top two receipts taxpayer advocate service for the last five years. they really are significant part of the inventory it's devastating. >> aside from the time element frustration doesn't that cost taxpayers money if they need to seek professional services. >> absolutely. it affects people who are low income, high income, it doesn't matter.
there is no one person sign to their case. every time they call they have to tell their story to a different person. these are recommendations we made. anything on the filters that we recommend that they create a dedicated team during the filing season dirt on the it side. so then you have a team that can get in there and adjust so filters don't wait until later. >> what about commercially available technology? how would we go through that money that is being spent and the lack of accountability on the system certainly the financial sector has sent about
fraud and the commissioners establish summit. about a time. annual back. >> direct message on the lady from washington. >> thank you for being with us today hundred talk to about technology in particular on the dire state that it's in now. can you give us a brief overview of how technology decisions are made at the irs today and whether you think your organization is working well? >> there are many executive steering committees on the technology side that review the priorities of how the irs will
spend its money. the irs in addition to the cyber security concerns that we have which are very great, the major concern we have in addition to our return fraud detection system is the enterprise case management system. we have over 60 systems and they don't communicate with one another. so employees have to get permission to get into things and often they can't, it slows things down, it's manual, it's not virtual, or case files are not virtual. it's astonishing. that is a heavy lift that the irs is very far behind on. but after spending millions of dollars get up the speed. and then we have the two oldest information systems in the federal government according to gao where were keeping our taxpayer information on. that's a significant concern. getting from those systems into
something that is 21st century. >> we talk about cyber having old systems is very concerning. it's concerning because access to information is cumbersome. slows done your ability to do his job. what he think things have gotten so bad? why are we so outdated? >> my personal opinion from observing it while i have tried to develop mild case management system for my own employees is that apparently we do not have the talent inside the irs. we have not been able to recruit the people we need to. and then i think that there is not enough communication between the it function in the business operating divisions who will use the systems. so things get developed that actually are not what the operating divisions need in the
operating divisions don't have a chance to tell the money gets wasted. i've seen a lot. >> think that's a common problem we have seen in technology implementations and government generally something we need to focus on to current modernization plans within the irs that you think are going to help adjust these issues. particularly for the ecm we'll just put out a request for information to hear for off-the-shelf products that are doing case management system to see what's out there and they were will build to request for proposal. i think that's the appropriate approach to get a sense of the universe instead of focusing on one thing that insurance out not to be good but we've invested in it. finally on the right track in that regard.
they need more funding to be able to bring in the talents, but they also need more oversight from you so your understanding that funding is being spent appropriately. >> thank you. i yelled back. >> direct message alone from pennsylvania. >> thank you mr. chairman and thinking missiles and for your work. often times the irs has a direct relationship with taxpayers because it relates to the taxpayer paying the taxes. but the information that they put in is relevant for another purpose. that is, college applications, including for financially.
as colleges and universities interact with their students their relying on the applicant's ability to let people know the financial status is. that means have to get antivirus databases. our facing tools have been used so that i authenticate who i am and you allow me to go into my tax return and for that onto my financial aid application. as a parent who has gone through this process and i'm speaking for many, it is so frustrating to begin with. but now, overseeing the system which is put in place has actually been compromised. hundreds of thousands of americans trying to make this application have found their identities have been stolen. as a result, now we can't utilize the two but you have people who are trying to make those applications are now
frustrating and feeling time deadlines and don't know where to go to get the information. and often times the very people making the applications may be a student that doesn't know the information that their parents have, can you speak to me about the tools the irises using and what you know about the compromise situation and what they're doing to make that taxpayer relationship will more slowly, flow more appropriately. >> first the information the irs has is a valuable lesson of federal government taxpayers of the united states. we have to make sure is protected in every way possible. that means there has to be high-level screens of people to authenticate who they are.
lester the irs learned there were risks to the way that people were getting access to irs data. while he tried to work with the department of education over time they learned with the iris needed for protection of that data the department of education cannot put into the system. they gave several workarounds and those were not able to be implemented. >> was the problem on the department of education? >> it was on the types a system the doe has. and we're set a very high standards for access to that information. so the irs had felt according to the risk analysis that they had to stand down. they have just put it back up again. their work through some issues, but this is where you have difficulty we have one agency in another and you need to get them together. >> is the department of energ
education collaborating? >> i think they are now. this is my personal opinion. i think it's a matter technology. it's also they did not understand initially the level of concern that we have about people getting access to this incredibly important data and misusing it. >> thank you. i asked for your continuing oversight on that issue. as we speak millions of americans are dealing with this frustrating system. >> recommends the gentleman from connecticut. >> thank you mr. chairman. i appreciate the opportunity to audit the committee. i have nothing but great respect and admiration for you and the job that you have done.
representative courtney and myself have been dealing with an issue along with representative neil in new england that deals with foundation crumbling. not dissimilar to a case that happened many years ago in the south with what they refer to as a chinese drywall. in both cases the circumstances are that through no fault of the individual, they find themselves in a situation in the case of connecticut where their foundations are crumbling there is no insurance coverage. we are pursuing relief in this case from the irs to use this as a casualty loss. there is ample precedent for this in the china drywall situation. our initial discussions with both the commissioner and
secretary minasian have been very positive. in connecticut the taxpayers association has been incredibly supportive. any advice or recommendations and could we beseech you for the national taxpayers association. >> i have been aware of this problem and had my staff attorneys meet with chief counsel attorneys of the irs to look at the law pertaining to lost inductions and how it could apply in this instance. just this week we submitted to the irs chief counsel a request for priority guidance that the put this issue on their priority guidance plan. we pointed out how they could do it to grant relief to these taxpayers.
i will be more than happy to share that request with you. >> i would be delighted to receive that. we appreciate your continued advocacy. this is something that impacts people and now estimated more than 30,000 people in connecticut will be impacted by this. it actually runs from canada to the south, we are trying to forewarn people. i cannot thank you enough about the cooperation we have received today from the irs and treasury. i view that in large part because of your involvements of the text. association involvement. with that, with a task if at some point never here but i would love to get your opinion on the japanese system of collecting and simplifying their
tax code. what opinions you might have on that. that is not a question for here but perhaps later i can follow up with you. i think the committee for indulging me and i yelled back my time. >> anytime mr. larson. i now recognize the gentleman from north carolina. >> thank you. i like to ask you about a subject that came up in one of your forms last year. tax practitioner and i will raise concerns about statistical audits many that are done for research purposes by the irs. although you acknowledge the importance of these euros recognize that they could be painful for taxpayers. even described the taxpayer as a guinea pig. i was concerned about these audits. you mentioned a couple of potential solutions at the formless share. at the time you said you had only been discussing these
options internally. has anything involved in these? >> is representative, i represent taxpayers for 27 years. i had to sit through the predecessor to these audits and the tax compliance program. it was expensive and painful for the taxpayer and representative. i recognize the importance of the audit so we don't go out and willy-nilly people who should not be audited. we need statistical gathering. my thinking is that they are doing a service for the public. random audits, there may be nothing wrong with the returns at the end of the day but they're using it for data gathering. if they're doing the public service they should be paid. either that, or, maybe we do not assess the tax at the end of the audit.
we found the errors but they sat through this for the public good. maybe we don't assess the tech so we found, or we give them compensation for sitting through it. i suggest that be nontaxable. >> yesterday a report was released on the national research program employment taxes. included the irs doesn't even have a formal plan to timely analyze let alone actually use the ted it collected. so, do you believe the irs should continues to subject taxpayers or guinea pigs to these random offense if there's no plants use the information? shouldn't the irs use the data. it will pay folks for the data with your suggestion, shouldn't they use it? or just shut down the program if
there's a plan to use it? >> i don't think they should shut down the program. they need to use the data. i will look carefully at the gao audit because that gives a plan on how the irs could use it. think it needs to be an organization that uses the data it has. often it doesn't develop strategies for takes a long time to get it into operation. that's inexcusable. >> listening to your answer to the question on technology in the irs, it seems like the irs has difficulty with technology and its basic functions. this is certainly above it to makes it perhaps more disturbi disturbing. >> i think the irs is challenged in a lot of ways.
>> that's an understatement of the day. i'll back. >> i now recognize the gentleman from new york. >> thank you. thank you missiles and for participating. recently my good friend and colleague, john lewis introduced a bill, the taxpayer protection act of 2017 which i'm a cosponsor of. 's to repeal the private debt collection program. to think the irs should outsource federal tax collection? should a new irs have the authority to do this? hire private companies to collect unpaid taxes. >> it is my personal and professional opinion that the collection of taxes and inherently government function. it requires the exercise of judgment and discretion to do it right. and take into consideration the facts and circumstances of
taxpayers. congress has made the decision to create this outreach and now my focus is on how the irs is implementing this provision. i have a lot of concerns about how it's been implemented. >> for-profit? >> i think that's part of the fundamental flaw. whatever you say about the irs, i think that collection employees understand the goal of collection is to bring taxpayers into voluntary compliance. that might mean you're focusing on the future that they be able to pay going forward and will deal with their debts later. the private debt collectors have the incentive to collect tax the amount before them and get their commission. they have no incentive to think about voluntary compliance going forward. >> in my mind my concern about criminal justice reform and privatizing the prisms, we need
to fill them in that so they get paid. in terms of the atc there's been a great concern about fraud in the program itself. i want your thoughts on how much is fraud and how much is mistakes made in terms of filing and filling out their proper papers. for instance a goldman sachs didn't run just to demonstrate that even the most billing can do it wrong. but you have to make it more efficient and more accessible? >> in my annual report to congress i made a legislative recommendation that was designed around trying to minimize the errors and fraud in the itc. i've attached it to my testimony. most of the ears are attributable to the complexity of the law.
the complexity also creates opportunities for others to gain it. a lot of the up your fraud comes from unregulated prepares that are preying upon an unsophisticated population and selling them something too good to be true. you have different things playing around. i believe there are things you can do both administratively and legislatively to minimize improper payments. some of that is going to the design and others into the outreach and education and oversight the irs needs to do on this issue. >> for the integrity of the program itself we need to be vigilant. also understand the complexities in terms of the clientele of their ability to fill out the forms properly. thank you for holding hearing today in a bipartisan spirit. we have been working together
and issues in relation to taxpayers relationship with the irs. it's not always pleasant. we need to keep an eye on it to help you do your job and help us store job. but also help protect the interest of our constituents, the u.s. taxpayer. >> direct message emily from tennessee. >> you for allowing me to sit on the committee. although i'm not a member of the committee. want to thank you for the work that you and your folks do. as you said at the beginning of your comments, most people do want to pay their fair share and just be left alone. they understand the have a responsibility to pay taxes in the u.s. has about 90% of voluntarily tax compliance rate. that has always been receive
fair and impartial. in recent years we've seen some of that impartiality. that is part of or seen in the general population, they have lost the trust in the irs. your agency is important in helping us make sure that we have at least one reach into that. one of the things i wanted to go to is the complexity of the tax code doesn't help. that's up to congress to reform the tax code so can be simpler. the irs is also a unique creature and then it doesn't have a regulatory process like other agencies do. so they should these guidances and they don't solicit public comments like you would in a federal agency where there would be a change in opportunity for comments. on the irs website has a section
that says, understand the irs guidance. it has seven kinds of guidances that they should be familiar with. the irony is that irs acknowledges within the statement of they say, it may be puzzling and the mystery. so i wanted to ask you to talk about those guidances and what we can do to keep that from happening. and how that actually rolls out to takes place. >> the irs has many different guidances and some to go through the administrative procedure act and noticing, the regulations we do. it believes giving out guidances helpful to taxpayers. rather than going through what it views as a cumbersome regulatory process which would require noticing, it does stuff
to get out faster. the downside is if you say there's no vehicle they have designed for public comment that doesn't mean he couldn't do it that way. a very concerned about that. i'm more concerned in my written about this is more serious problem that they're moving more toward faqs which are great in the sense that you get things up quickly, but you can tell when a change has been made unless you printed out every single day and track it word for word. they are not reliable so if you say you rely on an faq and the irs says that's wrong, that is no defense. so is that could stand more you're leaving the taxpayer and a vulnerable situation. . .
is about a dollar. and i'm wondering what the cost would be for a direct deposit or also how we might address that issue, the cost of the time using prepaid debit cards and whether the irs uses the debit express cards. >> this is something we identified in the annual report this year, it is so much more inexpensive to do direct deposit and we have a large part of the population without a bank so rather than them going to check cashing places etc., if they are already participants in this direct express program run by treasury why can't we put tax refunds on it and frankly i am baffled why we don't you.
they have churches that already have this product and it just makes sense so i don't have a good answer for you and that is why we needed a serious problem. why aren't we using it? >> does this open us up for fraud if we do not utilize the system? >> the concern is obviated by the fact people have to go to a bank to prove their identity so you have the requirements for then about proving your identity to open a bank account and that's what they have to do for direct express. it's more than they would have to do to just get a card from some check cashing place. >> that is assuming you can use that product for the refund. we now use prepaid debit cards but having gone through that so that's what i'm talking about when you expose yourself to god whereas if we utilize the direct express debit card we wouldn't have that problem.
has there been any discussion about allowing taxpayers to use prepaid debit card or tax payments? >> for payments, i think they can if they had the irs is working on that accepting it online, different ways you can make electronic payments directly. part of the problem, with your online account you can make the payments that you do have to be able to sign on as a taxpayer and some of the security is very high for that. >> what is the cost to process a check from a taxpayer? >> i don't have that information right here that i can get the check versus direct deposit versus a debit card. >> we can agree -- >> significantly less. >> thank you very much. mr. chairman, i yield back.
>> i want to thank you for your leadership and like i said i've heard a lot of good things to. identity theft has been huge in florida. it's big and i've got to tell you a maybe two or three years ago it seems that it is a little better today but i would like to get your take on where we are with identity theft. >> i think it is going better than it has. three things have happened that have made a difference. one is the legislation you all passed getting us the w-2 information by january 302001 because that lets us if we can get the employer w-2, we can see what is the legitimate w-2 versus the altered.
the other thing that is happening is they are now requiring software companies to ask for drivers licenses when they are filing electronic returns and that helps identify if it is a legitimate taxpayer or identity thief and third is a program we are trying to get more employers to use. there is a code that is unique to that employer and when they go to file electronically when it is put in we can tell this is the correct w-2 and it's not an identity theft. >> let me ask for the sake of time, how much criminals or syndicates are outside of the u.s., do you have any sense of that? >> i really don't know. the criminal investigation
bureau is working with agencies to monitor that and it is so hard to track this stuff down. >> there's a bunch in the states but also other countries. mr. crowley brought up through the income tax credits i know there is some complications in filing the 24% fraud, tins of beans of dollars a year. what is your take on that and why can't we seem to improve it is a lack of resources to educate people because i am sure that is part of it. he asked how much a part of it that i'm curious from your standpoint where we are on that. >> i don't think there is anything more we can do to bring it down. it's education, doing specific audits, doing other kind of compliance activities and
signing the petition knowing what we know we can change the design a little bit. >> does it make sense to have higher standards for preparers? q-quebewould that make a differ, education and training? >> i do think that there have to be minimum competency standards for the preparers. we know that the unregulated and unaffiliated preparers not with a large preparation firm are the greatest source of errors for the population and the preparer base. >> you were here i think 20 years ago when they did the irs reforms? >> i was on the committee as a representative of a low income taxpayer. >> and you thought it made a big difference you said in your
testimony so in terms of where we are today it seems like we can work together in a bipartisan basis to make reforms that make a difference would you agree? >> yes and the way that it was done in 98 when you heard from a diverse group of people, it made an incredible record and when you read those hearings again they are impressive. >> we want to work with you and have multiple hearings to see if we can't make a difference. one other thing or couple things that has come up is small business disputes. it's not always a lot of money but there's more in professional fees than just paying the check itself. where are we on that?
>> that raises the issue not just on the audit side but the appeals function and that is one of my concerns that the irs has moved to a more centralized and personal appeals function which was the safety valve for small businesses. there are 12 states that do not have an appeals officers said they don't understand the conditions of that state and we should take a look and see how we can make it work as the safety valve that it was intended to be. >> protecting taxpayers rights is a key foundation. what additional tools could youu use to make it even more effective on behalf of taxpayers? >> i've written about this in my annual report i need recommendations about codifying and strengthening the hand
codifying the advocate directive where i can order them to change the process that would affect groups of taxpayers and those are very important but right now the directive is just administrative. >> i would like to thank the witnesses for appearing before us and members have two weeks to submit questions. those questions and your answers will be made a part of the record. with that, the subcommittee stands adjourned.
lower court's ruling. justice ileana offered the majority opinion, justice clarence thomas wrote a concurring opinion. justices brought air and ginsburg roundehere andginsburg3 ruling, chief justice roberts, justice kennedy and alito were in the dissent. the new justice didn't participate in this ruling because he wasn't on the court for the case was heard. the case was originally argued on december 5, 2016. it's about an hour. >> punic mr. chief justice may i please the court. this involves the constitutionality of two congressional districts in north carolina that should be familiar to the court because they've been before the court on multiple prior occasions.