IRS Information Technology Accountability Act

Mr. Speaker, pursuant to House Resolution 831, I call up the bill (H.R. 5445) to amend the Internal Revenue Code of 1986 to improve cybersecurity and taxpayer identity protection, and modernize the information technology of 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 may have 5 legislative days within which to revise and extend their remarks and submit extraneous material on H.R. 5445, currently under consideration.

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

Mr. Speaker, we have a significant opportunity to improve tax administration as we take up H.R. 5445, the bipartisan 21st Century IRS Act. This bill seeks to move the Internal Revenue Service into the 21st century by placing a renewed focus on modernization of the IRS and improving taxpayer experience.

Before we talk more about this bill, I would like to take a moment to thank the bill's original cosponsors, Representatives Mike Bishop of Michigan and Suzan DelBene of Washington, for their strong leadership on this bill. I would also like to thank Representative John Lewis of Georgia and his staff for being such great partners in this effort.

I think this bill and the others we have put forward as part of the larger IRS package are all the better for having worked through this process in a bipartisan fashion. Together, we have held 13 formal committee events over the past 3 years, hearing testimony and receiving comments from a diverse group of taxpayers, practitioners, and advocacy groups; and together, we have developed what we believe are bipartisan solutions that help improve the agency and, more importantly, the experience of all taxpayers.

Now turning to this bill. Over the past 2 years, the Ways and Means Oversight Subcommittee has spent significant time, on a bipartisan basis, focusing on IRS management of information technology and cybersecurity. Through this process, we sought to have deeper,

ongoing conversations with the agency to better understand its current and future needs and challenges.

We have also met with taxpayers and other stakeholders to understand their experiences and concerns, and we have sought to provide strong public accountability for the IRS' IT and cybersecurity failures where we felt it was most needed. These collective interactions helped to shape many of the provisions in the bill before us today.

While the IRS spends approximately $2.4 billion annually on IT, it continues to struggle with undertaking and completing large IT modernization efforts to update its legacy systems, some of which date back to the 1960s. In the era of 5G and broadband Internet, it is still hard to imagine why the IRS continues to use technology our children wouldn't even be able to recognize.

In addition, the IRS continues to face ongoing cybersecurity threats and fraud schemes, which seem to exploit IRS systems and steal taxpayer information and refunds. These issues result in the waste of billions of taxpayer dollars spent maintaining old systems.

We have also seen these outdated systems severely impact the IRS' ability to assist taxpayers. Whether it be long processing times for tax refunds or frustrations over the inability to reach the IRS by phone, the IRS' underlying IT affects all aspects of the taxpayers' experience.

For example, just yesterday we saw the magnitude of what can happen when the IRS IT systems fail. Yesterday, starting at 2 a.m., dozens of IRS systems integral to a successful filing season went down, leaving the agency unable to accept tax returns on the day when they were needed the most. While the full impact of these outages remains to be seen, this is simply unacceptable.

The bill before us today seeks to address many of these issues. It starts by requiring ongoing strategic IT planning, codifying and clearly laying out the roles and responsibilities of the chief information officer, and requiring additional oversight of two of the largest and most problematic IRS IT systems. Doing so strengthens IRS accountability for its IT modernization efforts, ensuring that the IRS spends taxpayer funds in ways that produce measurable results.

This bill also encourages the IRS to more proactively work with its State partners and the private sector to proactively combat criminals who use taxpayer information to steal tax returns. The bill provides the IRS with additional authority to allow the agency to work more closely with its partners.

Finally, the bill also sets forth a new goal for the IRS to have secure online accounts available for taxpayers and their designated preparers by 2023. The IRS has taken far too long to provide even the most basic of online services, and this bill ensures that the IRS will focus on providing more robust online services for those who want them.

As we think boldly about the IRS of the future, one that is oriented towards helping taxpayers, we should also think boldly about what a modern IRS looks like:

One where taxpayers can easily access their information, day or night; readily have their questions answered; and quickly resolve issues;

One where the IRS can be trusted to adequately protect taxpayer information; proactively combat identity theft, tax return fraud; and readily assist taxpayers when they are victims of this fraud;

And one where the IRS meets the taxpayer where they are, whether it be online, in person, or on the phone.

It also means having an IRS that is held accountable when modernization efforts fall short. As we work towards the first major overhaul of the IRS in 20 years, our goal is to ensure that these reforms are built upon IT systems that are state-of-the-art, ones that work for the taxpayer, not against them. These reforms are necessary and long overdue.

I urge my colleagues to support this bipartisan bill.

Mr. Speaker, I include in the Record a score that we have received from the Congressional Budget Office.

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. 5445, the 21st

Century IRS Act.

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

pleased to provide them.

Sincerely,

Keith Hall,

Director.

Enclosure.

H.R. 5445--21st Century IRS Act

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

H.R. 5445 aims to:

Combat identity theft and tax refund fraud at the Internal

Revenue Services (IRS);

Create an automated system to verify taxpayer information

for authorized users;

Modernize information technology (IT) systems within the

IRS; and

Expand the use of electronic information systems within the

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

Mr. Speaker, I yield 3 minutes to the gentleman from Kansas (Mr. Estes).

Mr. Speaker, I yield 3 minutes to the gentleman from North Carolina (Mr. McHenry).

Mr. Speaker, I yield 4 minutes to the gentlewoman from Indiana (Mrs. Walorski).

Mr. Speaker, I yield 6 minutes to the gentleman from Michigan (Mr. Bishop).

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

Mr. Speaker, I, too, want to thank, once again, the ranking member, the gentleman from Georgia (Mr. Lewis),

for his hard work on this issue, and I appreciate the staff's dedication to getting this to the floor today. This is a thoughtful, bipartisan piece of legislation that will help move the IRS forward and refocus the agency on the taxpayer experience, and I urge all Members to support this legislation.

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

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

Mr. Speaker, I thank the chairwoman for yielding.

Mr. Speaker, I rise today to support my bill, H.R. 5445, the 21st Century IRS Act, a bill that will improve cybersecurity and taxpayer identity protection, as well as modernize the information technology system at the IRS. I am grateful today for the bipartisan support. This is a very important issue.

One of the most common, heartbreaking issues I have had to deal with on a recurring basis since I have been elected a member of elected government is identity theft. That is why I wrote the Michigan Identity Theft Protection Act while serving in the Michigan Senate.

I am disheartened to say, however, that since coming to Congress, those stories of identity theft have only become more frequent and are often compounded by problems in dealing with the IRS, many of which center around the delays due to their outdated technology.

Take, for instance, my constituent, Lance. Lance filed his 2015 Federal return in March of 2016. In May of that year, he was notified that his refund was being held until the IRS could verify certain items. Over the next 8 months, Lance tried multiple times to get additional information from the IRS. Finally, in January, they told him that his case had been closed, yet he had not received his refund.

Over the next 6 months, his case was reopened and went from being flagged for identity theft, then cleared, only to be flagged again. Finally, after 18 months of back and forth with the IRS, Lance received his refund of tens of thousands of dollars.

While we want to be vigilant in protecting taxpayers' identities, these unnecessary delays are bad for everyone. I know I am not alone in this Chamber. Most of us, if not all of the Members of this body, have heard a distressed story from a constituent about how they had their tax refund stolen.

That is why my legislation will codify a current public-private partnership, whereby the IRS engages with States and industry to find ways to reduce identity theft tax refund fraud. This will provide them with additional tools to proactively identify trends and schemes as they come about. By heading off ID theft at the beginning of the process, we can eliminate the need for the IRS to chase down fraudulently paid refunds and reduce the burden on the unfortunate taxpayers who have had their identities stolen.

Mr. Speaker, another source of delay at the IRS and angst for our constituents comes from the severely outdated IT systems at the IRS. Take, for instance, another constituent of mine, Tom from Oakland County. Tom had a return audited, and the auditor mistakenly entered his income by misplacing a decimal point by two spaces and recorded Tom's income as being 100 times its actual amount. This resulted in the IRS telling Tom that he owed a tax bill 18 times his income for that year.

After my office and the Taxpayer Advocate's Office got involved, the IRS fixed the issue but told Tom that he might still receive collection letters until the computer system was able to update with the correct information. This uncertainty coming from the IRS is simply unacceptable. The outdated technology at the IRS is not the fault of the taxpayer.

Now, to address this issue, this legislation includes an important provision that my colleague, Mrs. Walorski, has worked on for a very long time. It provides much needed accountability by setting forth clear guidelines, processes, and responsibilities for the IRS officials who are responsible for maintaining and modernizing the IRS IT.

It also includes a provision put forward by Mr. Renacci, which would allow businesses to file their 1099 information through a taxpayer- friendly internet portal. This will ease the compliance burden for taxpayers and businesses and allow the IRS to get tax information in a timely manner, which will improve the quality and accuracy of the security checks.

In conclusion, Mr. Speaker, we live in a world of constantly emerging threats and sophisticated criminals who are probing and trying to gain access to the IRS, and, ultimately, the taxpayer's information. The 21st Century IRS Act will help move the IRS in the right direction with meaningful and bipartisan solutions.

Mr. Speaker, first, I would like to thank our Oversight Subcommittee leaders, Mr. Lewis and Ms. Jenkins, for all of their efforts on the important bills that we have been considering this week.

A few weeks ago, I had the opportunity to visit with constituents of mine who are serving low-income taxpayers in our community through the Volunteer Income Tax Assistance program. I am so pleased to see that this important partnership will be made permanent by legislation that we passed yesterday.

I am grateful to my colleague, Mr. Bishop, for his hard work and for working with me on this bill, the 21st Century IRS Act. It is an important bill that enhances needed reforms to enhance cybersecurity and online access for taxpayers, including small-business owners. It is long past time for the IRS to enter the digital age and to give taxpayers a safe, secure, user-friendly online portal to serve their needs.

As a former State Department of Revenue director and a tech industry veteran, I know firsthand that coordination between private sector technology experts and tax administrators at the State and Federal level can produce real results for taxpayers and a better user experience for all stakeholders. We should strive to harness technology to create a more seamless and dependable experience for American families who are becoming increasingly accustomed to conducting their financial business safely online.

Something we saw yesterday is an ongoing challenge for the IRS. By codifying things like the Security Summit and the role of the IRS CIO, this bill should create some continuity in terms of prioritizing technology improvements and improving the taxpayer experience.

I am also glad that we are addressing improvements for small-business owners, like the development of an online portal for 1099 filings. I know small-business owners in my district and across the country are tired of waiting for more user-friendly, web-based systems, and this is a good first step for them. We should be streamlining the filing process so that they can spend less time and money on tax compliance and more on growing their businesses.

While this bill is clearly an incredibly important step forward, I would like to share the comments of a CPA who weighed in on the discussion draft of the legislation as a reminder that this is not the end of our work. He noted that cutting the IRS budget has been steadily cutting the effectiveness of the IRS for many years, and he said: ``We are at a perilous point where honest taxpayers are extremely frustrated. Fix it quick, or it will become too broken to fix.''

After hearing from IRS administrators, taxpayers, and technology experts over the past couple of years, I think we may be in or approaching the red zone of becoming too broken to fix. Just like a pothole that would cost $1,000 to fix today or $10,000 to fix tomorrow, we need to make some smart investments in IRS technology today before they become insurmountably expensive tomorrow.

Around 64 percent of IRS hardware is aged and out of warranty, and 32 percent of software is two or more versions out of date. Systems that the IRS relies on to store taxpayer data are failing, and they have serious concerns that they could break down or fail to withstand a cyber attack.

These are not issues we can let fester any longer. Let's build on the progress we are making here today to get those systems modernized and really get the job done for American taxpayers.

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

Mr. Speaker, I rise in strong support of H.R. 5445. This bill is an important first step to bringing the IRS into the 21st century.

Let me begin by thanking the gentlewoman from Kansas, Ms. Jenkins, for her hard work on this bill. I would also like to thank our colleagues--the gentleman from Michigan (Mr. Bishop) and the gentlewoman from Washington (Ms. DelBene)--for their good work and their leadership on this bill. I would also like to thank our staff for helping us closely examine the IRS operation.

Before we put pen to paper, we took our time to learn about the agency and the taxpayer experience. In the past year, the Oversight Subcommittee held five hearings and four roundtable discussions on this bill. The staff also went on site visits to see the issues firsthand. In every meeting, the subcommittee heard concerns about outdated technology, the need for better coordination, and the increasing security threats.

In response, the committee developed a bipartisan bill that will improve the IRS IT system. The 21st Century IRS Act will also strengthen the role of the IRS chief information officer. Most importantly, H.R. 5445 will protect taxpayers' information and fight identity theft and tax refund fraud.

The 21st Century IRS Act addresses some of the most commonsense taxpayer service and IT challenges. It also continues the work of the former IRS Commissioner, who took steps to bring government and industry together to address some of these issues.

Mr. Speaker, make no mistake, much more is needed. As we all know, identity theft and tax fraud continue to challenge tax administration. Congress' decisions to cut the agency's budget by nearly $1 billion over the past 8 years has not helped. We all understand that the IRS is in desperate need of more funding and more staff. These reductions harm both taxpayer services and tax administration.

Unfortunately, the chickens are coming home to roost--and I know something about chickens coming home to roost; I used to raise chickens--and showing the Nation that this path is not sustainable.

Yesterday, the IRS experienced a number of IT challenges. Although the IRS extended the tax filing deadline,

this experience showed the Nation how important it is that Congress invest in the IRS systems and operations. Mr. Speaker, I believe that each and every one of us cares deeply about the agency's ability to provide service to taxpayers. The 21st Century IRS Act is an important first step in this process.

I urge my colleagues to support this bill. Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 5 minutes to the gentlewoman from Washington (Ms. DelBene), the Democratic lead cosponsor.

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

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

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

Mr. Speaker, this is a good bill and a necessary bill. Again, I thank the chair, the gentleman from Michigan (Mr. Bishop), the gentlewoman from Washington (Ms. DelBene), and all of our colleagues for their hard and good work. We should be very, very proud of the process and the product. I urge all of my colleagues to vote ``yes'' on this bill.

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

Mr. Speaker, I rise in strong support of the bipartisan IRS reform package, including the 21st Century IRS Act.

There is a trust gap that exists between taxpayers and the IRS, and the IRS' information technology systems are a good example of why. The IRS has an urgent need to overhaul its IT systems, some of which date back to the Kennedy administration. But repeated mistakes, big and small, undermine our trust in them.

Take the $12 million they spent on a new email system they couldn't use. The inspector general report revealed the IRS bought it without first determining project infrastructure needs, integration requirements, business requirements, and whether the subscriptions were technologically feasible.

Or take the Return Review Program, the RRP. The new fraud detection program came in years behind schedule and hundreds of millions of dollars over budget. Here are just a few of the reasons the IRS cited when it put the RRP into a strategic pause in 2014.

They said, they paused ``to determine the priority and direction from IRS senior leadership; to articulate and align on RRP's role in the broader business vision; to ensure clear and concise understanding of scope, cost, and schedule'' with contractors; and, finally, budgetary constraints.

Mr. Speaker, unforced errors are turning vital projects into boondoggles. We could be applauding the IRS for buying a system off the shelf. Instead, we are scolding them for not asking the most basic questions before buying it.

I hear complaints about the IRS' budget, and I think about the RRP. Senior leadership gave no direction, no one knew how it would fit into the big picture, and contractors were way out of the loop. Everyone essentially ran in circles until they ran out of money. You know what? More money can't fix failed leadership or a broken culture. Better guidelines, codified rules, and more intentional strategic planning can.

That is why I introduced H.R. 5362, the IRS Information Technology Accountability Act, and I am thankful it was included in the 21st Century IRS Act. My bill takes some important steps to prevent future boondoggles and instill accountability.

Number one, codifying the responsibilities of the chief information officer, or the CIO; two, requiring the CIO to develop, implement, and update a multiyear IT strategic plan; and three, requiring regular coordination between the CIO and the chief procurement officer.

It also singles out two major projects for independent verification and validation. The first is CADE 2. It is still years from completion and almost a decade and $1 billion spent. The other, Enterprise Case Management, is a system that was supposed to be used agency-wide but was suspended because the IRS bought software that couldn't be used agency-wide. These projects need to be on a better trajectory.

Mr. Speaker, I am proud we are taking important bipartisan steps to close this IRS trust gap. I want to thank Chairman Brady, Chairman Jenkins, and Mr. Bishop for all of their hard work on this bill. I urge my colleagues to support the 21st Century IRS Act.