Improving Assistance for Taxpayers Act

Mr. Speaker, pursuant to House Resolution 831, I call up the bill (H.R. 5444) to amend the Internal Revenue Code of 1986 to modernize and improve the Internal Revenue Service, and for other purposes, and ask for its immediate consideration in the House.

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks and include any extraneous material on H.R. 5444, currently under consideration.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, today we are taking the biggest and boldest steps in 20 years, to redesign the IRS with a singular focus, taxpayer service.

This bill will redesign the IRS for the first time in two decades. It refocuses the agency to live up to its mission of putting taxpayers first. Finally, it will rein in its enforcement powers to prevent future abuse.

There are two important pieces of legislation being considered before the House today, H.R. 5444, the Taxpayer First Act; and H.R. 5445, the 21st Century IRS Act. These bipartisan bills, the product of 2 years of work by the Committee on Ways and Means, will make the IRS a truly taxpayer-first agency in a number of different ways.

First off, this bill puts an emphasis on customer service. We are requiring the IRS to submit to Congress plans to restructure the agency to improve efficiency, enhance cybersecurity, and better serve taxpayers. This will guarantee that the IRS is living up to its ``quality service'' motto, while holding the agency accountable if it fails to meet these standards.

In addition, our legislation encourages the IRS to adopt commonsense customer service features commonly seen in the private sector, such as a call-back option.

Secondly, we are overhauling the IRS' enforcement tools so families and small businesses can't have property seized without fair notice and due process. Over and over again, we have heard stories from across the country of absolutely tragic abuses of power by the IRS.

For example, we heard from Andrew Clyde, who served three combat tours in Iraq. Then he came home and opened a successful small business in Georgia, only to have the IRS unfairly seize $950,000 from him. Our legislation prevents outrageous enforcement abuses like this to protect American taxpayers from unfair seizures.

Thirdly, the Taxpayer First Act reminds the IRS they are not just an enforcement agency, they are also our tax administrator. That is why this bill changes the title of the IRS chief from Commissioner to, more accurately, Administrator.

Additionally, and this is important, Mr. Speaker, we are shifting the burden of proof back onto the IRS when examining taxpayers. This legislation establishes an Independent Office of Appeals within the agency to ensure that taxpayers receive a fair and impartial review of disputes they may have with the IRS.

It shouldn't take a Freedom of Information Act request to see what evidence the IRS is bringing against you. This legislation will require that the IRS provide you with your own case file prior to any review of your dispute with the agency. It puts taxpayers on a level playing field, which is where they deserve to be.

In the 21st Century IRS Act, we are revamping the IRS' nearly ancient technology and better positioning the agency to proactively combat cyber threats.

Right now, IRS technology is so outdated that some systems date to the 1960s, and fax machines are still used for some official communications. This bill modernizes the IRS and ensures the agency is accountable for the billions of dollars in IT that it spends each year.

Lastly, the 21st Century IRS Act enhances the agency's ability to combat identity theft tax refund fraud by strengthening the IRS' partnership with States and with cybersecurity experts.

This bill requires the IRS to practically partner with States in the private sector that effectively combat identify thieves trying to steal our refund.

I want to thank Oversight Subcommittee Chairman Lynn Jenkins and Oversight Subcommittee Ranking Member John Lewis for their tireless work on this important bill.

With the new Tax Code, it is time for a redesign of our tax agency. This bipartisan legislation truly refocuses the IRS to make it a taxpayer-first agency.

Finally, Mr. Speaker, before I turn over the floor, I would like to recognize a good friend and trusted policy adviser, and by every measure, one of the very best to ever serve the Ways and Means Committee in the House, Mr. David Stewart.

David began his congressional journey in 2000, when he came to intern for Ways and Means Committee member, Congressman Phil English. Over his career as a staffer, David became a trusted voice on policy for Speaker John Boehner, for Speaker Paul Ryan, and, 2\1/2\ years ago, for me, when he joined the Ways and Means Committee as staff director.

This past year, with David's steady leadership and immutable resolve, we were able to pass the first tax reform in a generation, which has boosted our economy and helped so many American families. David's focus has always been on making lives better for all Americans, and I stand here to today to tell him: Job well done.

David is a selfless public servant. He sacrificed so much time away from his family--his wife, Betsy, and his daughters, Grace and Poppy-- and yet he has served his nation so well.

To say David works hard is an understatement. Once, when he was asked how many hours he worked per week, David replied, simply, with, ``A lot.'' This also shows David's wit and his wry sense of humor that has always made busy days brighter.

His dedication to mastering intricate policy is unmatched, and I know, Mr. Speaker, I speak for all members and staff of the Ways and Means Committee when I say: Thank you, David, for your service to the House and the Committee on Ways and Means. You will be greatly missed around here, my friend.

House of Representatives,

Committee on Financial Services,

Washington, DC, April 12, 2018.

Hon. Kevin Brady,

Chairman, Committee on Ways and Means, Washington, DC.

Dear Chairman Brady: I am writing to you regarding H.R.

5444, the ``Taxpayer First Act''. There are certain

provisions in the legislation which fall within the Rule X

jurisdiction of the Committee on Financial Services.

In the interest of permitting your committee to proceed

expeditiously to floor consideration of this important bill,

I am willing to waive this committee's right to sequential

referral. I do so with the understanding that by waiving

consideration of the bill the Committee on Financial Services

does not waive any future jurisdictional claim over the

subject matters contained in the bill which fall within its

Rule X jurisdiction. I request that you urge the Speaker to

name members of this committee to any conference committee

which is named to consider such provisions.

Please place this letter into the committee report on H.R.

5444 and into the Congressional Record during consideration

of the measure on the House floor. Thank you for the

cooperative spirit in which you have worked regarding this

matter and others between our respective committees.

Sincerly,

Jeb Hensarling,

Chairman.

Mr. Speaker, I yield the balance of my time to the gentlewoman from Kansas (Ms. Jenkins), and I ask unanimous consent that she may control that time.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, today marks a significant step forward for the American taxpayer as we take up the bipartisan Taxpayer First Act.

The goal of this bill is simple: move the Internal Revenue Service toward being a truly customer service-focused agency, placing a renewed focus on treating taxpayers with respect and dignity.

Mr. Speaker, I want to thank the Ways and Means Oversight Subcommittee Ranking Member, John Lewis, for cosponsoring this legislation with me.

Together, the subcommittee held 13 formal committee events over the past 3 years, looking at many aspects of how the IRS functions and where improvements are clearly needed. It is in all of our interests for taxpayers to know that the IRS is treating them fairly and with respect.

As a CPA, Members might have heard me talk before about my concerns with the interactions between the IRS and taxpayers. Not only have I heard these concerns while practicing in the private sector, but in my congressional office as well.

In handling constituent services requests through my office, I have found many instances of just outright lack of common sense in administering our Tax Code. As we looked at what changes needed to be made, we focused on the relationship between taxpayers and the government. That means a customer service experience akin to what Americans expect from the private sector, with online services, callback options, and improved support on the phone. To make sure taxpayers receive a fair and impartial review of disputes, we established the Independent Office of Appeals.

This commitment to fair and impartial treatment is the bedrock of the faith Americans place in the IRS.

The vast majority of tax revenues come into the Treasury voluntarily. According to the National Taxpayer Advocate, only 2 percent of all tax revenue collected comes from IRS enforcement actions. A service- oriented, taxpayer-first IRS is key to supporting voluntary compliance.

Our bill also makes permanent the IRS Free File Program, which is not only a win for the taxpayer, but saves the IRS time as well. This commonsense provision is one of the many included in this legislation that has strong bipartisan support and furthers the IRS mission to promote electronic filing.

This bill also includes important taxpayer protections to ensure that the IRS enforcement powers are fair and transparent. For example, this bill includes safeguards to ensure that individuals and small businesses are protected from improper seizures by the IRS.

Lastly, the bill tasks the IRS to develop and submit to Congress a comprehensive plan to restructure the agency, ensuring that it is best positioned to meet the needs of taxpayers today and into the future.

In short, this is the reform I promised my constituents in Kansas and the reforms that all Americans deserve.

Mr. Speaker, I would also like to note that we have received a score from the Congressional Budget Office, which I include in the Record.

U.S. Congress,

Congressional Budget Office,

Washington, DC, April 16, 2018.

Hon. Kevin Brady,

Chairman, Committee on Ways and Means,

House of Representatives, Washington, DC.

Dear Mr. Chairman: The Congressional Budget Office has

prepared the enclosed cost estimate for H.R. 5444, the

Taxpayer First Act.

If you wish further details on this estimate, we will be

pleased to provide them.

Sincerely,

Keith Hall,

Director.

Enclosure.

H.R. 5444--Taxpayer First Act

As reported by the House Committee on Ways and Means on April 13, 2018

Summary

H.R. 5444 would make a number of changes to the management

and oversight of the Internal Revenue Service (IRS). The bill

would:

Aim to improve customer service and the taxpayer appeals

assistance process;

Restrict certain IRS enforcement activities;

Modify the agency's organization; and

Change the operations of the U.S. Tax Court.

The staff of the Joint Committee on Taxation (JCT)

estimates that enacting the bill would reduce revenues by

$102 million over the 2019-2028 period, and CBO estimates

that enacting H.R. 5444 would decrease direct spending by $51

million over the same period. On net, H.R. 5444 would

increase deficits by $52 million over the period. CBO has not

completed an estimate of the bill's costs that are subject to

annual appropriation.

Because enacting the bill would affect direct spending and

revenues, pay-as-you-go procedures apply.

CBO and JCT estimate that enacting H.R. 5444 would not

increase net direct spending or significantly affect on-

budget deficits in any of the four consecutive 10-year

periods beginning in 2029.

JCT has reviewed H.R. 5444 and determined that it contains

no intergovernmental or private-sector mandates as defined in

the Unfunded Mandates Reform Act (UMRA).

Estimated Cost to the Federal Government

The estimated budgetary effect of H.R. 5444 is shown in the

following table. The costs of the legislation fall within

budget function 800 (general government).

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By fiscal year, in millions of dollars--

Mr. Speaker, I yield 2 minutes to the gentleman from Illinois (Mr. Roskam).

Mr. Speaker, I yield 3 minutes to the gentleman from Iowa (Mr. Young).

Mr. Speaker, I yield 4 minutes to the gentleman from Tennessee (Mr. Kustoff).

Mr. Speaker, I yield 3 minutes to the gentleman from Illinois (Mr. LaHood).

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, this thoughtful, bipartisan legislation will help refocus the IRS on its taxpayer service mission.

Mr. Speaker, I urge all Members to support this legislation, and I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, I appreciate the gentleman's courtesy, and I appreciate his hard work with Chair Jenkins moving this forward.

This is an example of--maybe people don't think it is earthshaking-- but being able to come together and deal with things that make a difference with the IRS, which is the largest voluntary tax compliance system in the world. It is very important. And I am pleased, with the reference to 13 hearings and a lot of the back and forth, being able to reach consensus.

But let me say, I wish that those two people who led this effort had been empowered to do a deep dive into some of the dysfunctionality that has been imposed on the IRS. Since 2010, the IRS is dealing with more and more returns which are more and more complex, and my Republican friends have slashed the people who work on it.

We haven't modernized the computer system which those of us who took our first computer programming in the 1970s, I think, would be equipped to work on. It is so outdated.

We have cut the people who were involved with enforcement. Now, I would wish that everybody would voluntarily comply, but everybody doesn't. And as a result, those people who work on enforcement make about $6 for the taxpayer for every dollar we invest in their efforts. And, more importantly, it is a signal that everybody is going to be treated fairly. The people who cut corners, who forget, or who outright cheat are taking away money from the government and putting the burden on others who not only have to pick up the slack, but the people who cheat get an unfair advantage in how they do business.

They are more profitable because they don't pay their full freight. That is stupid, unfair, and it is counterproductive. That is one of the reasons why we have a $450 billion tax gap--the difference between what is owed as a result of people's tax liability and what is paid.

My friends on the other side of the aisle have been involved with punishing the IRS for things real and imagined. But who has really suffered has been the taxpayer, people who can't get their phone calls answered. The IRS doesn't have staff in customer service who can readily answer concerns that taxpayers have.

I am outraged when I hear attorneys and accountants in my community say: Yeah, I had a client who had a legitimate claim and they would have gotten that $4,000 back, but I had to tell them that, because of the dysfunctionality and the underinvestment in the IRS, it would cost them more for me to fix it for them than they would get back.

That is a scandal. We ought to make sure that we have a fully functioning IRS that meets the needs of the taxpayers, that gives them the answers that they need, that makes a very clear signal that everybody needs to fulfill their civic obligations to pay their taxes, and that businesses that cheat or forget are not going to get an unfair advantage over people who work hard to follow the rules. Our deficit would be $450 billion less if we did this properly.

Mr. Speaker, I thank the gentleman because I wanted to make one other point. But I must confess that one of the other reasons that I am really deeply concerned about that now is that it wasn't just that we weren't able to do a deep dive on the causes of dysfunctionality and underinvestment in the IRS.

It is no secret that one of my highest priorities as a Member of Congress and as a member of the Ways and Means Committee, was to be there to help us fulfill our responsibility on that committee dealing with the resources necessary to rebuild and renew America.

It is no secret that America is falling apart while we are falling behind. We

have a growing gap in our Highway Trust Fund that has lost 40 percent of its purchasing power. We are not able to meet our current commitments, let alone the commitments we have in the future.

The Ways and Means Committee allowed the Superfund tax to expire. So now we have a Superfund to clean up toxic waste that has blighted communities across the country, but we no longer have a tax that pays for it. So that burden has been shifted to innocent parties and local government.

I have been working with the last three chairs of our Ways and Means Committee, asking that we have some robust hearings on our responsibility for transportation.

The Transportation and Infrastructure Committee deals with the authorization of the Surface Transportation Assistance Act, but the Ways and Means Committee is responsible for funding it. A couple of weeks ago, there was a hearing in the Transportation and Infrastructure Committee on our job. They heard from witnesses from labor, from business, the U.S. Chamber, trucking associations--a wide range of people who came in and asked us to raise taxes on them.

Mr. Speaker, I thank the gentleman. I really will wrap up. But we have had no hearing like the Transportation and Infrastructure Committee had. They brought all of the witnesses in to talk about our job.

The last three chairs of the Ways and Means Committee from my Republican friends, in 7 years and 3 months, have had exactly one witness on our responsibility to raise the revenue for transportation, not one hearing. We had 380 hearings. We had one 5-minute witness who talked about the need to meet our responsibilities.

Mr. Speaker, why do we have to go to the Transportation and Infrastructure Committee to hear our job? Isn't it about time that my Republican friends allowed us to have a week or two to listen to the wide array of people who want us to fulfill our responsibility to rebuild and renew America and to pay for it? It is past time for that hearing, and I hope we have it. And then we act on what people tell us.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I want to thank Chairman Brady for all of his great and good work and for all of his help.

Mr. Speaker, I rise in strong support of H.R. 5444. I am proud to join the gentlewoman from Kansas (Ms. Jenkins) in introducing the Taxpayer First Act.

I would like to begin by thanking the chairwoman for her good and great work on this bill. It was a wonderful opportunity and a great pleasure to work with Ms. Jenkins.

I would also like to thank our friend and colleague, the gentleman from Florida (Mr. Buchanan), for his determination to work together on behalf of the taxpayers.

Finally, I would like to recognize our staff--Karen McAfee, Peg McGlinch, Machalagh Carr, Rachel Kaldahl, Liz Navin, Lindsay Steward, Meinan Gogo, Adam York, and Jamila Thompson--for all of their hard, good, and great work, and we will never forget you.

Mr. Speaker, the process and the product should inspire each and every Member of this body. For over a year, the Ways and Means Oversight Subcommittee hosted hearings and roundtables. We listened and asked questions. We asked Democratic and Republican Members to provide feedback. We reached out to taxpayers and advocates. We negotiated. We took our time, and, Mr. Speaker, I believe that we did it right. Together, we developed a bill that improves the independent appeals process and taxpayer services.

Last month, the gentlewoman from Kansas (Ms. Jenkins) and I released a discussion draft of a bill that would strengthen the IRS and improve taxpayers' services. We reviewed the comments and tried to include fixes where there was agreement. The process was transparent and inclusive, and the product is strong and timely.

H.R. 5444 also makes commonsense updates to the structure of the IRS and the Tax Code. In particular, I am very proud of our work to improve IRS enforcement. For example, we were able to address a shocking issue that the National Taxpayer Advocate raised in her 2017 annual report to Congress.

It is hard to believe that the private debt collection program costs three times more than it collects. This flawed program targets and abuses thousands of low-income taxpayers by enrolling them in installment agreements that they simply cannot afford. That is not right. That is not fair. By removing low-income taxpayers from the private debt collection program, H.R. 5444 puts us on the right path.

Unfortunately, the IRS experienced serious system problems yesterday. I am glad that the IRS acted quickly and extended the tax filing deadline. These problems showed us that we need to have an honest talk with ourselves about the work ahead.

We all know that Congress cut the agency's budget by almost $1 billion since 2010. This reduction harmed both taxpayer services and tax administration. I have said time and time again that you cannot get blood from a turnip. I look forward to working with our colleagues to ensure that the agency has the tools and resources it needs.

It is also important that taxpayers, especially those who are of low income, disabled, and senior citizens, receive fair, quality, and timely help and support.

Through it all, Mr. Speaker, our subcommittee did good work, necessary work. From the beginning, we committed to bipartisanship, and we refused to abandon our course. Mr. Speaker, I am proud of our product and process. At every crossroad, we remembered the lessons from the past and chose to put the taxpayers first.

Again, I urge all of our colleagues to support this bill. I hope that we will continue to work together and improve the taxpayers' experience.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 3 minutes to the gentlewoman

from California (Ms. Eshoo), my good friend.

Mr. Speaker, I am pleased to yield 4 minutes to the gentleman from Oregon (Mr. Blumenauer), who is a member of the Health, Oversight, and Tax Policy Subcommittees.

Mr. Speaker, I yield an additional 2 minutes to the gentleman from Oregon.

Mr. Speaker, I yield an additional 1 minute to the gentleman from Oregon.

Mr. Speaker, I am pleased to yield 3 minutes to the gentleman from Illinois (Mr. Danny K. Davis), a member of the Ways and Means Committee.

Mr. Speaker, I yield 3 minutes to the gentlewoman from Alabama (Ms. Sewell). The Congresswoman is a member of the Ways and Means Committee.

Mr. Speaker, I yield myself such time as I may consume to close.

Mr. Speaker, working to improve taxpayer service is no easy task. Every person in this body agrees on the importance of better access to quality taxpayer service, whether it is online, over the phone, or in person.

The IRS is a complex organization that is responsible for a core function of our government. We asked for input from Members of Congress, Federal agencies, and the public. When we reached out, we were responsive and thoughtful. We will continue to work to improve the IRS, to support their staff, and to put taxpayers first.

Again, I want to thank my friend, the gentlewoman from Kansas (Ms. Jenkins), the subcommittee members, and all of the staff for their hard, great, and good work for this bill.

Most important, Members of Congress must remain focused on doing what is right, what is just, and what is in the best interests for every American taxpayer. I encourage all of our colleagues to vote ``yes'' on

Mr. Speaker, I want to thank Chairwoman Jenkins for yielding the time.

Mr. Speaker, I rise today in support of H.R. 5444, the Taxpayer First Act.

As I travel around my district, one of the common concerns that I hear and complaints that I hear is that the IRS is not user friendly, that it is not attentive and isn't efficient, effective, and accountable. We do a lot with this bill here today to change that. This is a good piece of legislation.

I would like to thank Chairwoman Jenkins as well as Ranking Member Lewis for their hard work and leadership throughout the drafting of this legislation.

Over the past several months, the House Ways and Means Committee and the Oversight Subcommittee, in particular, on which I serve, have focused on finding bipartisan legislative solutions which will make much-needed changes at the IRS. Ensuring an efficient, accountable, and transparent IRS is key to restoring the trust between taxpayers and the agency. It is also necessary for effective implementation of our reformed Tax Code.

We have a responsibility to provide taxpayers with the tools and resources they need to make filing their taxes simpler, which was also a major goal of tax reform.

We must ensure that the IRS puts customer service first so that taxpayers can have confidence that their information is protected and that we upgrade the IRS technology for the 21st century.

Unfortunately, it has been over 20 years since major reforms were made to the IRS, but through the passage of this legislation and others on the floor this week, we have an opportunity to finally bring about these changes.

I am also pleased that the Taxpayer First Act includes H.R. 5342, the Improving Assistance for Taxpayers Act, which I authored and introduced as part of this process.

Currently, the Office of the Taxpayer Advocate, located within the IRS, represents taxpayer interests and helps address both individual and systemic issues at the agency.

When it comes to addressing systemic issues, the Taxpayer Advocate can issue what is called a Taxpayer Advocate Directive. Unfortunately, these orders are not always responded to in a detailed and timely manner or even addressed at all.

My bill aims to improve this process. Specifically, the IRS would be required to respond to Taxpayer Advocate Directives within 90 days. We also establish an appeals process when the advocate deems necessary. If detailed and timely responses are not provided, the Taxpayer Advocate must report such instances to the Congress. These changes will improve accountability and ensure substantive and timely answers for taxpayers dealing with an issue at the IRS.

Mr. Speaker, after two decades and with a new Tax Code to be implemented, the time is now to improve the Internal Revenue Service through these bipartisan and commonsense reforms. We need to continue our work in putting taxpayers first, and I urge my colleagues to join me in supporting H.R. 5444.