[Senate Hearing 115-734]
[From the U.S. Government Publishing Office]


                                                  S. Hrg. 115-734

                    NOMINATION OF CHARLES P. RETTIG

=======================================================================

                                HEARING

                               BEFORE THE

                          COMMITTEE ON FINANCE
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                                 ON THE

                             NOMINATION OF

                CHARLES P. RETTIG, TO BE COMMISSIONER, 
                        INTERNAL REVENUE SERVICE

                               __________

                             JUNE 28, 2018

                               __________


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                    U.S. GOVERNMENT PUBLISHING OFFICE                    
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                          COMMITTEE ON FINANCE

                     ORRIN G. HATCH, Utah, Chairman

CHUCK GRASSLEY, Iowa                 RON WYDEN, Oregon
MIKE CRAPO, Idaho                    DEBBIE STABENOW, Michigan
PAT ROBERTS, Kansas                  MARIA CANTWELL, Washington
MICHAEL B. ENZI, Wyoming             BILL NELSON, Florida
JOHN CORNYN, Texas                   ROBERT MENENDEZ, New Jersey
JOHN THUNE, South Dakota             THOMAS R. CARPER, Delaware
RICHARD BURR, North Carolina         BENJAMIN L. CARDIN, Maryland
JOHNNY ISAKSON, Georgia              SHERROD BROWN, Ohio
ROB PORTMAN, Ohio                    MICHAEL F. BENNET, Colorado
PATRICK J. TOOMEY, Pennsylvania      ROBERT P. CASEY, Jr., Pennsylvania
DEAN HELLER, Nevada                  MARK R. WARNER, Virginia
TIM SCOTT, South Carolina            CLAIRE McCASKILL, Missouri
BILL CASSIDY, Louisiana              SHELDON WHITEHOUSE, Rhode Island

                     A. Jay Khosla, Staff Director

              Joshua Sheinkman, Democratic Staff Director

                                  (ii)


                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Hatch, Hon. Orrin G., a U.S. Senator from Utah, chairman, 
  Committee on Finance...........................................     1
Wyden, Hon. Ron, a U.S. Senator from Oregon......................     3

                         ADMINISTRATION NOMINEE

Rettig, Charles P., nominated to be Commissioner, Internal 
  Revenue Service, Washington, DC................................     5

               ALPHABETICAL LISTING AND APPENDIX MATERIAL

Hatch, Hon. Orrin G.:
    Opening statement............................................     1
    Prepared statement...........................................    35
Rettig, Charles P.:
    Testimony....................................................     5
    Prepared statement...........................................    36
    Biographical information.....................................    37
    Responses to questions from committee members................    56
Wyden, Hon. Ron:
    Opening statement............................................     3
    Prepared statement...........................................    72

                             Communication

Blum, Jeffrey M..................................................    75

                                 (iii)

 
                    NOMINATION OF CHARLES P. RETTIG.
                          TO BE COMMISSIONER,.
                        INTERNAL REVENUE SERVICE

                              ----------                              


                        THURSDAY, JUNE 28, 2018

                                       U.S. Senate,
                                      Committee on Finance,
                                                    Washington, DC.
    The hearing was convened, pursuant to notice, at 9:30 a.m., 
in room SD-215, Dirksen Senate Office Building, Hon. Orrin G. 
Hatch (chairman of the committee) presiding.
    Present: Senators Grassley, Crapo, Thune, Isakson, Portman, 
Toomey, Heller, Scott, Cassidy, Wyden, Cantwell, Nelson, 
Menendez, Carper, Cardin, Brown, Casey, and Whitehouse.
    Also present: Republican staff: Chris Allen, Senior Advisor 
for Benefits and Exempt Organizations; Chris Armstrong, Chief 
Oversight Counsel; Becky Cole, Policy Director; Ryan Martin, 
Senior Human Services Advisor; Nicholas Wyatt, Tax and 
Nominations Professional Staff Member; and Jeffrey Wrase, 
Deputy Staff Director and Chief Economist. Democratic staff: 
Chris Arneson, Tax Policy Analyst; Michael Evans, General 
Counsel; Ian Nicholson, Investigator; Joshua Sheinkman, Staff 
Director; and Tiffany Smith, Chief Tax Counsel.

 OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM 
              UTAH, CHAIRMAN, COMMITTEE ON FINANCE

    The Chairman. The committee will come to order.
    I would like to welcome everyone to today's hearing on the 
pending nomination of Mr. Charles Rettig, who has been 
nominated to serve as IRS Commissioner, a very important 
position in this country.
    Right now, the IRS is at a critical juncture. The American 
people are already seeing a myriad of benefits thanks to tax 
reform, as unemployment continues to drop and wages rise. And 
the IRS will be responsible for implementing these new policies 
smoothly and efficiently so that the new law's full benefits 
can be more quickly realized.
    After years of turmoil and controversy, I am hopeful that 
the IRS has finally started turning the corner. However, with a 
large governmental organization like the IRS, there is always 
room for improvement. Take for example, the problems of aging 
technology services. Some of the IRS's information technology 
dates back to the Kennedy administration. Unsurprisingly, that 
dated technology could inhibit the IRS's ability to interact 
coherently with 21st-
century technology that currently powers our country and much 
of the rest of the world. If confirmed, I expect Mr. Rettig to 
work with Congress to modernize the IRS's infrastructure and 
technology to bring the agency into our 21st century.
    Another major issue is that the IRS has an aging workforce. 
Right now, the majority of the IRS's workforce is over the age 
of 50 and nearing retirement. If that majority of the workforce 
were to retire at or around the same time, the IRS would face a 
shortage of knowledge and experience. If confirmed, I hope that 
Mr. Rettig will start working with Congress immediately to plan 
for the agency's future.
    As the IRS continues to implement tax reform, it must work 
with the Treasury Department to issue regulations and other 
guidance to ensure that taxpayers have certainty and 
predictability concerning this new law. It must also work with 
Congress to ensure that the new law is implemented and 
administrated as Congress has intended.
    The challenges I have enumerated are greater than any one 
Commissioner. But the Commissioner will set the tone of the 
workforce and will be charged with working alongside Congress 
to thoroughly and fairly implement and enforce our new tax 
laws.
    An effective IRS Commissioner must also remember that our 
tax system relies, in great part, on voluntary compliance. And 
the system works best when American taxpayers trust the agency 
and are able to easily contact the IRS to receive timely and 
complete answers to their questions.
    In short, if confirmed, Mr. Rettig has his work cut out for 
him, but I am optimistic that he is up to this job and, if 
confirmed, will lead the agency with integrity. I feel quite 
confident about that.
    That said, should the IRS slip up, or fail to live up to 
the high standards Congress has set, this committee will hold 
the IRS accountable, as it always has. At the same time, when 
the IRS acts properly, responds thoughtfully, and works with 
us, the IRS will find no better friend than this committee, 
regardless of Democrat or Republican. After all, we recognize 
just how important it is that our taxes are collected fairly, 
efficiently, and in compliance with what Congress intended when 
we wrote our tax laws.
    I want to thank Mr. Rettig for being here and for his 
willingness to serve. Mr. Rettig has decades of experience 
representing taxpayers before the IRS. He knows the agency 
inside and out, due to his years of work on advisory councils 
and stakeholder groups. And he brings the necessary passion and 
dedication that this role will definitely require.
    I am confident that, if confirmed, Mr. Rettig will be a 
trustworthy, responsive, and earnest partner with Congress and 
this committee as we pursue our shared mission to improve the 
agency.
    I do want to thank our Acting Commissioner Kautter, who has 
done a great job at the IRS. However, that is not what we 
confirmed Mr. Kautter to do. Now, more than ever, we need Mr. 
Kautter back doing his full-time job at the Treasury 
Department.
    Before we begin today, I want to clear something up. There 
have been inaccurate press reports based on leaked committee 
documents that the nominee did not disclose property he owns in 
a Trump International property in Hawaii. Now this is absurd 
and it is false, and we should put this matter to rest right 
now.
    First, he disclosed these properties, which were purchased 
in 2006, on the committee questionnaire. That is a fact. He has 
been honest and forthright with this committee at every stage 
of the vetting process. The dispute here pertains to the 
additional details of noting the name on the side of the 
building.
    Second, any suggestion that there is a conflict of interest 
here is the stuff of conspiracy theories. Maybe one wants to 
argue that Mr. Rettig purchased these properties in 2006, 
during Season 5 of ``The Apprentice,'' on the off chance that 
Mr. Trump would become President and nominate him to be IRS 
Commissioner.
    I notice that you feel the same way that I do, that that is 
silly, and I hope we can put that matter to rest and move on to 
the substance of this morning's confirmation hearing.
    And finally, I do want to note that we have noticed an 
executive business meeting for this time as well. If, at any 
point during the hearing, a suitable quorum is present, I 
intend to pause the hearing and move immediately to votes on 
the nominations of Mr. Jeffrey Kessler, Ms. Lynn Johnson, Ms. 
Elizabeth Ann Copeland, and Mr. Patrick Urda. Thereafter, we 
will resume our hearing.
    With that, I am pleased to turn to my partner, Senator 
Wyden, for his opening remarks.
    [The prepared statement of Chairman Hatch appears in the 
appendix.]

             OPENING STATEMENT OF HON. RON WYDEN, 
                   A U.S. SENATOR FROM OREGON

    Senator Wyden. Thank you very much, Mr. Chairman.
    Mr. Chairman and colleagues, the next IRS Commissioner is 
going to be in charge of administering a tax system that is 
broken in two.
    There is one set of rules in America for the cop on the 
beat, or the worker on the factory line. Strict rules, no 
special loopholes--taxes come straight out of your paycheck.
    Then there is another set of rules in America for the high-
flyers. Under that system, with the right advice from costly 
advisers, you can effectively pay what you want, when you want.
    Mr. Rettig, nominated by the President to lead the IRS, 
seems to have made a career on giving advice to a lot of those 
high-flyers. And the biggest policy challenge he is going to 
walk into, if confirmed as Commissioner, is implementing the 
extremely complicated Trump tax law, which does a whole lot 
more for the high-flyers and the well-connected than it does 
for everybody else.
    Given that fact, in my view, it is up to Mr. Rettig to 
demonstrate that if he is confirmed, he is going to work on 
behalf of all Americans, particularly hard-working, middle-
class families and the owners of the garages, the corner 
stores, and the restaurants that make up our communities. ``The 
guy on the street,'' as Mr. Rettig talked about in our meeting 
earlier this week.
    Now on another matter, if you have studied the Nixon 
presidency, you know there is a dark history of the White House 
abusing the IRS for political purposes. It is going to be 
particularly important for Mr. Rettig to demonstrate his 
independence, given that Mr. Rettig did not fully disclose to 
the Finance Committee staff the condos he owns and rents out in 
a Trump-branded and -managed property.
    On a matter the chairman, my good friend, touched on about 
leaks on this kind of discussion, I would only say that last 
night there was a memo to all Finance Committee members coming 
from the chairman and myself making it clear that we wanted all 
members to understand what was at issue with these condos--and 
they are being rented out in Trump-branded and -managed 
property.
    Now, having said that, disclosing that information may not 
have been required by law. My view is it would have been a 
smart exercise of judgment. Certainly if you want to eliminate 
any questions about appearances, you can sell the properties 
off.
    But setting aside even that financial relationship, 
committing to independence is critically important. This 
administration often seems to make tax decisions for political 
reasons rather than policy reasons, and that is a recipe for 
the kind of swampy corruption that makes people lose faith in 
institutions like the IRS.
    For example, it appears a policy regarding tax-favored 
``Opportunity Zones'' was changed at the behest of one well-
connected Republican donor in Nevada. It is a sign the 
administration has put itself in the business of picking 
economic favorites as a result of the tax law. This was a donor 
who wanted an accommodation, and he got it. When the State of 
Vermont sought a similar change, it was denied.
    There are also reports the Trump administration is going to 
introduce a new, untested tax form that will make the 
experience of filing returns even more of a headache for many 
Americans, particularly senior citizens.
    When the debate closed and the new tax law passed, it 
turned out most Americans would not be able to file on a 
postcard, contrary to what Republican sponsors had promised. 
The administration decided to go ahead and cram the same amount 
of tax math onto a smaller form anyway. That means many 
taxpayers are going to have to rifle through complicated new 
sets of instructions, attach multiple schedules, and, in my 
view, it certainly is likely to generate more errors. The new 
forms are going to--for many taxpayers--be a set-up to failure.
    One last point, Mr. Chairman. Recently, the Vice President 
said that the Johnson Amendment, which bars 501(c)(3) tax-
exempt organizations from campaigning for or against political 
candidates--and I am quoting the Vice President of the United 
States here--``will no longer be enforced under this 
administration.''
    Now, I recognize this is a priority of the far right. But 
people ought to understand it is a recipe for even more dark 
money going into our political system.
    And I feel very strongly that the next IRS Commissioner has 
got to be in charge of enforcing the laws on the books despite 
the Vice President's pledge which, in effect, says that will 
not be the case.
    So running the IRS is a difficult job that involves 
managing tens of thousands of employees. Mr. Rettig has decades 
of experience. It will also be a concern, as he and I talked 
about, that he does not have extensive management experience. 
He is going to be asked about that, as he knows, today.
    I appreciate Mr. Rettig's willingness to serve. I thank him 
for joining the committee.
    Mr. Chairman, as always, I look forward to working with 
you.
    The Chairman. Well, thank you, Senator. I appreciate 
working with you very much.
    [The prepared statement of Senator Wyden appears in the 
appendix.]
    The Chairman. I would like to extend a warm welcome to Mr. 
Charles Rettig and thank him again for joining us this morning.
    Soon we will hear from Mr. Rettig, who is currently working 
at the firm Hochman, Salkin, Rettig, Toscher, and Perez, P.C., 
where he has represented clients before the Internal Revenue 
Service, the Tax Division of the Department of Justice, and 
numerous State and Federal taxing authorities.
    Mr. Rettig has served on the Advisory Board of the 
California Franchise Tax Board, the Advisory Council of the 
California State Board of Equalization, and the Internal 
Revenue Service Advisory Council. Mr. Rettig is currently the 
vice chair for administration of the Section of Taxation of the 
American Bar Association, and previously served as the chair 
for the Section of Taxation of the California Bar.
    Throughout his career, Mr. Rettig has specialized in 
Federal and State civil tax and criminal tax controversy 
matters, and tax litigation including tax-related examinations 
and investigations for individuals, business enterprises, 
partnerships, limited liability companies, and corporations.
    Mr. Rettig received his bachelor's degree in economics from 
the University of California at Los Angeles and his J.D. from 
Pepperdine University. He then went on to earn an LL.M. in 
taxation from New York University.
    So I--and I am sure everybody here looks forward to hearing 
from Mr. Rettig and how he plans to integrate his past 
experiences with his new role at the agency, if confirmed.
    Without further ado, Mr. Rettig, please begin with your 
opening remarks.

 STATEMENT OF CHARLES P. RETTIG, NOMINATED TO BE COMMISSIONER, 
            INTERNAL REVENUE SERVICE, WASHINGTON, DC

    Mr. Rettig. Chairman Hatch and Ranking Member Wyden, it is 
an honor to appear before the Senate Finance Committee as the 
President's nominee to serve as the next Commissioner of the 
Internal Revenue Service.
    Before I proceed, I would like to recognize my family who 
are here with me today: my wife Tam, my sister-in-law Dr. Jan, 
my sister-in-law Twi with her husband Michael, my stepsons 
Dayton and Trenton, my daughter Dr. Christina, and my son Dr. 
Charlie. I cannot explain the degree and extent that their love 
and support for me today and throughout my professional and 
personal career mean to me. Personally, I would not be here--in 
my mind--without the ongoing support of my family.
    I need to also recognize three of my law partners who are 
here today, two of whom flew out from Los Angeles last evening, 
arrived this morning, and are headed back this afternoon. 
Steve, Dennis, and Ed are here; my mentor in the practice of 
law, Avram; a very, very close family friend Garner; and 
another very, very close family friend Meko.
    It is the support of my friendships that has allowed me to 
be here today and to do the things that I have accomplished in 
my life.
    My son Charlie, who is sitting behind me, currently serves 
as a Captain in the United States Army and returned Monday 
evening from 12-month deployment overseas. When I was 
nominated, Charlie proudly pointed out, ``Dad, I'm so proud 
you'll be following me into government service.''
    Nothing would make me more proud than to follow my son into 
government service. I did not previously have the opportunity, 
and I look forward to, if confirmed, having that opportunity 
going forward.
    I also learned something from my son. This tax season I was 
pressing him while he was serving overseas to get the 
information to the accountant in order to prepare his returns. 
And the response I got was, ``Dad, I have 180 days from when I 
return from the combat zone in the Sinai Peninsula to submit my 
income tax returns.'' It is nice to get your tax advice from 
your Army Captain son.
    I would also like to acknowledge my father, who had a one-
truck air conditioning business and taught my brother and I the 
value of hard work, getting up early, working late, and not 
complaining.
    I was the first in my family to finish college, and through 
undergraduate school, law school, and graduate school my family 
often joked that I would never stop studying--and they were 
right.
    For more than 35 years, I have worked with all levels of 
the IRS to achieve resolutions on behalf of taxpayers and bring 
them back into compliance with our system of voluntary self-
assessment. I have served as Chair of the IRS Advisory Council 
and in a similar role in my home State of California. I am 
currently vice-chair, administration for the 12,000-member 
Taxation Section of the American Bar Association. I also serve 
as president of the American College of Tax Counsel.
    Through decades of experience working across the table from 
the IRS, I have seen the difficulties faced by taxpayers of all 
kinds--from large taxpayers to small businesses to low-income 
taxpayers who need help.
    When the IRS started ``Problem Solving Days'' years ago to 
allow taxpayers to come in without an appointment, I organized 
dozens of tax professionals in Los Angeles to assist 
unrepresented taxpayers who appeared at the IRS seeking a 
resolution of a tax issue. I have also devoted a significant 
amount of time assisting taxpayers who cannot afford 
professional help on a pro bono basis.
    Throughout my career, I have also been privileged to work 
with many professional and hardworking IRS employees and, if 
confirmed, would be honored to work beside them and earn their 
respect. Despite the challenges it faces, the IRS is fortunate 
to have an experienced workforce committed to its mission.
    In my career, I have seen the impact of those challenges 
firsthand. Long waits on the phone and inadequate IT systems 
are significant issues of frustration for both the Internal 
Revenue Service workforce as well as taxpayers. If confirmed, I 
would hope to work with this committee to take on these and 
other challenges that impact on taxpayers across the board. We 
cannot fall into a trap of viewing the challenges the IRS faces 
as facts of life, but we must work together to solve them.
    If I am privileged to serve as Commissioner, my overriding 
goal will be to strengthen and rebuild the trust between the 
IRS, the American people, and their representatives in 
Congress. That trust is critical to all that the IRS does, 
particularly as it works with the Department of Treasury to 
implement once-in-a-generation tax reform legislation enacted 
by Congress last year. The successful implementation of that 
landmark reform bill will be among my highest priorities.
    In closing, I wish to acknowledge IRS Revenue Procedure 
1964-22 by Commissioner Mortimer Caplin who, at age 101, 
remains a legend in our field. It is the duty of the Service to 
carry out that policy by correctly applying laws enacted by 
Congress to determine the reasonable meaning of various code 
provisions in light of congressional purpose in enacting them, 
and to perform this work in a fair and impartial manner with 
neither a government nor a taxpayer point of view.
    I am grateful for the opportunity to testify and look 
forward to your questions.
    The Chairman. Well, thank you so much. We are grateful that 
you are willing to take on this assignment. It is not an easy 
one, and it is one with plenty of controversy.
    [The prepared statement of Mr. Rettig appears in the 
appendix.]
    The Chairman. I do have some obligatory questions I am 
going to have to ask.
    First, is there anything that you are aware of in your 
background that might present a conflict of interest with the 
duties of the office to which you have been nominated?
    Mr. Rettig. No.
    The Chairman. Do you know of any reason, personal or 
otherwise, that would in any way prevent you from fully and 
honorably discharging the responsibilities of the office to 
which you have been nominated?
    Mr. Rettig. No.
    The Chairman. Do you agree without reservation to respond 
to any reasonable summons to appear and testify before any duly 
constituted committee of the Congress if you are confirmed?
    Mr. Rettig. Yes.
    The Chairman. Finally, do you commit to provide a prompt 
response in writing to any questions addressed to you by any 
Senator of this committee?
    Mr. Rettig. Yes.
    The Chairman. That is great.
    Mr. Rettig, the IRS stands at a crossroads, both in terms 
of challenges and responsibilities. In terms of challenges, if 
confirmed you will run an agency that has enormous 
responsibility. It touches every single American and every 
business.
    Nearly every function of the government depends on the 
revenue the IRS collects. At the same time, it has an aging 
information technology infrastructure, and an aging workforce. 
Real and serious changes are needed, and this committee is 
working to help with that.
    Now, the IRS has a lead role in implementing and a primary 
role in administering the largest tax overhaul in a generation, 
which delivers tax relief and simplification for taxpayers 
across the country.
    Now, Mr. Rettig, this is a challenge not a lot of people 
would willingly accept. So why are you dumb enough to accept 
it? [Laughter.]
    And why do you want this role, and are you up to this 
particular challenge? And I know you are not dumb, so please 
forgive me with my out-of-control sense of humor.
    Mr. Rettig. Mr. Chairman, I have a deep respect for the 
Internal Revenue Service, for this country, for this flag, for 
the people who work for the Internal Revenue Service, and 
respect the fact that the Internal Revenue Service is a 
critical component of the success of this country. And I am 
committed to giving my best efforts to make the Internal 
Revenue Service the best agency that it can be.
    The Chairman. Well, I think that is why you have been 
nominated. From what I see, you are very capable of doing that.
    Under President Obama, this committee led Congress's main 
bipartisan investigation into the question of political bias at 
the IRS and issued the only bipartisan report on the matter.
    Congress has long been concerned with questions of 
political bias at the IRS, which have been a serious issue 
across the agency's history, most notably in the Kennedy, 
Nixon, and Obama administrations.
    If confirmed, do you pledge to lead the IRS without regard 
to partisan political bias or inappropriate influence?
    Mr. Rettig. Absolutely.
    The Chairman. The Internal Revenue Service has never been a 
particularly popular agency--as you know--and its reputation 
has certainly been challenged in recent years. How do you 
intend to restore America's faith and trust in the IRS? Do you 
consider it important to build a better relationship between 
the IRS and the taxpayers?
    Mr. Rettig. I think that the relationship and the viewpoint 
of the American taxpayers as to the Internal Revenue Service is 
critical to the success not only of the Internal Revenue 
Service, but also of this country. I think a large portion of 
the reason that I am significantly interested in becoming 
Commissioner is to rebuild the trust in that agency to confirm 
to the American taxpayers that the Internal Revenue Service is 
impartial, nonbiased, and color-blind for all purposes.
    The Chairman. Great.
    The use at the IRS of ancient computer equipment is 
something that we have commonly noted. Despite everyone being 
aware of the necessity of updating equipment at the IRS, 
substantial progress here remains elusive. What are your plans 
to update the technology needs at the IRS, and how are you 
going to accomplish that?
    Mr. Rettig. The modernization of the IRS IT system and 
bringing the IRS IT system into the 21st century is one of my 
top goals. I think that it serves two purposes. It serves not 
only the protection of taxpayer data, which I believe that 
universally we all agree is a principal concern, but also 
modernizing the IT system serves to enhance services that the 
taxpayers in this country deserve.
    The Chairman. Okay.
    How will you use your longtime experience as a tax 
attorney, especially one who has been on the other side of the 
courtroom from the IRS, to help better perform your duties as 
IRS Commissioner?
    Mr. Rettig. I have been on the consumer side of the IRS and 
a stakeholder in working with the IRS at virtually every level, 
from field level agents and revenue officers up through to the 
corner offices of the Internal Revenue Service. So I think I 
have a pretty good understanding of the operations of the IRS 
and the various roles that different levels of the IRS play in 
trying to efficiently move tax administration in this country 
with an eye toward the benefits of taxpayers.
    The Chairman. Okay.
    I think my time is basically up. So we will turn to the 
ranking member.
    Senator Wyden. Thank you very much, Mr. Chairman.
    Mr. Rettig, let me start with this comment made by the Vice 
President. Vice President Pence said in May that the Johnson 
Amendment--which prohibits the 501(c)(3) tax-exempt 
organizations like churches from campaigning for or against 
political candidates--will ``no longer be enforced under this 
administration.''
    I would like to give you the opportunity, as we begin this 
hearing, to respond to the Vice President of the United States. 
Who is going to be in charge--if you are confirmed as 
Commissioner, who is going to be in charge of the IRS? Will it 
be the Vice President of the United States, or will it be you?
    Mr. Rettig. If I am confirmed, I will be in charge of the 
Internal Revenue Service and will make sure that the Internal 
Revenue Service moves forward and follows the law in an 
impartial, nonbiased manner.
    Senator Wyden. Do you find the Vice President's statement 
troubling? Is that not sending a message, an inherently 
political message, when what we want--whether it is Democrats 
or Republicans--is the law enforced? Is that not a troubling 
message?
    Mr. Rettig. As a nominee, I can really only speak to my 
viewpoint of what would happen if I was to operate the Internal 
Revenue Service as Commissioner, if confirmed. And I confirm to 
you, and I pledge to this committee, impartial, nonbiased 
operation from the Internal Revenue Service from top to bottom.
    Senator Wyden. I understood your answer, but I think every 
American, Democrats, Republicans, whatever your political 
philosophy, ought to be very troubled that the Vice President 
thinks he can make a statement like that. That this 
administration is, in effect, above the law; that the law is 
not what matters. What matters is political muscle.
    Let me move on to the question of the President's tax 
returns and particularly this matter of being under audit. The 
President has stated for over 10 years now that he cannot 
release his individual tax returns because he has been under 
these continuous audits.
    In your 35 years of representing certainly many high-income 
taxpayers with complicated business arrangements, have you ever 
represented anybody who was under continuous audit for 10 years 
or more?
    Mr. Rettig. We have had taxpayers, both individuals and 
entities, that have had multiple-year audits.
    Senator Wyden. The question is 10 years.
    Mr. Rettig. That is where I was going, Senator. I 
personally cannot recall a 10-year examination. But I am not 
particularly--I have no information about the audit with 
respect to the President.
    Senator Wyden. So how would one even get in a place of 
having 10 years' worth of audits? I find it incredulous that 
somebody could be under a continuous audit unless they had made 
enormous mistakes on their tax returns over and over again. My 
assumption is professionals in the field--like yourself--would 
never let that happen.
    So I find it very hard to buy the President's excuse that 
he has been making all of these months for not releasing his 
returns. But how would one even get in a position like this?
    Mr. Rettig. From my experience, I would say that the more 
complex the return, the longer it takes to get an examination 
completed. But again, I have no familiarity with the 
President's returns themselves.
    Senator Wyden. I am going to leave the record open on that 
point. I would like to have you amplify on that, because I just 
find this an incredulous excuse. And you have told me 
essentially that this does not happen very often. It happens 
sometimes.
    Mr. Rettig. In my practice.
    Senator Wyden. Yes. Right. It happens sometimes. My view 
is, you only get there by making enormous mistakes, and 
professionals would not make that possible.
    Now, I am going to read you something that goes to this 
question of fairness for working-class people. Tell me if it 
sounds familiar.
    ``Wealthy taxpayers often engage teams of sophisticated 
tax, business, and estate planning lawyers, accountants, and 
other professionals to oversee their business activities and to 
legitimately minimize their potential tax liabilities.'' Does 
that sound familiar?
    Mr. Rettig. It does.
    Senator Wyden. Now, you identified earlier this week the 
pass-through deduction as one area where guidance is badly 
needed from the IRS. And that is a provision that is so 
confusing that tax consultants are already feasting on planning 
opportunities for their wealthiest clients.
    Given the right opportunities for tax planning and tax 
evasion, frankly, created under the new Republican tax law, how 
are you going to combat the kinds of aggressive tax planners 
you were trying to describe your feelings about in that quote I 
gave you?
    Mr. Rettig. That quote relates to the fact that taxpayers 
have teams, wealthy taxpayers have teams of representatives 
handling their returns. Typically, a taxpayer who desires to 
cheat is not going to go to a group of tax professionals to put 
some structure together to do something. That is not universal, 
but that is a typical----
    Senator Wyden. I am over my time, so I just need you to 
tell me briefly how you would combat those who are trying to 
wring every possible advantage out of this, in effect, to find 
holes in the law.
    Mr. Rettig. For me it would be critical for the IRS to 
provide clear, timely, succinct guidance as to what the 
positions are, and what the intent of Congress was with respect 
to each of the provisions in the tax----
    Senator Wyden. On the next round, we will talk about what 
that clear guidance ought to be.
    Thank you, Mr. Chairman.
    The Chairman. Senator Portman?
    Senator Portman. Thank you, Mr. Chairman. I appreciate you 
having the hearing today.
    Mr. Rettig, you and I have had a chance to visit on a 
number of issues including, as the chairman has indicated, our 
appreciation that you are willing to step up and serve. I also 
want to, if I could, mention Army Captain Charlie Rettig again, 
who just came back, you said, from a 12-month deployment in a 
combat zone. I am going to embarrass him and ask him to stand 
up if he would, just for a second, because I would like to give 
him a round of applause. [Applause.]
    He is right. You are following him in service. Although it 
is not combat, it is going to be a tough job.
    The Chairman. I think it is combat.
    Senator Portman. Yes. [Laughter.]
    So you and I talked a lot about IRS reform. One reason I am 
excited about having a Commissioner in place is, I think it is 
an opportunity for this committee, working with you and the 
Ways and Means Committee, to make some changes at the IRS 
again.
    We did this 20 years ago with a big restructuring and 
reform act. It came after a commission was formed, actually, by 
this body. I co-chaired that with Senator Bob Kerrey, as you 
know.
    And then along with Senator Ben Cardin, who is coming in a 
moment, we introduced legislation that Senator Hatch took a 
leadership role on, as did Senator Wyden in his role then on 
the committee. And what we did was, we said, okay, the IRS is 
not working. It is not functioning to help taxpayers.
    At that time, only half of the calls were being answered 
when a taxpayer would call the IRS. And they spent about $3 
billion on an IT system that was not working, was not talking 
to other systems. It was a big waste.
    So we undertook this series of reforms. Fifty-two different 
new taxpayer rights were added and so on--IRS Oversight Board. 
So, half of the calls were being returned back at that period.
    We passed legislation. Within 10 years, instead of half the 
calls being returned, 83 percent of the calls were being 
answered. So that was a big improvement.
    All the ratings you looked at, you know, which agency or 
department do you feel has done a good job for the taxpayer--
the IRS was at the bottom when we started the reforms. By the 
time the 10 years were up and the reforms were getting in 
place, it was about half way up the ladder, which is not bad 
for the tax collection agency.
    I will say, here we are 10 years later, and unfortunately 
we are kind of back to a situation where taxpayers are not 
being served. By 2015, just 3 years ago, only 37 percent of 
calls were being answered. Today I understand it is back closer 
to 50 percent, but still way unacceptable.
    First of all, do you agree with me on that?
    Mr. Rettig. I agree that America's taxpayers should have 
their telephones answered if they call the Internal Revenue 
Service. I think that is critical not only for whatever the 
reason is they are calling, I think it is critical for them to 
have the respect of the agency they are interacting with and 
get efficient and timely responses.
    Senator Portman. That is not the only measurement. Another 
measurement would be how many taxpayers can come in and 
actually get an answer from a person, and that has also 
declined.
    Another issue I know that Senator Cardin and I are looking 
at is the appeals process. We believe it has been more 
truncated since 20 years ago with the reforms in place. We need 
to get back to a system where people feel they have an absolute 
right to appeal.
    There are other issues as well, but one that you and I 
talked a lot about in our meeting was the IRS Oversight Board. 
This is something that Senator Kerrey felt very strongly about, 
as did I and others.
    We put in place this IRS Oversight Board that would bring 
expertise, service-sector expertise, management expertise. And 
frankly, I think it started off pretty well, and then, because 
of lack of support by every administration, frankly, along the 
way, it kind of fell to the wayside.
    And the idea was not to have to have a commission every 20 
years, and not to have a process that we need to undergo again. 
This next couple of years, hopefully with a new Commissioner in 
place, hopefully with you, we can have this commission perform 
that role of oversight and ensure that we sit on track--there 
are literally no members of the commission right now. Not a 
single member has been appointed.
    And again, this goes back administrations. The Obama 
administration was no more supportive, really, than the Clinton 
administration was, than the Bush administration, than the 
current administration.
    So what do you think about the IRS Oversight Board? Was it 
a good idea or a bad idea? Do you think it should be 
resurrected? And do you think it has a role to play?
    Mr. Rettig. I am in favor of oversight by the IRS Oversight 
Board, by this committee, by others. I think that it assists in 
the transparency of the operations of the Internal Revenue 
Service as well as providing assistance.
    As Commissioner, I would look forward to getting ideas from 
everybody. The more ideas, the better, and then we will work on 
the ideas collectively.
    Senator Portman. Well, I appreciate that answer. And I do 
think that, if you are confirmed, that this committee is going 
to be very interested in working with you on IRS reform. I hope 
that will be part of the discussion.
    Last question, just briefly, on the idea of having an 
independent appeals process: do you support taxpayers having 
access to an independent appeals process?
    Mr. Rettig. Absolutely.
    Senator Portman. Thank you, Mr. Chairman.
    The Chairman. Senator Menendez?
    Senator Menendez. Thank you, Mr. Chairman.
    Congratulations, Mr. Rettig, on your nomination.
    As you know, New Jersey joined 32 other States and DC by 
recently passing a law that authorizes towns and cities to 
create charitable funds that will provide tax credits to 
encourage donations. But in an advisory notice released in May, 
it seems to me that the IRS has arbitrarily singled out new 
programs like New Jersey's and warned that taxpayers could face 
penalties if they write off their donations.
    This fundamentally flawed advisory contradicts decades of 
precedent and case law all the way up to the Supreme Court and 
discriminates against States, apparently, based on political 
affiliation.
    So my question to you is, if you are confirmed as the IRS 
Commissioner, would you adhere to the principles of federalism 
and States rights and respect the authority of States to set 
their own tax policy?
    Mr. Rettig. If I am confirmed as Commissioner of the 
Internal Revenue Service, we will follow the law impartially in 
a nonbiased manner. And, as I believe I have indicated 
previously, nobody should presuppose my position on any 
particular issue across the board. The Internal Revenue Service 
will appropriately look into the facts, look at the relevant 
policies, procedures, prior guidance that has been issued, and 
I believe come to the accurate conclusion in issuing whatever 
guidance the Internal Revenue Service is to issue.
    Senator Menendez. While I appreciate that, if 32 other 
States and the District of Columbia already have the same exact 
principle and it is in effect, and it has been upheld by the 
IRS, would you see any reason to discriminate against another 
State if in fact they are doing the very same essence of what 
those 32 other States are doing?
    Mr. Rettig. It is not an issue that in my practice I have 
dealt with. But in the press that I have read with respect to 
the issue, it is my understanding that there is a possibility 
that the post-tax act situation could be not on all fours with 
the earlier position taken by the Internal Revenue Service in 
the 2010 Chief Counsel Notice.
    Senator Menendez. Well, as you know, I raised this with you 
when you came to visit me, and I do appreciate you visited me. 
And you told me you did not know much then, and I said to you 
that I--I gave you a very early warning that I would be asking 
you these questions at this hearing.
    So this is a serious issue that can raise property tax 
burdens and sow confusion for hundreds of thousands of New 
Jerseyans, and then they are going to deserve a clear answer.
    So again, would you undermine New Jersey's law and deny 
people deductions for these charitable contributions if they 
are in line with 32 other States and the District of Columbia 
that are doing this right now and that the IRS has upheld?
    Mr. Rettig. Senator, I think as we both know, the IRS and 
Treasury are both working on guidance. My incentive with regard 
to the guidance would be that it be accurate, impartial, 
nonbiased and clear, and issued timely.
    And it should not be lost on the committee that--although 
your comments relate to New Jersey, I happen to be from the 
State of California, which is working on a similar situation. 
And I would still look at it in a nonbiased, impartial manner.
    Senator Menendez. Well, let me give you some background. In 
2011, the IRS Chief Counsel released an advisory memo 
clarifying that State credits do not--I repeat, do not--
prohibit taxpayers from writing off the full value of their 
charitable donations. In other words, getting a tax break does 
not mean you earned more money, and thus, you should not be 
taxed more as a result.
    The Supreme Court confirmed this interpretation, ruling 
that State tax credits given for charitable donations are not 
considered a thing of value and rather are ``the government 
declining to impose a tax.''
    I think we can all agree it is illogical, impractical, and 
fundamentally backwards to tax people on the value of a tax 
break they receive. In some States, tax lawyers and accountants 
have bragged about how they are using their program to 
circumvent the property tax cap. For example, in Alabama 
financial advisors explain that so-called ``donations'' are 
``treated as if you paid Alabama taxes. For Federal purposes 
your donation will be reported as a charitable contribution. 
Otherwise, the State tax payment would be reported as a soft 
deduction subject to the $10,000 cap and provide no tax benefit 
to you.''
    And these efforts to maximize deductions were common even 
before the Trump tax bill gutted the property tax deduction. 
Indeed, high-priced tax lawyers and accountants in Georgia have 
been for years urging their clients to shift their itemized 
deductions from State taxes to charitable donations in order to 
avoid the alternative minimum tax.
    So are Alabama and Georgia's programs in compliance with 
the law and IRS rules?
    Mr. Rettig. I think you are aware I am not specifically 
aware of the Alabama and Georgia programs themselves. And I 
think that when we met you raised an issue that perhaps the 
current situation, the difference between credits and 
deductions--and I am not sure that that is a difference----
    Senator Menendez. Mr. Chairman, you are tapping before my 
time is even up.
    The Chairman. Your time is up.
    Senator Menendez. Well, it is up now, but not when you were 
tapping. Can I hear the balance of the answer at least?
    The Chairman. Well, I was trying to give you some warning. 
You could have----
    Senator Wyden. Mr. Chairman, I think both of us went about 
a minute or so over. Could Senator Menendez just have that too?
    The Chairman. Sure. I am not going to stop----
    Senator Menendez. I appreciate it, Mr. Chairman.
    The Chairman. Do not accuse me of interfering with your--I 
tapped to let you know you are near the end so that we do not 
have carryovers that prolong this committee unnecessarily.
    Go ahead.
    Mr. Rettig. Senator, I am aware of your concern with 
respect to this issue, and the concern of others with respect 
to this issue, and the concern of taxpayers across the country 
with respect to these issues, and I would look forward to a 
resolution that universally people could say is the right 
resolution.
    Senator Menendez. Well, I will just close on this. The one 
thing I do not want to see is the IRS weaponized against States 
like mine. It is either good for everybody, the 32 States that 
have been doing it and the District of Columbia, or it is good 
for nobody. So I hope that you will seriously look at this in 
that manner, because otherwise we will feel that we are being 
treated unjustly simply because we are the State that we are.
    Thank you, Mr. Chairman.
    The Chairman. Senator Carper?
    Senator Carper. I think Senator Cardin was actually here 
ahead of me. Let him go ahead. Senator Cardin was here before 
me. Please.
    Senator Cardin. You can go before me.
    Senator Carper. All right. All right.
    Senator Cardin. You are so courteous. Thank you.
    Senator Carper. I will never make that mistake again. 
[Laughter.]
    I just want to say welcome today. And, Tam, to you and your 
family--I am a Vietnam veteran, and it is a special pleasure to 
have you here, and we welcome you to our country. I hope we 
will welcome more often others from other countries to our 
country. It is that spirit we could use around here these days.
    Thanks for coming by yesterday. We talked a good bit about 
adequate funding for the IRS.
    We just passed a tax bill last year that is going to 
increase the budget deficit by a couple of trillion dollars 
over the next 10 years. Our deficit is already at enormous 
levels, and it is going to climb higher. It is a matter of 
great concern to me, and I know it is to you and my colleagues.
    One of the ways we can actually reduce the deficit and 
increase revenues without raising any rates at all would be to 
actually fund the IRS. And what you actually see is reductions 
in funding--I think over the last several years by almost 20 
percent, number of employees down by double digits.
    Your thoughts about this, please, and what would you do to 
try to turn that around?
    Mr. Rettig. Well, first I believe it is the responsibility 
of the IRS to expend any funds it receives in a very 
responsible, forthright, efficient manner. I think that that is 
critical to obtaining the trust of the American people.
    If I am confirmed and in the position as Commissioner, one 
of my top priorities would be to analyze the budget of the 
Internal Revenue Service, workforce-related issues, training-
related issues, all of which encompass the probability of the 
need for additional resources, funding resources, the 
possibility of additional workforce. I am a huge believer in 
training the workforce there so that they are the best on the 
planet. And I think that we need to universally get onboard 
with the training of the Internal Revenue Service so they can 
provide top quality service to America's taxpayers.
    That is where I am coming from.
    Senator Carper. Good. Thank you.
    Former Commissioner John Koskinen, who I thought was a 
hero--he was greatly criticized, especially by folks in the 
other body. But I thought for somebody like him to come out of 
retirement at the age of 70 to take on a thankless, tough job 
like this, then he deserves our kudos, not our brickbats.
    But he repeatedly called on Congress to reauthorize his 
streamlined critical pay program, but to no avail. We talked 
about this yesterday.
    Can you inform the committee on your views on streamlined 
critical pay authority, please? In addition, could you tell us 
in the absence of this authority what your plans are for 
ensuring that the IRS is able to attract top-flight tech 
talent, especially given that the ongoing cybersecurity and 
identity theft threats are growing ever more prevalent? Please.
    Mr. Rettig. I am a proponent of critical pay authority for 
the Internal Revenue Service, particularly with respect to the 
IT side of the operation. I think it is publically known that 
the Internal Revenue Service--the system gets attacked between 
two and three million times a day.
    And I think it is critical to the success of this country 
and to the appearance and trust that the American taxpayers 
have in the Internal Revenue Service that we have a system that 
defends taxpayer data better than any other system on the 
planet.
    And in the absence of critical care pay scales, I think it 
is a significant effort on my part and on the part of other 
senior leadership members in the Internal Revenue Service to 
encourage, not only the workforce that is there to remain and 
want to remain there and be proud of remaining there, but to 
encourage people on the outside about the benefits of 
government service--which is actually what I am doing today--to 
be proud to be serving.
    Senator Carper. Thank you.
    One of the things we talked about yesterday was minimum 
standards for paid preparers. John Koskinen said we have a huge 
problem here. Gene Dodaro, Comptroller General for the GAO, has 
said we have a huge problem here. Senator Wyden has introduced 
legislation, with my support and others on the committee, to 
better ensure that people who are actually preparing tax 
returns know what they are doing and can reduce the number of 
errors that flow from that.
    I would like to ask, if I could, your views on this, 
please.
    Mr. Rettig. I believe that people who prepare tax returns 
on behalf of others should be capable, competent, and 
understand the tax laws for the returns that they are 
preparing. And I think that the training that accompanies a 
typical regulation, or involvement, licensing, or whatnot of 
most preparers, is critical.
    Senator Carper. Good.
    One of the things we talked about yesterday was the IT 
programs for the IRS which are--as we have heard earlier here--
just old, tired. We talked about it yesterday as being as much 
as a $400-million upgrade. Is that something that you would be 
inclined to support?
    Mr. Rettig. From the press--I am not on the inside, so I do 
not know the particulars of it. But from the press on the 
outside and from what we see on the outside, I think that the 
American taxpayers deserve the most up-to-date IT system on the 
planet.
    Senator Carper. Thank you.
    Lastly, a question on your management experience. Some 
people are going to say, he looks pretty good on paper. Maybe 
he is a decent guy, wonderful family. I salute your son, Navy 
salutes--is your son a marine?
    Mr. Rettig. Army.
    Senator Carper. Navy salutes Army.
    I just have a quick word on your management experience. 
Could you speak to the question of your management experience? 
It is a big job, a lot of people to manage.
    Mr. Rettig. Yes. Management experience to me is based on 
leadership and the skills of leadership and creating teams. And 
the leader facilitates the ability of the teams to perform to 
their top capabilities and open communication from top to 
bottom.
    I perceive myself as a pretty good people person, 
interaction with others. I am open. I am open to criticism, and 
I am open to providing criticism as well.
    Senator Carper. All right. Thanks so much.
    Senator Isakson [presiding]. Senator Cardin?
    Senator Cardin. Mr. Rettig, first of all, thank you very 
much for your willingness to serve. You have a very 
distinguished career in understanding the tax laws and 
advocating on behalf of others. So I thank you for your 
willingness to get involved in this area, which is not without 
controversy. And I thank your family.
    I want to follow up on some of the comments that were made 
by Senator Portman and Senator Carper on tax administration. 
But I want to start with the budget that Senator Carper asked 
you about.
    We have gone through a series of budget years where the IRS 
has really taken a hit on its budget. The only reason there was 
an increase in this year's budget was to implement a new tax 
law. It did not deal with the underlying capacity within the 
IRS itself.
    And I appreciate the fact that you recognize that you have 
to live within the funds that are appropriated and you want to 
make sure that every dollar is properly expended--and I want 
you to do that. But I also want to know whether you will be an 
advocate on behalf of the men and women--the professional 
people--who are there serving their country and trying to make 
sure our tax laws are administered fairly, that they would have 
the resources they need and the support they need in order to 
be able to carry out their mission.
    Are you going to be that type of an advocate within the 
Trump administration to make sure that you have adequate 
resources to carry out this mission?
    Mr. Rettig. Senator, people who have known me for the past 
50 years, the last thing they would characterize me as is shy. 
The committee, the American taxpayers, should anticipate that I 
will be knocking on every door possible if I make the 
determination that I think we need something to accomplish the 
goals that we have set out.
    Senator Cardin. And you will be prepared to tell us 
directly those needs so that we as an independent branch of 
government can get that information?
    Mr. Rettig. Yes. This committee will hear from me directly.
    Senator Cardin. I want to underscore some of the points on 
legislation that is moving through here. You mentioned several 
times that you want to make sure that the personnel are 
adequately trained to deal with the complexities of our tax 
code, the needs of the taxpayer.
    There is legislation that would establish a division for 
training within the IRS to protect those funds because, as you 
probably are aware, when there are tight budgets, those funds 
are some of the first to be cut.
    Will you work with us so that we can protect the resources 
that go into training to make sure your people are adequately 
trained?
    Mr. Rettig. Absolutely.
    Senator Cardin. Thank you.
    There is also a program, as you know, the VITA program, to 
deal with low-income taxpayers, for assistance in the IRS. Are 
you prepared to work with us in order to strengthen that 
program?
    Mr. Rettig. Absolutely.
    Senator Cardin. Thank you.
    You already answered questions on tax preparers. I think we 
really need to make sure that consumers are protected when it 
comes to those who are out there using consumers as a part of 
business.
    I appreciate that answer on private debt collection. We 
have been debating that for a long time. Every study has shown 
that private debt collection usually ends up costing us more 
money than we raise.
    I think the House has come up with an effort to try to deal 
with the size of the taxpayer as one of the methods. Will you 
work with us so that we can try to resolve this issue as to 
private debt collection?
    Mr. Rettig. I will.
    Senator Cardin. Thank you.
    The last issue I want to talk about--it is a different hat 
I wear. I am the ranking member on the Small Business and 
Entrepreneurship Committee. Senator Risch is the chairman of 
that committee.
    We have received a great deal of interest from the small 
business community as to the administration of the tax laws 
before the change in the tax code. Now since the change, we 
have heard a lot more as to how small businesses will be able 
to deal with the changes that have been made. We have heard a 
lot of concern about the tax preference of business income for 
small businesses.
    Would you, if confirmed, be prepared to come before the 
Small Business Committee at Senator Risch's and my request in 
order to work on ways that we can help small businesses deal 
with the complexities of our tax code that were there before 
the tax reform, but are now made more complicated by the 
passage of this law?
    Mr. Rettig. Absolutely.
    I grew up in a small business. I believe small businesses 
are the backbone of this country.
    Senator Cardin. Thank you.
    Mr. Chairman, I yield back the balance of my time.
    Senator Isakson. Thank you, Senator Cardin. I will call on 
Senator Cassidy and Senator Whitehouse, in that order. Then I 
will end this first round, for those listening in who may be 
coming, and we will have a second round after I ask my 
questions.
    Senator Cassidy?
    Senator Cassidy. Hi; thanks for coming in. I enjoyed our 
meeting in my office.
    In February, I had an exchange with the Acting Commissioner 
on identity theft and protection of taxpayer data. My identity 
was stolen once, and it still has implications in terms of how 
we file and when we receive our dollars back.
    So the trends look good--significant reductions in ID theft 
since 2015. There were 1.4 million fraudulent returns in 2015, 
about 600,000 this year. What thoughts do you have as to how we 
can move that 600,000--which cost us billions of dollars in 
fraudulent returns--down towards zero?
    Mr. Rettig. I am proud of the fact that the Internal 
Revenue Service has made a dent in identity theft, and I share 
your concern that 600,000 would still be too much, that any 
identity theft is still too much.
    There are issues with respect to the timing of certain 
functions in the Internal Revenue Service that, if the IRS was 
allowed more time, they could prevent more ID theft in 
situations like that. So if confirmed, I would look forward to 
working with you in that regard.
    Senator Cassidy. I would point out that I am told that my 
stolen return did not note that I had three children, and 
formerly I had had three. And so you could have checked the 
obits to see if something had happened.
    But it does seem as if integration with the Social Security 
fund or something could have revealed that sort of simple 
thing.
    Mr. Rettig. There is tremendous pressure on the Internal 
Revenue Service to issue refunds, and I believe that that is 
part of the issue to be dealt with. And I share the concern 
that any identity theft related to the Internal Revenue Service 
is----
    Senator Cassidy. Congress is considering some IRS 
administrative reforms that would improve this. Let me give you 
some ideas and see what you think of them.
    Designating a single point of contact at the IRS where an 
ID theft victim could call, notifying taxpayers when ID theft 
is suspected, and updates on criminal prosecution. I would like 
to know that this is not just, oh my gosh, it is just 
happening, and we do not care. And then expansion of the ID 
Protection PIN program.
    Any thoughts on those?
    Mr. Rettig. The single point of contact, I think, is 
critical, because it is confusing for people who have suffered 
ID theft. There are multiple gates, multiple doors to get into. 
So I think a single point of contact would be significant.
    The criminal investigation issues, I think that it is a 
significant part of the criminal investigation function within 
the Internal Revenue Service as deterrents. So making people 
who might consider going down that road in terms of ID theft, 
making them aware of the fact that they could be looking at a 
significant prison sentence, I think is critical.
    Senator Cassidy. But it is also because of, somebody I know 
stole my ID, then frankly, that is going to get out in my 
community.
    Mr. Rettig. Correct.
    Senator Cassidy. And so the kind of--and presumably, 
somebody I know stole my ID. It could have been somebody who 
logged on and got my info, but to the degree that--but anyway, 
just to kind of reverberate, what about the ID Protection PIN 
program?
    Mr. Rettig. The PIN program, I think, is critical, and 
there is even contemplation of maybe an issuance of different 
Social Security numbers and other things associated with that 
even beyond the PIN. Most of us do not want to have--we can 
remember a Social Security number. We may not remember a PIN 
code as we go into the future.
    And even getting into government buildings, when you are 
asked for the last four of your social, sometimes most of us 
have to start at the beginning to get to the last four. So I 
think the possibility of issuing new Social Security numbers to 
people who have incurred that might also generate some respect 
by the victim for the fact that the government stands with 
them.
    Senator Cassidy. The Treasury--let me talk about the return 
review program. Again, to improve fraud detection, it has been 
implemented in recent years. It appears to be a significant 
improvement over the old system.
    The Treasury IG for Tax Administration report from 
September 2017 noted the IRS may not meet its December 2018 
target for retiring the legacy system. Again, I have had an 
unflagged fraudulent return. How could you prioritize full 
implementation of the new system?
    Mr. Rettig. Being on the outside, I am not personally 
familiar with the system. But it would be a high priority for 
me, if confirmed, to look into it and to work with you and the 
rest of the committee.
    Senator Cassidy. Okay.
    The IRS has undertaken an information sharing pilot program 
to reduce fraud and ID theft. I understand 24 States 
participated in 2017. It seems reasonable to expand that.
    Again, your views on that? You probably are familiar with 
this.
    Mr. Rettig. I am an advocate of information sharing with 
other similar State agencies. I think that that is critical to 
moving forward.
    Senator Cassidy. No parochialism there, if you will.
    Lastly, I will say that I am pleased to see the IRS has 
improved customer service, but still I think one in five people 
calling never gets their phone call answered. What can we do to 
improve that?
    Mr. Rettig. I believe it is critical for the respect of the 
agency and to earn the trust of the American taxpayer that, 
when they call the IRS, somebody answers the phone.
    Senator Cassidy. It seems pretty basic, huh?
    Any ideas on how to improve, or more manpower, woman power, 
or----
    Mr. Rettig. I am aware of other States that have the 
ability to--when you call in, you actually get a recording, and 
it says the hold time is 17 minutes, if you would leave your 
number, we will call you back in 3 minutes. Private industry as 
well tends to do that routinely.
    If that is possible on the scale of the Internal Revenue 
Service, that type of a system would be significant--not only 
in terms of getting the person off the phone so they are not on 
hold, but the respect for the agency to make them the 21st-
century agency that operates the same as the private sector.
    That is what the taxpayers are used to. They are used to 
calling a private-sector entity and getting a 3-minute hold, 
leave your number, and they will call you back. And I would 
like to see the IRS--working with the committee, I would like 
to see the IRS get to that level.
    Senator Cassidy. That would be great. Thank you very much.
    Senator Isakson. Thank you, Senator Cassidy.
    Senator Whitehouse?
    Senator Whitehouse. Thank you, Mr. Chairman.
    Mr. Rettig, thank you. Good to see you. Thank you for the 
visit to my office.
    The IRS has a history from bygone days of having been used 
as a political weapon. We have a President who apparently is 
regularly demanding loyalty of folks who are appointed.
    We witnessed the administration leaning on both independent 
regulators and on agencies of government like DOJ that are 
supposed to be independent to try to impose their will. That 
combination of factors raises the questions, (a) have you made 
any loyalty pledge, or (b) been asked to make any loyalty 
pledge?
    Mr. Rettig. No, I have not.
    Senator Whitehouse. No, you have not?
    Mr. Rettig. Excuse me. No on both counts.
    Senator Whitehouse. No on both counts.
    And along the spectrum of yielding to political pressure 
when it is brought to bear on you, versus being staunchly 
independent as Commissioner, where do you expect you would fall 
along that spectrum?
    Mr. Rettig. I would hope that the members of this committee 
and the American taxpayers see me as staunchly independent or 
more so.
    Senator Whitehouse. One of the problems we talked about in 
my office is the problem of shell corporations. They are used 
for tax avoidance and evasion. They are also used for a 
considerable degree of criminal activity.
    Much of that is a matter of State law, but there are 
signals that the IRS Commissioner could send, for instance, 
telling investigators looking into tax fraud that when they 
bump up against a shell corporation, they ought to really 
redouble their efforts and not just walk away because they 
cannot figure that out. And also to be a voice with respect to 
the shell corporation problem as Congress deliberates that 
problem.
    Let me know what your thoughts are on dealing with shell 
corporations in those two ways.
    Mr. Rettig. If confirmed, I will be a vocal advocate for 
the strength of the enforcement mechanisms in the Internal 
Revenue Service, including the Criminal Investigation Division 
of the Internal Revenue Service. In my background, criminal 
investigation does not back down from a challenge; they 
appreciate the challenge, and they move forward.
    Senator Whitehouse. And would you be willing to make a 
report to us once you have been in for a while and gotten a 
look at this as to how bad the shell corporations problem is 
from your perspective in terms of law enforcement?
    Mr. Rettig. Absolutely.
    Senator Whitehouse. Okay. Great. Thank you.
    There is a collections gap between what taxpayers owe and 
what the IRS collects. It is estimated to be about $400 
billion.
    Would it be fair for us to evaluate your tenure as IRS 
Commissioner based on what you can do to reduce that number?
    Mr. Rettig. Senator, what I can tell you is, I am very 
familiar with the tax gap. I am aware the majority of the tax 
gap comes from the individual side: under reporting, non-
filing, and underpayment.
    I actually look at the tax gap as somewhat of a roadmap to 
tax avoidance, tax evasion in this country. It has been 
identified going back to 2001. I believe it was the first tax 
gap map that was created, dealing with tax year 2001.
    I am very sensitive to that issue. And I am sensitive to 
the need to reduce that issue for a variety of reasons, 
including a little bit more respect. If we got 1 more percent 
of voluntarily compliance, we would move it from say 83 percent 
to 84 percent. That is another $30 billion a year.
    On the other side, if the Internal Revenue Service loses 
respect of the taxpayer and it reduces 1 percent, that is a $30 
billion a year loss.
    I am extremely hopeful to put a significant dent in the tax 
gap.
    Senator Whitehouse. And my last question is that a lot of 
the work that the IRS does is based on truthful reporting by 
taxpayers. If it should come to your attention that a taxpayer 
is claiming one thing under oath in a filing to the IRS, and is 
claiming something that on its face appears very different to 
other regulators or in other reporting environments, what do 
you think should be done about that? Is that worth at least a 
preliminary look to see why the taxpayer is reporting something 
very different to the IRS than they are elsewhere?
    Mr. Rettig. The Commissioner is not responsible for audit 
selection of taxpayers or issues. That is really more the 
workforce.
    But I think that the IRS itself has those mechanisms in 
place. And they do read the newspapers. They do pay attention 
to what is going on outside of the service.
    Senator Whitehouse. Should it be something the IRS looks 
into if there appears to be inconsistent reporting to determine 
whether the reporting to the IRS is truthful or not?
    Mr. Rettig. In my experience, the IRS has looked into that.
    Senator Whitehouse. And should it continue to do so?
    Mr. Rettig. I believe that it should.
    Senator Whitehouse. Okay.
    Mr. Rettig. It has been my experience that they do.
    Senator Whitehouse. My time is up.
    I thank the chairman.
    Senator Isakson. Thank you, Senator Whitehouse.
    Mr. Rettig, would you tell me about the UCLA Extension Vets 
Count Scholarship Fund? Do you know anything about that?
    Mr. Rettig. I would proudly tell you about the Vets Count.
    Senator Isakson. We will all proudly listen. Tell us about 
it.
    Mr. Rettig. I created the Vets Count Scholarship Fund 
through UCLA for the purpose of--UCLA Extension is the number 
two extension program in the world in terms of actual 
registrations.
    Vets Count Scholarship Fund is intended to provide 
scholarships to active duty and veterans. It came from the 
situation of--you see reality TV, where you see soldiers in a 
sandbagged installation in Iraq or wherever they happen to be, 
and maybe playing video games or whatnot, and the intent of 
Vets Count is to remotely, through webcasts or otherwise, allow 
soldiers serving overseas in something like a sand bunker to 
actually earn extension credits in areas of finance, 
accounting, and such so that when they leave--if you have been 
a machine gunner on a Humvee for 3 years, and you have a GI 
bill, the ability to go to a college or a university in this 
country and sit in a geography class might be a challenge 
coming out of the environment that you have been in.
    The idea of Vets Count is to provide active duty soldiers 
and veterans with the ability to assimilate into society with 
some financial literacy, some accounting--and maybe in time 
they would go to college--but immediately, to give them some 
respect when they come back into the job market.
    Senator Isakson. As I understand, you are the cofounder of 
that program. Is that correct?
    Mr. Rettig. I am the founder of the program.
    Senator Isakson. The reason I bring it up is, I am the 
chairman of the Veterans' Committee in the United States 
Senate. And it is always great for me to point out a United 
States citizen who is lending their expertise and their career 
to help support in some way veterans' employment, veterans' 
education.
    And having co-written the eArmyU Act a few years ago when 
Senator Kerry and I started distance learning in the United 
States military for earning college credit, I understand how 
valuable what you are doing there is. And you are taking video 
games out of a soldier's hands in many cases and putting a 
calculus book in their hands, which is great for all of us.
    I wanted to commend you publicly on your commitment to our 
military. And your son behind you, he will be a good student 
following your leadership, sir.
    Mr. Rettig. Thank you.
    Senator Isakson. Second, are you familiar with Free File?
    Mr. Rettig. I am.
    Senator Isakson. I have in the last 7 years had a Free File 
event every April in Atlanta at an underemployment and 
unemployment center promoting the available software that is 
made available by American software developers to file and pay 
and get your income taxes or get your EITC, one way or another.
    I have tried to pursue making that permanent. It has only 
been authorized every 2 years for a couple of years.
    Would you give me some idea if you would support permanency 
of the Free File program?
    Mr. Rettig. If confirmed, I would look into it in more 
detail. But I am a huge supporter of whatever makes it more 
easy for U.S. taxpayers to get into compliance.
    Senator Isakson. Thank you for that answer.
    And lastly for my questions, before I turn back to the 
ranking member for his second questions, my personal feeling--
and this is me personally as a taxpayer--I have paid taxes 
since April 15, 1959, when I made $40 a week as a surveyor's 
assistant and had $8.90 withheld from my $40 weekly check, 
which is my first experience paying taxes.
    Some say that is when they became a Republican. I did not 
become a Republican then. I became one later. But nonetheless, 
that is not relevant one way or another.
    What is relevant about it is, I have paid them for a long 
time, and I have had professional help to pay them a lot of 
that time, because I personally--it went beyond my ability to 
do it and feel like I was doing it right or accurately.
    But I believe the most recent tax change, along with some 
that took place earlier in tax law, have actually simplified 
the process of filing and paying income taxes. Am I wrong or 
right on that?
    Mr. Rettig. Senator, I know from the outside and from the 
press reports that I believe we are on that course. I believe 
in terms of being able to come up with a calculus as to an 
actual right or wrong, we need to see how this filing season 
goes with the 6868.
    Senator Isakson. I agree with that. And I am talking to you 
as a taxpayer here, not really as a Senator, because it just 
seems like, with the enhanced individual deduction, the 
doubling of the deduction, with some of the reductions in 
itemization that took place and some of the new laws we have 
done over the last couple of years, it has made the dream one 
day of having the one-page 1040 where you sign and send it in 
maybe within reach of us.
    I hope as Commissioner of the IRS you will work towards 
completing that task to moving towards simplification of the 
system, because you just said in answering Senator Whitehouse's 
question with regard to the amount of income we have lost by 
people not paying, that most of the income we are not getting 
is due to the tax gap, people who are not filing and are not 
paying.
    Mr. Rettig. Right.
    Senator Isakson. So it is an overt act on their part that 
we are not getting the money, not a mistake. And I would think 
simplicity would help us to reduce that amount of people who 
are not paying and increase the amount of people who are 
filing.
    If you would help us do that, I think it would help you a 
lot in raising that percentage of collection from 83 to 84.
    Mr. Rettig. I agree.
    Senator Isakson. Okay. Thank you.
    Senator Wyden?
    Senator Wyden. Thank you, Mr. Chairman.
    My friend, Senator Isakson, makes the commendable point 
about simplicity. And I hope you will take it seriously. I will 
just tell you, if confirmed, you have some heavy lifting to do 
because, after all the ballyhoo about how the administration 
was going to get taxes on a postcard, apparently for a lot of 
people you would have to complete six schedules in order to be 
part of such a drill. So you are going to have some heavy 
lifting to do.
    I will just tell you point-blank, I hope what you will do 
is focus on the small business guidance, on the pass-through 
provision which looks like it is literally from fantasy land in 
terms of trying to figure out what is expected of these small 
businesses in April. A lot of them told me they could not even 
begin to make an estimate of their taxes.
    I hope you will do that first, rather than continue on 
other matters that might make for good publicity but do not 
really deal with the guts of what our economy needs. And 
particularly in my State and much of the country, most 
businesses are pass-throughs, and they are literally crying out 
for some clarity on what is going to be done.
    Now for my next question, I would like to turn to the 
charity area, because we have had strong bipartisan support in 
this committee for charity. Senator Thune and I have prosecuted 
that case for a long time.
    Secretary Mnuchin said that the bill is going to encourage 
more charitable donations. The nonpartisan experts at the Tax 
Policy Center say, in their view, that the number of taxpayers 
claiming the charitable deduction will be cut by more than a 
half, and overall charitable giving will decline by as much as 
$20 billion annually. You have probably seen in the press that 
a lot of the charities are already speaking out publically 
about their concerns, their concerns about the vagueness of the 
provisions, drafting errors. They do not even in many instances 
know how to comply with the new rules.
    Do you have any reason to doubt the findings of these 
nonpartisan experts who talk about the decline of charitable 
giving as I have described?
    Mr. Rettig. I have not reviewed those reports personally. 
So it would really be unfair of me to comment on what they are 
saying. But I believe in the concept of charitable giving and 
would support that.
    Senator Wyden. On the management front, what is the largest 
number of employees that you have managed?
    Mr. Rettig. Actual employees in our office, 35.
    Senator Wyden. Thirty-five. Okay.
    So there are 70,000 people who are going to be working at 
the IRS. I thought your point with respect to Senator Carper 
that you have shown leadership and you have served on all of 
these boards--I would like you to furnish for the record, 
because time is short and my colleague and I, we have some 
business to do. I would like to hear more specifics about what 
kind of management approach you would actually take, because 
there is a big difference between managing 35 and managing 
70,000. I would just like to have that for the record.
    One last question with respect to these charitable groups 
and political activity. I thought your answer to my question 
about the Vice President was a good one, because I thought that 
statement he made was way over the line. I mean, not even 
close, because that is really trying to interfere with the 
impartial administration of tax law.
    But I continue to be concerned about these issues, given 
the allegations that the Trump campaign operation coordinated 
or even diverted how Trump Foundation grants were distributed 
to provide maximum benefit to the Trump campaign.
    In the meeting that you and I had, you emphasized the 
importance of the IRS using its resources to send a message to 
the public. You talked about some examples of that. What kind 
of a message would it send for the IRS not to pursue evidence 
of the law being violated by a high government official?
    Now I am not talking to you about a specific case, but I 
would just like to hear your thoughts about the kind of message 
it would send for the IRS not to pursue evidence of a law 
violation by a high official.
    Mr. Rettig. In my experience, the IRS looks into a lot of 
matters, develops the facts of those matters, and sometimes we 
hear about them publically and sometimes we do not. So the 
public acknowledgement of what the IRS might be doing does not 
really surface until something gets through the system. But 
also in my experience, the IRS does read the newspapers, and 
they do create cases out of what they read in the newspapers.
    Senator Wyden. The IRS certainly will get a newspaper. But 
given what has happened recently, literally a month ago, with 
the Vice President of the United States basically saying that 
his views were more important than the Johnson Amendment, which 
prohibits politics from the pulpit, I think we ought to 
understand we are in a different kind of time.
    So I look forward to continuing these discussions. I have 
asked for a number of matters for the record.
    Chairman Hatch and Senator Isakson have agreed we have some 
other business to do after Senator Brown has a chance to ask 
questions.
    I appreciate the second round, Mr. Chairman.
    Senator Isakson. Yes, sir.
    Senator Brown?
    Senator Brown. Thank you, Senator Isakson.
    Senator Wyden, I appreciate that.
    Welcome, Mr. Rettig. It was good talking with you. Thank 
you for joining us.
    I would like to start with the issue of private debt 
collection. I echo the comments of Senator Cardin that it costs 
more than it raises, and there is obviously evidence for that. 
I fought against this program at every turn. It is unfair. It 
is too often confusing for taxpayers, as I know you are aware.
    The Taxpayer Advocate has said that it is unfairly 
targeting low-income individuals. That too, I think all of us 
agree, is unacceptable.
    If confirmed, would you commit to a full review of the 
private debt collector program, including a review of its 
collection methods?
    Mr. Rettig. I would. The Internal Revenue Service's 
responsibility is to follow the law. And as we all know, 
private debt collectors are part of the law.
    The issue I think that surfaced is implementation of the 
private debt collector law and is it being implemented in an 
impartial manner. And I would absolutely look into that.
    Senator Brown. And that means you are suggesting you would 
work to ensure that extremely vulnerable taxpayers are not 
being targeted?
    Mr. Rettig. Agreed.
    Senator Brown. Okay.
    The IRS is planning, as we have talked about, to shut down 
a branch in Covington, KY, just on the other side of the Ohio 
River from Cincinnati, affecting 800 of my constituents. Would 
you commit to finding similar employment for workers at a 
nearby IRS office?
    Mr. Rettig. I do not believe it is fair for me to commit, 
not having been in the Internal Revenue Service, with respect 
to that and the reasoning behind terminating employees. But I 
share your concern with 800 individuals not being employed if 
they shut down the office, and I commit to you I would look 
into that and work with your office.
    Senator Brown. Considering the amount of talk about the 
agency's need for resources and staff--which I certainly 
support, and I hope my colleagues on the other side of the 
aisle will too--I think it is unreasonable to eliminate these 
positions rather than work to reassign those workers. So I will 
work with you on that, and I appreciate that.
    Lastly, I know you have discussed your experience with the 
VITA program with me and my staff. My understanding is you have 
done that from the time you were in school and since.
    For tax compliance, especially with respect to the Earned 
Income Tax Credit, which is one of the most important parts of 
our tax law--it rewards work for moderate- and low-income 
workers. And every March or April, literally hundreds of 
thousands of Ohioans who make $20,000 or $30,000 or $40,000 a 
year, because of this refundable tax credit, all things you 
know, will get a check of $2,000 or $3,000, and that income is 
very, very significant, obviously.
    VITA sites have a 93-percent accuracy rate. They are really 
the gold standard.
    Describe for us, because I think it is so important to have 
an IRS Commissioner who has actually practiced this, who cares 
about VITA--tell us about your experience working with VITA. 
And reassure all of us on this committee that you will work to 
make sure that VITA sites have the resources they need to meet 
demand for their services.
    Mr. Rettig. I am a huge proponent of VITA. It serves two 
purposes. It is obviously--on the taxpayer service side, it is 
providing essentially free services to the taxpayer.
    The other side of that is, a significant number of tax 
professionals in this country started out understanding what 
tax administration was about in a VITA program--you know, 
preparing returns and interacting on behalf of taxpayers in 
that context, rather than taking tax or accounting courses in a 
college-type environment.
    So for many professionals whom I know, their spark on the 
interest of being involved in tax administration began in a 
VITA program. And as you indicated, Senator, the accuracy 
relayed from VITA programs, the training of the people involved 
in the programs, is significant and point-on for the purpose of 
preparing accurate returns, and it is critical to the success, 
if you will, of the tax administration in this country that 
returns get prepared as accurately as possible.
    Senator Brown. Thank you.
    I so appreciate the work you have done with VITA, and so 
appreciate your comments. I hope we can count on you when there 
are members of this committee and there are politicians in this 
town who love to talk in a deceitful way, frankly, by playing 
with numbers, about fraud and the Earned Income Tax Credit, 
always exaggerated frauds. That is echoed sometimes by 
newspapers like The Wall Street Journal so often, because what 
they call fraud is really either underpayment or overpayment 
that the taxpayer had nothing to do with. They were simple 
mistakes.
    Again, often it is underpayment of funds, not overpayment. 
So it is far from fraud, but I am hoping we can count on you as 
the IRS Commissioner to defend that and speak out and set the 
record straight when those accusations are made.
    Mr. Rettig. Absolutely.
    Senator Brown. Thank you.
    Senator Isakson. Senator Toomey?
    Senator Toomey. Thank you, Mr. Chairman.
    Mr. Rettig, thank you very much for being here, for your 
willingness to serve in what is sometimes a thankless position. 
I enjoyed our chat some weeks ago.
    A couple of points here: one, the tax reform measure that 
we passed almost exactly 6 months ago is contributing, I think, 
enormously to a very, very good economic environment. We are 
seeing some very encouraging data, record low unemployment, the 
unprecedented fact that there are more job openings than there 
are people looking for jobs in America today.
    The CBO revised its GDP growth for the year. Their estimate 
changed from 2 percent before the tax reform to now where they 
are expecting 3.3 percent. Our goal to eliminate the lock-out 
effect on foreign earnings by changing to a more territorial 
basis--that is clearly working, as dividends from abroad are 
coming home on a scale of hundreds of billions of dollars.
    So this is proving to be extremely beneficial. But as you 
know, there are still provisions that need rules for 
implementation. And I simply would want to ask that you would 
commit to working with this committee and members of Congress 
to ensure that as any ambiguities are addressed and rules are 
developed that you are taking into account the intent of those 
of us who wrote this legislation so that we get it right for 
our constituents.
    Mr. Rettig. Absolutely.
    If confirmed, the Internal Revenue Service will follow the 
law and what Congress intended in putting it into law. And I 
look forward to the opportunity to assist the Internal Revenue 
Service in providing clear, concise, timely guidance so the 
taxpayers of this country can get it right the first time.
    Senator Toomey. Great. Great. Thank you.
    We also spoke briefly about the Foreign Account Tax 
Compliance Act, often known by the acronym FATCA. And this is 
the requirement that foreign financial institutions that hold 
assets for American citizens have to report about these 
accounts to the U.S. Government or withhold 30 percent as a tax 
on these.
    The fact is, many foreign financial institutions find this 
so cumbersome they simply refuse to provide banking systems to 
American citizens abroad. This is a huge problem for Americans 
abroad. A record number of Americans have renounced their U.S. 
citizenship because they just cannot manage their finances if 
they choose to live abroad for some time.
    It also makes it a huge competitive disadvantage for 
Americans who are seeking to work--and sometimes a stint 
overseas can be a very valuable experience for one's career. I 
do not think we should be putting Americans, and for that 
matter American multi-nationals, at a competitive disadvantage 
this way.
    So can I get a commitment from you that you will work with 
us here in Congress to find ways to lessen this burden that 
FATCA is imposing on Americans?
    Mr. Rettig. If confirmed, I would commit not only with 
respect to FATCA, but with respect to every issue that we can 
come up with to lessen the burden on American taxpayers going 
forward.
    Senator Toomey. And then finally, it struck me as 
surprising when I learned that the IRS has so few appointed 
positions and so many career positions. There are lots of 
terrific career staff. There is no question about that.
    But my understanding is there is a Commissioner, a Chief 
Counsel, and a Chief of Staff who are the Commissioner's direct 
discretionary hires, but other than that--well, the 
Commissioner gets appointed, of course. But otherwise, 
everybody is career staff.
    And I just wonder if it would not be better for the 
Commissioner to be able to assemble his or her own management 
team to a greater extent. Do you have an opinion on that?
    Mr. Rettig. I believe that the workforce and leadership 
currently in place--career IRS workers are absolutely world-
class. But I also believe that having a private-sector 
experience and bringing that inside is critical so that there 
is a deep understanding of the impact of each step that the 
Internal Revenue Service takes on American taxpayers and 
interactions with this committee and others.
    Senator Toomey. Great. Thank you very much.
    Thanks, Mr. Chairman.
    Senator Isakson. Thank you, Senator Toomey.
    It was the committee's intention to report four nominees 
during today's hearing. But as we have yet to get a quorum, we 
will have to move the consideration of these four to the floor 
later today.
    I understand the ranking member would like to make a brief 
statement about the four nominees. And I recognize Senator 
Wyden.
    Senator Wyden. Thank you very much, Mr. Chairman. I agree 
with the decision to vote on these nominees off the floor 
later.
    We are going to be voting on four nominations, as Chairman 
Isakson has noted. Ms. Elizabeth Copeland, and Mr. Patrick Urda 
are up for positions on the Tax Court, obviously key positions 
with respect to fairness for taxpayers.
    Mr. Chairman, I note that our friend Senator Scott has 
come. I believe he probably wants to ask questions of Mr. 
Rettig.
    Why don't I hold off making my comments about the nominees? 
Then we could let Senator Scott go before we go to another 
matter.
    Senator Isakson. Senator Scott, you are recognized.
    Senator Scott. Well, thank you both very much.
    Mr. Rettig, the Department of Treasury and the IRS formally 
certified nominations from the States, the District of 
Columbia, and all possessions of the United States to designate 
opportunity zones in their areas of jurisdiction. This is 
really good news.
    Securing this provision in the tax bill was a huge 
legislative win for millions of Americans living and struggling 
in communities in need of a renaissance. Please thank Acting 
Commissioner Kautter and his team for their hard work in 
pushing out the guidance that helped local leaders select their 
opportunity zones.
    This provision will help to create permanent and positive 
change that will benefit generations to come. I look forward to 
further guidance for the investors and entrepreneurs on 
establishing the investment vehicles and identifying qualified 
investments most likely to drive jobs and economic activities 
back into those areas.
    Innovative tax incentive programs, such as my opportunity 
zones provision, have been created by Congress to achieve 
important public policy goals that risk being severely 
underutilized because of taxpayer fear of IRS retribution.
    If confirmed, what will you do going forward to more 
closely align IRS guidance and enforcement with congressional 
intent?
    Mr. Rettig. Senator, if confirmed, I look forward to 
working with you and other members of the committee in making 
sure that guidance issued by the Internal Revenue Service is 
clear, concise, and timely.
    And I would hope that we could get to a situation where 
American taxpayers do not fear retribution from the Internal 
Revenue Service but respect the Internal Revenue Service, and 
that it is clear that they know that the Internal Revenue 
Service respects the American taxpayer.
    Senator Scott. Thank you very much. That is really good to 
hear, because I will tell you that, as you think about the 
opportunity zones legislation, we are talking about legislation 
that could provide private-sector capital to more than 52 
million Americans living throughout this Nation still in 
distressed communities. So the positive impact of attracting 
maybe $2 trillion of capital gains back into some of the most 
distressed communities in the country would be just impressive 
and necessary.
    Having grown up in one of those distressed communities 
myself, I understand and appreciate the potential that is 
locked, trapped in the soil in those communities. And we have a 
way of excavating that human potential. I think it is 
incredibly important. Thank you very much for that.
    One final question, Mr. Chairman.
    The IRS currently wields a tremendous amount of power over 
the folks in South Carolina and across the country, far more 
than the founders intended. One example is found in civil asset 
forfeiture. This practice allows the IRS to confiscate a 
citizen's wealth upon the mere suspicion of wrongdoing.
    During a 2-year investigation, the Ways and Means Oversight 
Subcommittee discovered the IRS had seized civil assets from 
small business owners without providing substantial evidence to 
support their claim. That is why I introduced the RESPECT Act, 
which would require the IRS to show probable cause before 
seizing assets and facilitate taxpayer presentation of proof 
that would clear them of wrongdoing.
    Will you commit to working with me to protect taxpayers and 
small businesses?
    Mr. Rettig. Absolutely.
    Senator Scott. Thank you very much, sir.
    This is basically an issue of liberty, and there is a 
bipartisan consensus that civil asset forfeiture is an abuse 
that needs to be stopped.
    Thank you for your response. Thank you for your indulgence.
    I yield the rest of my time.
    Senator Isakson. Thank you, Senator Scott.
    And I might add, since I am only acting chairman, I am 
going to abuse that privilege, if I can for one second, to 
commend Senator Scott on the asset forfeiture issue being 
brought forth. I am a cosponsor of that legislation.
    There is a Georgia taxpayer who I think is the face of that 
movement around the country to end the abuse of the civil asset 
forfeiture treatment. And I hope the IRS will do everything 
they can to cooperate with us and get into a positive 
resolution of that.
    Thank you for bringing that up.
    Senator Scott. Thank you, Mr. Chairman.
    Senator Isakson. Senator Wyden, you are recognized for the 
remainder of your statement.
    Senator Wyden. Thank you, Mr. Chairman.
    I am sure it is hard for folks to assess where we are. 
Unless any other members come in, Mr. Rettig, we will look 
forward to getting your written responses and continuing our 
discussions.
    Chairman Isakson and Chairman Hatch and I have all agreed 
we will vote on the nominations that are before us off the 
floor of the Senate when we have a vote. So there are several 
nominees. Ms. Elizabeth Copeland and Mr. Patrick Urda are up 
for positions on the U.S. Tax Court. Obviously those positions 
deal with fairness for taxpayers that we have been talking 
about today.
    Jeffrey Kessler is nominated to be an Assistant Secretary 
at the Commerce Department, and, if confirmed, he would play a 
key role in another area of bipartisan concern: tougher 
enforcement of trade laws. I plan on supporting each of those 
three nominees.
    The fourth who is up for consideration is Ms. Lynn Johnson, 
nominated to serve as Assistant Secretary for Family Support at 
HHS. In that position, Ms. Johnson would be the head of the 
Administration for Children and Families.
    There are several specific issues regarding that nomination 
that I will just touch on briefly. The first deals with the 
child welfare system.
    Our committee has passed a number of landmark bipartisan 
child welfare laws. It is our job to perform vigorous oversight 
of those laws, and the Congress needs access to the information 
that shows how child welfare programs around the country 
actually work on the front lines.
    Unfortunately, last year the Trump administration announced 
a plan that would make it significantly harder to get the 
information this committee and the public needs to conduct 
oversight of these programs effectively. So, this is not a 
criticism of that particular nominee, Ms. Johnson, but it 
certainly was a mistake by the Trump administration, a big 
mistake--in my view, a mistake in the wrong direction for kids 
in foster care.
    I have been working with the Department on the issue for 
several months. We have had communication, but I still do not 
think there has been enough actual progress on that front.
    That, then, brings me to the second issue with respect to 
Ms. Johnson. If she is confirmed, she would oversee the Office 
of Refugee Resettlement. This is the agency that has custody 
over the thousands of refugee children the Trump administration 
separated from their mothers and fathers.
    Americans have rightfully been horrified by the stories of 
weeping mothers unsure of where their daughters and sons have 
been taken. And some of the audio tapes--gut-wrenching audio 
tapes--have been heard, with young children crying out in fear 
inside a detention facility. And Americans want answers as to 
how this is going to be fixed.
    Now, Ms. Johnson, when she ran the Jefferson County child 
welfare program in Colorado, the State Senate greenlighted a 
law allowing foster kids to be placed in juvenile detention 
facilities. When the committee met several weeks ago for a 
hearing on her nomination, that was one issue among several 
that committee members had to consider.
    Now, because of the new firestorm that the Trump 
administration has created, the issue of putting children in 
detention facilities is obviously very much on the minds of the 
American people. In my view, the committee has not had an 
opportunity to learn nearly enough about how Ms. Johnson would 
handle this part of her job, if she is confirmed.
    And the fact is, we have been in the dark to a great extent 
on this matter for several weeks now. We had Secretary Azar, 
with respect to the children under his custody, not able to 
give us straight answers even with respect to how many of the 
parents have been told where their children actually are.
    So Ms. Johnson certainly, if confirmed, is going to have a 
key role in addressing this issue of protecting these kids, 
making sure these children are safe, when we have seen 
significant evidence that they really are at considerable risk. 
So she has a big job ahead of her.
    We will have the vote off the floor of the Senate. 
Certainly a number of my colleagues on both sides of the aisle 
are going to support her, but in view of the two issues that I 
have mentioned, I am not able to support her nomination today.
    Thank you, Chairman Isakson. It looks to me like we are 
done.
    Senator Isakson. We are almost done. I have a statement to 
read for the chairman.
    Thank you all for attending today. And in particular, Mr. 
Rettig, thank you for your attendance and your commitment to 
public service. We commend you on your work in the past, in 
particular on veterans' affairs. We appreciate that very much.
    We appreciate all of the good questions that were provided 
today by the members. Any other questions can be submitted for 
the record.
    Please know that should you serve the agency and the 
American people well, Mr. Rettig, you will have no greater 
friend than this committee. However, we also have a 
responsibility to the American people, and the Finance 
Committee will continue to be the place where your actions will 
be overseen and reviewed. We hope you will count on us for 
help. We will be the greatest watchdog you and the agency have.
    I ask that any member who wishes to submit questions for 
the record do so by the close of business on Tuesday, July 3rd.
    With that said, this hearing is adjourned.
    Thank you, Mr. Rettig, for your attendance.
    [Whereupon, at 12:19 p.m., the hearing was concluded.]

                            A P P E N D I X

              Additional Material Submitted for the Record

                              ----------                              


              Prepared Statement of Hon. Orrin G. Hatch, 
                        a U.S. Senator From Utah
WASHINGTON--Senate Finance Committee Chairman Orrin Hatch (R-Utah) 
today delivered the following opening statement at a hearing to 
consider the nomination of Charles Rettig to be the Internal Revenue 
Service (IRS) Commissioner.

    Right now, the IRS is at a critical juncture. The American people 
are already seeing a myriad of benefits thanks to tax reform, as 
unemployment continues to drop and wages rise.

    And the IRS will be responsible for implementing these new policies 
smoothly and efficiently so that the new law's full benefits can be 
more quickly realized.

    After years of turmoil and controversy, I am hopeful that the IRS 
has finally started turning the corner. However, with a large 
governmental organization like the IRS, there is always room for 
improvement.

    Take for example, the problems of aging technology services. Some 
of the IRS's information technology dates back to the Kennedy 
administration. Unsurprisingly, that dated technology could inhibit the 
IRS's ability to interact coherently with 21st-century technology that 
currently powers our country and much of the rest of the world.

    If confirmed, I expect Mr. Rettig to work with Congress to 
modernize the IRS's infrastructure and technology to bring the agency 
into the 21st century.

    Another major issue is that the IRS has an aging workforce. Right 
now, the majority of the IRS's workforce is over the age of fifty and 
nearing retirement. If that majority of the workforce were to retire at 
or around the same time, the IRS will face a shortage of knowledge and 
experience.

    If confirmed, I hope that Mr. Rettig will start working with 
Congress immediately to plan for the agency's future. As the IRS 
continues to implement tax reform, it must work with the Treasury 
Department to issue regulations and other guidance to ensure that 
taxpayers have certainty and predictability concerning this new law.

    It must also work with Congress to ensure that the new law is 
implemented and administrated as Congress intended.

    The challenges I have enumerated are greater than any one 
Commissioner. But the Commissioner will set the tone of the workforce 
and will be charged with working alongside Congress to thoroughly and 
fairly implement and enforce our new tax laws.

    An effective IRS Commissioner must also remember that our tax 
system relies, in great part, on voluntary compliance. And the system 
works best when American taxpayers trust the agency and are able to 
easily contact the IRS to receive timely and complete answers to their 
questions.

    In short, if confirmed, Mr. Rettig has his work cut out for him, 
but I'm optimistic that he is up to the job and, if confirmed, will 
lead the agency with integrity.

    That said, should the IRS slip up, or fail to live up to the high 
standards Congress has set, this committee will hold the IRS 
accountable, as it always has.

    At the same time, when the IRS acts properly, responds 
thoughtfully, and works with us, the IRS will find no better friend 
than this committee. After all, we recognize just how important it is 
that our taxes are collected fairly, efficiently, and in compliance 
with what Congress intended when we wrote the tax laws.

    I thank Mr. Rettig for being here and his willingness to serve. Mr. 
Rettig has decades of experience representing taxpayers before the IRS. 
He knows the agency inside and out, due to his years of work on 
advisory councils and stakeholder groups. And he brings the necessary 
passion and dedication that this role will require.

    I am confident that, if confirmed, Mr. Rettig will be a 
trustworthy, responsive, and earnest partner with Congress and this 
committee as we pursue our shared mission to improve the agency.

    I do want to thank Acting Commissioner Kautter, who has done a 
great job at the IRS. However, that's not what we confirmed Mr. Kautter 
to do. And now, more than ever, we need Mr. Kautter back doing his 
full-time job at the Treasury Department.

    Before we begin today, I want to clear something up. There have 
been inaccurate press reports based on leaked committee documents that 
the nominee didn't disclose property he owns in a Trump International 
property in Hawaii.

    This is absurd and false, and we should put this matter to rest 
right now.

    First, he disclosed these properties, which were purchased in 2006, 
on the committee questionnaire. That is a fact. He has been honest and 
forthright with this committee at every stage of the vetting process. 
The dispute here pertains to the additional details of noting the name 
on the side of the building.

    Second, any suggestion that there is a conflict of interest here is 
the stuff of conspiracy theories. Maybe one wants to argue that Mr. 
Rettig purchased these properties in 2006, during Season 5 of ``The 
Apprentice,'' on the off chance that Mr. Trump would become President 
and nominate him to be IRS Commissioner.

    But this is silly, and I hope we can put that matter to rest and 
move on to the substance of this morning's confirmation hearing.

    And finally, I do want to note that we've noticed an executive 
business meeting for this time as well.

    If, at any point during the hearing, a suitable quorum is present, 
I intend to pause the hearing and move immediately to votes on the 
nominations of Mr. Jeffrey Kessler, Ms. Lynn Johnson, Ms. Elizabeth Ann 
Copeland, and Mr. Patrick Urda.

                                 ______
                                 
Prepared Statement of Charles P. Rettig, Nominated to be Commissioner, 
                        Internal Revenue Service
    Chairman Hatch and Ranking Member Wyden, it is an honor to appear 
before the Senate Finance Committee as the President's nominee to serve 
as Commissioner of the Internal Revenue Service.

    Before I go any further I would like to recognize my family who are 
with me today: my wife Tam, my sister-in-law Jan, my stepsons Dayton 
and Trenton, my daughter Christina, and my son Charlie. I cannot 
explain what their love and support mean to me.

    Charlie serves as a Captain in the U.S. Army and returned just days 
ago from a 12-month deployment overseas. When I was nominated he 
proudly pointed out, ``Dad, you'll be following me into public 
service.'' Nothing would make me prouder. He also taught me something 
about the tax code--that he has 180 days from when he left the Sinai 
Peninsula to file his tax return.

    I would also like to acknowledge my father, who built an air-
conditioning business that taught my brother and me the value of hard 
work. I was the first in my family to finish college, and through 
undergrad, law school, and graduate school they often joked that I 
would never stop studying--and they were right.

    For more than 35 years, I have worked with all levels of the IRS to 
achieve resolutions on behalf of taxpayers and bring them back into 
compliance with our system of voluntary self-assessment. I have served 
as Chair of the IRS Advisory Council and in a similar role in my home 
State of California. I am currently vice-chair, administration for the 
12,000 member Taxation Section of the American Bar Association. I also 
serve as president of the American College of Tax Counsel.

    Through decades of experience working across the table from the 
IRS, I have seen the difficulties faced by taxpayers of all kinds--from 
large employers, to small businesses, to low-income taxpayers who need 
help. When the IRS started ``Problem Solving Days'' to allow taxpayers 
to come in without an appointment, I organized dozens of tax 
professionals in my area to assist unrepresented taxpayers who appeared 
at the IRS seeking a resolution of a tax issue. I've also devoted a 
significant amount of time assisting taxpayers who can't afford 
professional help on a pro bono basis.

    Throughout my career, I have also been privileged to work with many 
professional and hard-working IRS employees and, if confirmed, would be 
honored to work alongside them and earn their respect. Despite the 
challenges it faces, the IRS is fortunate to have an experienced 
workforce committed to its mission.

    In my career, I have seen the impact of those challenges firsthand. 
Long waits on the phone and inadequate IT systems are significant 
sources of frustration. If confirmed, I will work with this committee 
to take on these and other challenges with the impact on taxpayers in 
mind. We cannot fall into the trap of viewing the challenges the IRS 
faces as facts of life but must work together to solve them.

    If I am privileged to serve as Commissioner, my overriding goal 
will be to strengthen and rebuild trust between the IRS, the American 
people, and their representatives in Congress. That trust is critical 
to all that the IRS does--particularly as it works with the Department 
of the Treasury to implement once-in-a-generation tax reform 
legislation enacted by Congress last year. The successful 
implementation of that landmark reform law will be among my highest 
priorities as Commissioner.

    In closing, I wish to acknowledge IRS Revenue Procedure 1964-22 
issued by Commissioner Mortimer Caplin--a veteran of D-Day, who, at age 
101, remains a legend at the IRS and throughout the tax practitioner 
community:

        . . . it is the duty of the Service to carry out that policy by 
        correctly applying the laws enacted by Congress; to determine 
        the reasonable meaning of various code provisions in light of 
        the Congressional purpose in enacting them; and to perform this 
        work in a fair and impartial manner, with neither a government 
        nor a taxpayer point of view. . . .

    I am grateful for the opportunity to testify and look forward to 
your questions.

                                 ______
                                 

                        SENATE FINANCE COMMITTEE

                  STATEMENT OF INFORMATION REQUESTED 
                               OF NOMINEE

                      A. BIOGRAPHICAL INFORMATION

 1.  Name (include any former names used): Charles Paul Rettig, also 
known as Chuck Rettig.

 2.  Position to which nominated: Commissioner of the Internal Revenue 
Service.

 3.  Date of nomination: February 13, 2018.

 4.  Address (list current residence, office, and mailing addresses):

 5.  Date and place of birth: November 18, 1956; Burbank, California.

 6.  Marital status (include maiden name of wife or husband's name):

 7.  Names and ages of children:

 8.  Education (list secondary and higher education institutions, dates 
attended, degree received, and date degree granted):

        Graduate Law School: New York University, School of Law, 09/
        1981 to 05/1982 (LL.M. in Taxation, 1982).

        Law School: Pepperdine University, School of Law, 09/1978 to 
        12/1980 (JD, 1980).

        Undergraduate College: University of California, Los Angeles 
        (UCLA), 09/1974 to 03/1978 (BA, Economics, 1978).

        High School: El Camino Real High School, LAUSD, Woodland Hills, 
        California (1972 to 1974).

 9.  Employment record (list all jobs held since college, including the 
title or description of job, name of employer, location of work, and 
dates of employment):

        Hochman, Salkin, Rettig, Toscher, and Perez, P.C. (and 
        predecessor firm Hochman, Salkin, and DeRoy, P.C.), tax 
        attorney; 9150 Wilshire Boulevard, #300, Beverly Hills, 
        California 90212; July 6, 1982 to present.

10.  Government experience (list any advisory, consultative, honorary, 
or other part-time service or positions with Federal, State, or local 
governments, other than those listed above):

        Internal Revenue Service Advisory Council (IRSAC) Chair; 2010-
        2011; Vice-Chair, 2009-2010; Member (Small Business/Self-
        Employed Division Subgroup), 2008-2010; an unpaid voluntary 
        position.

        California Franchise Tax Board, Advisory Board, 1998-present; 
        an unpaid voluntary position.

        California State Board of Equalization, Advisory Council, 2011-
        2014; an unpaid voluntary position.

11.  Business relationships (list all positions held as an officer, 
director, trustee, partner, proprietor, agent, representative, or 
consultant of any corporation, company, firm, partnership, other 
business enterprise, or educational or other institution):

        President, Hochman, Salkin, Rettig, Toscher, and Perez, PC.

        President/Director, PADI Foundation, a non-profit, public 
        benefit corporation.

        Trustee (unpaid) of several irrevocable trusts for a few 
        private individual clients of our law firm--each such trust is 
        solely for the benefit of family members of such client--I do 
        not have nor have I ever had any beneficial or economic 
        interest in any of such trusts. I have/will resign as Trustee 
        of such trust if privileged to be confirmed for the position 
        for which I am being nominated, and prior to serving in such 
        position.

        Co-Trustee (unpaid) of the Hochman, Salkin, Rettig, Toscher, 
        and Perez, PC retirement plans. I have/will resign as Trustee 
        of such trust if privileged to be confirmed for the position 
        for which I am being nominated, and prior to serving in such 
        position.

        Trustee (unpaid) of 9150 Trust, created for the benefit of 
        Hochman, Salkin, Rettig, Toscher, and Perez, PC. I have/will 
        resign as Trustee of such trust if privileged to be confirmed 
        for the position for which I am being nominated, and prior to 
        serving in such position.

12.  Memberships (list all memberships and offices held in 
professional, fraternal, scholarly, civic, business, charitable, and 
other organizations):

        Internal Revenue Service Advisory Council (IRSAC), Chair (2010-
        2011).

        Vice-Chair (2009-2010); Member--Small Business/Self-Employed 
        Division Subgroup (2008-2010).

        California Franchise Tax Board, Advisory Board, Member, 1998-
        present.

        California State Board of Equalization, Advisory Council, 
        Member, 2011-2014.

        American Bar Association, Taxation Section.

            Vice Chair, Administration, 2014-present.

            Council Director, 2012-2014.

            Civil and Criminal Tax Penalties Committee.

              Chair, 2009-2011.

              Vice-Chair, 2007-2009.

              Chair, Subcommittee on Civil Penalties, 2002-2008.

            Member, Standards of Tax Practice Committee.

              Liaison, IRS National Taxpayer Advocate, 2003-2007 
        (est.).

            Member, Court Procedure and Practice Committee, Member.

            Member, Committee on Appointments to the U.S. Tax Court, 
        2006, 2008, 2011-2013.

        State Bar of California.

            Chair, Taxation Section, 1999-2000.

            Chair-Elect, Taxation Section, 1998-1999.

            Vice-Chair and Member, Taxation Section Executive 
        Committee, 1995-1997.

            Advisor, Taxation Section Executive Committee, 2004-2014.

            Immediate Past-Chair, Taxation Section Executive 
        Committee, 2000-2001.

            Chair, Committee of Past-Chairs, 2001-2002.

            Chair, State and Local Tax Committee, 1998.

            Member, Tax Procedure and Litigation Committee

        American College of Tax Counsel (ACTC), President (2018); Vice-
        President (2016-2018); Treasurer, (2015-2016); Member and 
        Chair, Nominating Committee (2012-2015); Elected Regent (2009-
        present); Elected Fellow (2000-present).

        New York University School of Law, Graduate Tax Program, 
        National Board of Advisors, 1999-2010 (est.).

        New York University School of Law, Weinfeld Associate.

        New York University School of Law, Wallace-Lyon-Eustice 
        Associate.

        New York University Institute on Federal Taxation.

            Institute Co-Chair, 2009 and 2017.

            Chair, Tax Controversies Sessions, 2007-present.

            Member, Advisory Board, 2007-present.

        UCLA Extension Annual Tax Controversy Institute.

            Institute Chair and Planning Committee Member, 1998-
        present.

        USC Institute on Federal Taxation,

            Member, Executive Committee, 2003-present.

            Subcommittee Chair--Ethics, Compliance, and Enforcement, 
        2004--present.

        ABA National Institute on Criminal Tax Fraud and Civil Tax 
        Controversy, Institute Chair, 2011-2013; Institute Co-Chair 
        2014-present; ABA National Institute on Criminal Tax Fraud, 
        Institute Co-Chair, 2010.

        California CPA Education Foundation, Board of Trustees, Member, 
        2007-2011.

        Beverly Hills Bar Association.

            Chair, Taxation Section, 2001-2003.

            Vice-Chair, Taxation Section, 2000-2001.

            Executive Committee Member, Taxation Section, 2003-2014.

            Chair, Tax Procedure Committee, 2000-2001.

            Chair, State and Local Tax Committee, 1997-1999.

        Los Angeles County Bar Association

            Chair, Tax Procedure and Litigation Committee-1997.

        Wolters Kluwer Law and Business (CCH) Legal Tax Advisory Board, 
        Founder and Chair, 2012-2014.

        Society of Trust and Estate Practitioners (STEP), 2009-present.

        California Society of CPAs (CSCPA), Committee on Taxation, Los 
        Angeles Chapter, 1998-present; CSCPA, Associate Member, 1998-
        present.

        Hawaii Society of Certified Public Accountants (HSCPA)--
        Taxation Committee, Member.

        California Society of Enrolled Agents, Professional Affiliate, 
        2006-2010 (est.).

        American Tax Policy Institute, Life Member.

        Co-Founder, UCLA Extension VETS COUNT Scholarship Fund--Vets 
        Count provides scholarships for active and retired military 
        personnel who are working to realize their career goals in tax, 
        accounting, wealth management, and other areas of the financial 
        services industry, https://giving.ucla.edu/vetscount.

        United States Tax Court Judicial Conference, Invited 
        Participant, 1999, 2005, 2007, 2009, 2015, 2018.

        Golden Gate University, Graduate School of Taxation, Advisory 
        Board, Member, 2006-2015 (est.).

        Chapman University School of Law, Graduate Tax Program, 
        Advisory Board, Member, 2004-2008 (est.).

        Association of Tax Counsel, Los Angeles, CA 1997-present.

        U.S. Court of Federal Claims Bar Association.

        Federal Bar Association (Taxation Section).

        State Bar of California (Taxation Section).

        State Bar of Arizona (Taxation Section).

        State Bar of Hawaii (Taxation Committee).

        Los Angeles County Bar Association (Taxation Section).

        Beverly Hills Bar Association (Taxation Section).

        San Fernando Valley Bar (Taxation Section).

        California CPA Education Foundation, Faculty of Lecturers, 
        1997-2009.

        Wounded Warrior Project, Advance Guard, 2011-present.

        UDT-SEAL Association, Associate Member, 2010-2016.

        National Rifle Association (Father's Day gift subscription from 
        active duty military family member).

        PADI Foundation, a California Non-Profit Public Benefit 
        Corporation, Co-Founder, President/Chair, 1991-present.

        Crespi Carmelita High School, Board of Directors, 2006-2010.

        Natural History Museum, Past-Member, Los Angeles, CA.

        Greater Los Angeles Zoo Association, Member, Los Angeles, CA.

        Honolulu Zoo Association, Member, Honolulu, HI.

        Santa Barbara Zoo Association, Past-Member, Santa Barbara, CA.

        The Academy of Magical Arts, Past-Associate Member, Los 
        Angeles, CA.

        Porsche Club of America, Los Angeles Chapter, CA.

        Petersen Automotive Museum, Los Angeles, CA.

13.  Political affiliations and activities:

        a.  List all public offices for which you have been a 
        candidate.

       N/A.

        b.  List all memberships and offices held in and services 
        rendered to all political parties or election committees during 
        the last 10 years.

       N/A.

        c.  Itemize all political contributions to any individual, 
        campaign organization, political party, political action 
        committee, or similar entity of $50 or more for the past 10 
        years.

       I have exercised my best efforts to identify all such political 
contributions including a review of my personal files and searches of 
publicly available electronic data bases. Despite my searches, there 
may be other contributions I have been unable to identify, find, or 
recall. In this regard, to the best of my present knowledge:

       Muliufi (``Mufi'') Hannemann for Congress--2012 ($1,500).

       Brad Sherman for Congress--2012 ($500).

       Mary Mack Bono Committee--2012 ($500).

       Romney for President, Inc.--2012 ($500).

       Obama Victory Fund--2012 ($500).

       Obama for America--2012 ($500).

       Friends of Max Baucus--2013 ($2,600).

       Robert E. Andrews for Congress--2013 ($250).

       Friends of Alan Arakawa--2013 ($1,000 est.).

       Brian Schatz for Senate--2013 ($5,200).

       Brian Schatz for Senate--2014 ($5,200).

       Brian Schatz for Senate--2016 ($200).

       Democratic Party of Hawaii--2014 ($2,100).

       Kamala D. Harris for Senate--2016 ($500).

       National Republican Congressional Committee--2017 ($500).

       Trump Make America Great Again Committee--2017 ($500).

       Donald J. Trump for President, Inc.--2017 ($375).

14.  Honors and awards (list all scholarships, fellowships, honorary 
degrees, honorary society memberships, military medals, and any other 
special recognition for outstanding service or achievement):

        Certified Specialist, Taxation Law, the State Bar of 
        California, Board of Legal Specialization.

        Certified Specialist, Estate Planning, Trust and Probate Law, 
        the State Bar of California, Board of Legal Specialization.

        ``Tax Lawyer of the Year'' (Litigation and Controversy, Los 
        Angeles), Best Lawyers--2016, 2017, and 2018.

        IRS District Director's Award, Los Angeles District, 1998.

        V. Judson Klein Award for Outstanding Achievement in Taxation, 
        Taxation Section; State Bar of California, 2003.

        Award for Extraordinary Efforts Enhancing Government and 
        Private Tax Practitioner Partnerships in the Tax Community for 
        Continuing Education and Professional Development, UCLA 
        Extension, 2005.

        2009 Tax Person of the Year (Top 10), Tax Notes/Tax Analysts.

        Top 50 IRS Representation Practitioners for 2008, CPA Magazine, 
        2008.

        Chambers USA, Eminent Practitioner, ``Tax Fraud--Nationwide.''

        President's Award for Outstanding Contributions to GPA's in 
        Hawaii, Hawaii Society of CPAs, 2003-2004.

        2015 Partner Appreciation Award, Steller Member, ABA Center for 
        Professional Development.

        Conference Speaker of the Year Award, California CPA Education 
        Foundation, 2000.

        Instructor of the Year Award, Graduate Tax Program, Golden Gate 
        University, 2002.

        Commencement Speaker, Graduate Tax Program, Golden Gate 
        University, 2003.

        Keynote Conference Speaker, Hawaii Society of CPAs 42nd Annual 
        Conference, 2002.

        Top 100 Super Lawyers (Los Angeles County), Los Angeles 
        Magazine/Southern California Super Lawyers Magazine, 2005.

        Top Tax Super Lawyers (Los Angeles County), Los Angeles 
        Magazine/Southern California Super Lawyers Magazine, 2004-
        present.

        The Best Lawyers in America, 2004-present.

        Strathmore's Who's Who, Lifetime Member.

        Martindale-Hubbell AV Preeminent Rating (highest possible 
        rating).

        Awarded keys to the cities of Elkhart, Nappanee, and Goshen, 
        Indiana in recognition of facilitation of significant financial 
        gift to the Elkhart County Community Foundation, July 2014.

15.  Published writings (list the titles, publishers, and dates of all 
books, articles, reports, or other published materials you have 
written):

        I have exercised my best efforts to identify all published 
        writings, including a review of my personal files and searches 
        of publicly available electronic data bases. Despite my 
        searches, there may be other materials I have been unable to 
        identify, find, or recall. However, I can represent that I have 
        not published materials that would be embarrassing to me or to 
        the government if they were to be later disclosed publicly. In 
        this regard, please see the attached list 1-163.


                                Articles
------------------------------------------------------------------------
            Title                   Publication               Date
------------------------------------------------------------------------
Message From the Institute    Journal of Tax Practice  Dec.-Jan. 2018
 Chair, Charles P. Rettig      and Procedure
 and Steven Tascher
------------------------------------------------------------------------
Practice--A Lesson in         Journal of Tax Practice  Oct.-Nov. 2017
 Accountability and IRS        and Procedure
 Enforcement
------------------------------------------------------------------------
Striking Hard: Overview of    Journal of Tax Practice  June-July 2017
 the Revised California        and Procedure
 Administrative Income Tax
 Procedure
------------------------------------------------------------------------
What to Expect From Newly     Journal of Tax Practice  Feb.-Mar. 2017
 Announced LB&I Compliance     and Procedure
 Campaigns
------------------------------------------------------------------------
Message From the Institute    Journal of Tax Practice  Dec. 2016-Jan.
 Chair, Charles P. Rettig      and Procedure            2017
------------------------------------------------------------------------
TIGTA Evaluation of the IRS   Journal of Tax Practice  Oct.-Nov. 2016
 Whistleblower Program         and Procedure
------------------------------------------------------------------------
Why the Ongoing Problem With  Journal of Tax Practice  Aug.-Sept. 2016
 FBAR Compliance?              and Procedure
------------------------------------------------------------------------
In a Tax Practice,            Journal of Tax Practice  Jun.-July. 2016
 Everything Is Fine, Until     and Procedure
 It's Not!
------------------------------------------------------------------------
The Panama Papers and         Journal of Tax Practice  Apr.-May 2016
 Lessons Learned From Years    and Procedure
 of Offshore Leaks
------------------------------------------------------------------------
IRS Audit Selection and       Journal of Tax Practice  Feb.-Mar. 2016
 Classiffcation Processes      and Procedure
------------------------------------------------------------------------
Evaluating the IRS Wealth     Journal of Tax Practice  Dec. 2015-Jan.
 Squad                         and Procedure            2016
------------------------------------------------------------------------
Basic Overview: The Kovel     Journal of Tax Practice  Oct.-Nov. 2015
 Accountant and Privileged     and Procedure
 Communications
------------------------------------------------------------------------
Handling the Sensitive Issue  Journal of Tax Practice  Aug.-Sept. 2015
 IRS Audit                     and Procedure
------------------------------------------------------------------------
NEW IRS Guidance Limits FBAR  Journal of Tax Practice  June-July 2015
 Penalties!                    and Procedure
------------------------------------------------------------------------
Determining ``Reasonable      Journal of Tax Practice  Apr.-May 2015
 Cause'' for Nonwillful FBAR   and Procedure
 Violations
------------------------------------------------------------------------
Overview: Trust Fund          Journal of Tax Practice  Feb.-Mar. 2015
 Recovery Penalty              and Procedure
------------------------------------------------------------------------
Overview: IRS Examination     Journal of Tax Practice  Dec. 2014-Jan.
 Process                       and Procedure            2015
------------------------------------------------------------------------
IRS Administrative Appeals    The Practical Tax        Winter, 2014
 Process Procedures            Lawyer
------------------------------------------------------------------------
Common Badges of Tax Fraud    Journal of Tax Practice  Oct. 2014
 Uncovered                     and Procedure
------------------------------------------------------------------------
OVDP and Streamlined          Journal of Tax Practice  Aug.-Sept. 2014
 Procedures: Am I Non-         and Procedure
 Willful?
------------------------------------------------------------------------
Jury Determines 150-Percent   Journal of Tax Practice  June-July 2014
 FBAR Penalty and U.S. Seeks   and Procedure
 FBAR Related Forfeiture of
 $12 Million!
------------------------------------------------------------------------
IRS Changes Streamlined OVDP  Journal of Tax Practice  June-July 2014
 Reducing FBAR Penalty         and Procedure
 Exposure!
------------------------------------------------------------------------
IRS LB&I Revised IDR          Journal of Tax Practice  Apr.-May 2014
 Enforcement Process           and Procedure
------------------------------------------------------------------------
2014 Tax Enforcement          Valley Lawyer            April 2014
 Priorities and Practice
 Tips From the Tax Trenches
------------------------------------------------------------------------
Overview: Indirect Methods    Journal of Tax Practice  Feb.-Mar. 2014
 of Determining Taxable        and Procedure
 Income
------------------------------------------------------------------------
Revised IRS Appeals           Journal of Tax Practice  Dec. 2013-Jan.
 Procedures re: FBAR           and Procedure            2014
 Penalties
------------------------------------------------------------------------
Criminal Tax Restitution      Journal of Tax Practice  Oct.-Nov. 2013
 Orders and the Civil          and Procedure
 Liability
------------------------------------------------------------------------
A Temporary and Transitory    Journal of Tax Practice  Aug.-Sept. 2013
 Visit With California         and Procedure
 Residency
------------------------------------------------------------------------
GAO to IRS: Pursue Quiet      Journal of Tax Practice  June-July 2013
 Disclosures and First Time    and Procedure
 FBAR Filers
------------------------------------------------------------------------
IRS Offshore Voluntary        Journal of Tax Practice  Apr.-May 2013
 Disclosure Progam: Opt-       and Procedure
 Outs, a Revised FBAR and
 Rescissions of Pre-
 Clearance Letters by
 Criminal Investigations
------------------------------------------------------------------------
Whistleblower Awards and the  Journal of Tax Practice  Feb.-Mar. 2013
 Bank Secrecy Act: Mutually    and Procedure
 Exclusive?
------------------------------------------------------------------------
Message From the Institute    Journal of Tax Practice  Dec. 2012-Jan.
 Chair, Charles P. Rettig      and Procedure            2013
------------------------------------------------------------------------
Form 8300: Reporting          Journal of Tax Practice  Dec. 2012-Jan.
 Domestic Currency             and Procedure            2013
 Transactions
------------------------------------------------------------------------
Webinar Featuring Steve       HSRTP                    Jan. 11, 2018
 Tascher--The Perils of
 Cival and Criminal Tax
 Penalties: What You Need to
 Know
------------------------------------------------------------------------
Steve Tascher Receives        HSRTP                    Nov. 3, 2017
 Lifetime Achievement Award
 for Outstanding
 Contributions in the Field
 of Tax Law
------------------------------------------------------------------------
Judge L. Paige Marvel Has     United States Tax Court  Feb. 29, 2016
 Been Elected as Chief Judge   Press Release
 of the United States Tax
 Court
------------------------------------------------------------------------
IRS Streamlined FBAR          HSRTP                    Feb. 4, 2016
 Reporting Procedures Non-
 Resident Certification Form
 14653
------------------------------------------------------------------------
Agostino and Associates       Agostino and Associates  Jan. 21, 2016
 Newsletter--Evaluating
 Collection Alternatives
------------------------------------------------------------------------
National Institutes on        ABA                      Dec. 1, 2015
 Criminal Tax Fraud and Tax
 Controversy, Dec. 9-11
------------------------------------------------------------------------
Withheld Taxes and the Trust  HSRTP                    Nov. 18, 2015
 Fund Recovery Penalty
------------------------------------------------------------------------
Civil Tax Penalty Defenses:   HSRTP                    Oct. 12, 2015
 Reasonable Cause and
 Reliance
------------------------------------------------------------------------
First Time Abatement of       HSRTP                    Sept. 29, 2015
 Civil Tax Penalties
------------------------------------------------------------------------
Sensitive Issue Tax           HSRTP                    Sept. 5, 2015
 Examinations--the
 ``Eggshell Audit''
------------------------------------------------------------------------
New FBAR Reference Guide      HSRTP                    Aug. 7, 2015
------------------------------------------------------------------------
New Filing Due Dates for      HSRTP                    Aug. 1, 2015
 FBARs, Partnership and C
 Corporation Returns!
------------------------------------------------------------------------
Determining ``Reasonable      HSRTP                    July 29, 2015
 Cause'' for Nonwillful FBAR
 Violations
------------------------------------------------------------------------
IRS Advises re Delinquent     HSRTP                    July 18-27, 2015
 International Information
 Return Submission
 Procedures
------------------------------------------------------------------------
Practical Advice for an IRS   HSRTP                    July 15, 2015
 Examination
------------------------------------------------------------------------
NEW IRS Guidance Limits FBAR  HSRTP                    June 12, 2015
 Penalties!
------------------------------------------------------------------------
Reminder FBAR Electronic      HSRTP                    June 30, 2015
 Filing Due by June 30, 2015
------------------------------------------------------------------------
IRS Audit Techniques Guides   HSRTP                    May 15, 2015
------------------------------------------------------------------------
Clinton Foundation to File    HSRTP                    May 1, 2015
 Amended Returns, Should
 You?
------------------------------------------------------------------------
Tax Return Should Not         HSRTP                    Feb. 27, 2015
 Represent an Offer to
 Negotiate Deductions With
 the Government
------------------------------------------------------------------------
President Obama Announces     HSRTP from the White     Feb. 25, 2015
 Intent to Nominate Cono R.    House--Press Release
 Namorato, for Assistant
 Attorney General for the
 Tax Division, Department of
 Justice
------------------------------------------------------------------------
Answering Your Civil and      ABAWebinar               Feb. 20. 2015
 Criminal Offshore
 Disclosure Question
------------------------------------------------------------------------
ICU Reveals Swiss HSBC Data   HSRTP                    Feb. 9, 2015
------------------------------------------------------------------------
Fraudulent Failure to File    HSRTP                    Jan. 23, 2015
 Tax Returns--75% of the Tax
 Due!
------------------------------------------------------------------------
How Long Should I Keep Tax    HSRTP                    Dec. 7, 2014
 Records?
------------------------------------------------------------------------
Random Thoughts re IRS        HSRTP                    Nov. 24, 2014
 Examination Representation
------------------------------------------------------------------------
Voluntary Disclosures by Non- HSRTP                    Nov. 18, 2014
 Filers
------------------------------------------------------------------------
Warning Signs of an IRS       HSRTP                    Nov. 3, 2014
 Criminal Tax Prosecution
 Referral
------------------------------------------------------------------------
IRS: Common Badges of Tax     HSRTP                    Oct. 2, 2014
 Fraud
------------------------------------------------------------------------
IRS Interview of Taxpayers    HSRTP                    Sept. 22, 2014
 and Return Preparers
------------------------------------------------------------------------
Bankruptcy (Tax) Law Must     HSRTP                    Sept 15, 2014
 Apply Equally to the Rich
 and Poor Alike
------------------------------------------------------------------------
Voluntary Disclosure--        HSRTP                    Sept 12, 2014
 Benefits of Timely Filing
 Amended and Delinquent Tax
 Returns
------------------------------------------------------------------------
IRS Non-Filers Beware: Who's  HSRTP                    Sept. 8, 2014
 That Knocking at Your Door?
------------------------------------------------------------------------
Agostino and Associates       Agostino and Associates  Sept. 2, 2014
 Newsletter--De Novo Review
 of Assessable International
 Penalties
------------------------------------------------------------------------
Recommendations for IRS Tax   HSRTP                    Aug. 26, 2014
 Return Preparers
------------------------------------------------------------------------
Hidden Resources--IRS Audit   HSRTP                    Aug. 12, 2014
 Techniques Guides
------------------------------------------------------------------------
Am I ``Non-Willful'' Under    HSRTP                    Aug. 8, 2014
 the IRS OVDP Streamlined
 Procedures?
------------------------------------------------------------------------
IRS Methods of Indirectly     HSRTP                    Aug. 5, 2014
 Determining Taxable Income
------------------------------------------------------------------------
FIRST TIME ABATE of IRS       HSRTP                    July 31, 2014
 Penalties
------------------------------------------------------------------------
OVDP and Streamlined          HSRTP                    July 2, 2014
 Procedures: Expect the
 Unexpected!
------------------------------------------------------------------------
Critical Links--2014 OVDP     HSRTP                    June 26, 2014
 and Streamlined Filing
 Compliance Procedures
------------------------------------------------------------------------
IRS OVDP Opt Out Vs.          HSRTP                    June 24, 2014
 Transition to the New
 Streamlined Procedures?
------------------------------------------------------------------------
IRS Changes Streamlined OVDP  HSRTP                    June 22, 2014
 Reducing FBAR Penalty
 Exposure!
------------------------------------------------------------------------
IRS Makes Major Changes to    HSRTP                    June 19, 2014
 Offshore Voluntary
 Disclosure Program!
------------------------------------------------------------------------
Reminder: 2013 FBAR Filing    HSRTP                    June 16, 2014
 Due by June 30, 2014
------------------------------------------------------------------------
Zwerner: Jury Determines      HSRTP                    May 29, 2014
 150% FBAR Penalty Applies--
 Excessive Fines Clause to
 the Rescue?
------------------------------------------------------------------------
Protecting Privileges During  HSRTP                    May 17, 2014
 an IRS Examination
------------------------------------------------------------------------
U.S. Seeks FBAR Related       HSRTP                    Apr. 15, 2014
 Forfeiture of $12 Million
------------------------------------------------------------------------
Just Released: Hot Audit      HSRTP                    Apr. 12, 2014
 Issues for the California
 FTB!
------------------------------------------------------------------------
Virtual Currency Constitutes  HSRTP                    Apr. 4, 2014
 Taxeable Property for U.S.
 Federal Tax Purposes
------------------------------------------------------------------------
IRS FBAR OVDP Opt-Out         HSRTP                    Mar. 25. 2014
 Intetview Questions
 Revealed!
------------------------------------------------------------------------
IRS Internal IDR Training     HSRTP                    Mar. 21, 2014
 Materials Revealed!
------------------------------------------------------------------------
New IRS LB&I Revised IDR      HSRTP                    Mar. 17, 2014
 Enforcement Process
------------------------------------------------------------------------
``Ballpark Guesstimate''      HSRTP                    Mar. 12, 1014
 Insufficient to Support
 ``Real Estate
 Professional'' Status--
 Accuracy-Related Penalty
 Applied
------------------------------------------------------------------------
Simplified Option for Home    HSRTP                    Mar. 10, 2014
 Office Deduction Now
 Available!
------------------------------------------------------------------------
IRS-Criminal Investigation    HSRTP                    Mar. 6, 2014
 2014 Investigative
 Priorities
------------------------------------------------------------------------
IRS Identifies the ``Dirty    HSRTP                    Mar. 5, 2014
 Dozen'' Tax Scams for 2014
------------------------------------------------------------------------
Offshore Tax Evasion: The     HSRTP                    Feb. 25, 2014
 Effort to Collect Unpaid
 Taxes on Billions in Hidden
 Offshore Accounts
------------------------------------------------------------------------
Criminal Tax Prosecutions     HSRTP                    Feb. 5, 2014
 Surge Under President Obama
------------------------------------------------------------------------
Civil Detention for Failure   HSRTP                    Feb. 4, 2014
 to Pay Taxes
------------------------------------------------------------------------
Badges of Fraud--IRS Goes     HSRTP                    Feb. 3, 2014
 Undercover in a
 ``Gentleman's Club''
------------------------------------------------------------------------
Tax Enforcement Priorities    HSRTP                    Jan. 17, 2014
 for 2014 and Beyond!
------------------------------------------------------------------------
``Fedex Express Saver'' is    HSRTP                    Nov. 26, 2013
 NOT Valid for Filing of a
 Timely Tax Court Petition
 (or Tax Returns)
------------------------------------------------------------------------
New FBAR Form 114 and         HSRTP                    Nov. 10, 2013
 Revised IRS Appeals
 Procedures re FBAR
 Penalties
------------------------------------------------------------------------
IRS Warns of Telephone Scam   HSRTP                    Nov. 1, 2014
 Targeting Taxpayers,
 Including Recent Immigrants
------------------------------------------------------------------------
Tax Practice Tool: IRS Audit  HSRTP                    Oct. 12, 2013
 Techniques Guides
------------------------------------------------------------------------
October 15th Deadline         HSRTP                    Oct. 8, 2013
 Remains in Effect for
 Taxpayers Who Requested a
 Six-Month Extension to File
 Tax Return
------------------------------------------------------------------------
A Temporary and Transitory    HSRTP                    Oct. 6, 2013
 Visit With California
 Residency
------------------------------------------------------------------------
Zwerner Answers DoJ Efforts   HSRTP                    Sept. 26, 2013
 to Collect Multiple 50
 Percent Civil FBAR
 Penalties
------------------------------------------------------------------------
New IRS Commissioner          HSRTP                    Aug. 3, 2013
 Nominated by President
 Obama
------------------------------------------------------------------------
Reminder: 2012 FBAR Filing    HSRTP                    Jun. 20, 2013
 Due by June 30th
------------------------------------------------------------------------
DoJ Files Action to Collect   HSRTP                    Jun. 15, 2013
 Multiple 50% Civil FBAR
 Penalties in U.S.A. vs.
 Zwerner
------------------------------------------------------------------------
Rescissions of IRS OVDP Pre-  HSRTP                    Jun. 12, 2013
 Clearance Letters
------------------------------------------------------------------------
IRS FBAR Voluntary            HSRTP                    Jun. 12, 2013
 Disclosure Program, Opt-Out
 Considerations and
 Taxpayers Interviews
------------------------------------------------------------------------
Form 8300: Reporting          HSRTP                    Jun. 12, 2013
 Domestic Currency
 Transactions
------------------------------------------------------------------------
New Filing Compliance         HSRTP                    Sept. 18, 2012
 Procedures for Non-
 Residence U.S. Taxpayers
------------------------------------------------------------------------
IRS Provides Updated          HSRTP                    Jun. 27, 2012
 Guidance re FBAR Voluntary
 Disclosure Program
------------------------------------------------------------------------
The IRS Whistleblower         HSRTP                    May 23, 2012
 Program: Making Money the
 Old Fashioned Way!
------------------------------------------------------------------------
Practice Tips From the Tax    HSRTP                    Mar. 10, 2012
 Trenches
------------------------------------------------------------------------
FBAR Offshore Voluntary       HSRTP                    Jan. 11, 2012
 Disclosure Initiative
 (OVDI)
------------------------------------------------------------------------
Non-Filers Beware: Who's      HSRTP                    Jan. 11, 2012
 That Knocking on Your Door?
------------------------------------------------------------------------
Examining the FBAR/Offshore   HSRTP                    Jan. 11, 2012
 Account Information
 Document Request (IDR)
------------------------------------------------------------------------
IRS Voluntary Disclosure      HSRTP                    Jan. 11, 2012
 Practice
------------------------------------------------------------------------
Overview of FBAR Reporting    HSRTP                    Jan. 11, 2012
 Requirements
------------------------------------------------------------------------
Qualified Amended Returns     HSRTP                    Jan. 11, 2012
 Can Eliminate Accuracy
 Related Tax Penalty
------------------------------------------------------------------------
FOIA Request: A Look Into     HSRTP                    Jan. 11, 2012
 the IRS Examination File
------------------------------------------------------------------------
IRS Global High-Wealth        HSRTP                    Jan. 11, 2012
 Industry Group: Evaluation
 of an IRS Wealth Squad IDR
------------------------------------------------------------------------
Basic Audit Techniques:       HSRTP                    Jan. 11, 2012
 Taxpayer Interviews
------------------------------------------------------------------------
IRS Audit Techniques Guides   HSRTP                    Jan. 11, 2012
------------------------------------------------------------------------
IRS Voluntary Worker          HSRTP                    Jan. 11, 2012
 Classification Settlement
 Program
------------------------------------------------------------------------
New 2012 IRS FBAR Voluntary   HSRTP                    Jan. 11, 2012
 Disclosure Initiative
------------------------------------------------------------------------
Making a Voluntary            HSRTP                    Jun. 18, 2011
 Disclosure Under the 2011
 OVDI
------------------------------------------------------------------------
Tax Penalty Relief--Reliance  HSRTP                    Jun. 18, 2011
 on Tax Adviser
------------------------------------------------------------------------
Current IRS Enforcement       HSRTP                    Sept. 10, 2010
 Priorities
------------------------------------------------------------------------
Introduction/Legal            HSRTP                    Sept. 9, 2010
 Disclaimer
------------------------------------------------------------------------
U.S. Launches Criminal        Forbes                   Apr. 23, 2016
 Inquiry Into 200 U.S.
 Citizens Named in the
 Panama Papers
------------------------------------------------------------------------
The Panama Papers and         Forbes                   Apr. 6, 2016
 Lessons Learned From Years
 of Offshore Leaks
------------------------------------------------------------------------
Where's My Tax Refund?        Forbes                   Apr. 3, 2016
------------------------------------------------------------------------
No Ordinary Audit: Donald     Forbes                   Feb. 28, 2016
 Trump Is Facing the IRS
 ``Wealth Squad''
------------------------------------------------------------------------
IRS FBAR Streamlined          Forbes                   Aug. 2, 2015
 Procedures Revisited: Am I
 Non-Willful?
------------------------------------------------------------------------
Reminder: FBAR Electronic     Forbes                   Jun. 23, 2015
 Filing Due By June 30, 2015
------------------------------------------------------------------------
New IRS Guidance Limits FBAR  Forbes                   Jun. 9, 2015
 Penalties
------------------------------------------------------------------------
Clinton Foundation to File    Forbes                   Apr. 25, 2015
 Amended Returns; Should
 You?
------------------------------------------------------------------------
Am I Non-Willful Under the    Forbes                   Aug. 8, 2014
 OVDP Streamlined
 Procedures?
------------------------------------------------------------------------
IRS OVDP vs. Streamlined:     Forbes                   Jul 7, 2014
 What to Do
------------------------------------------------------------------------
Important Links to Latest     Forbes                   Jun. 23, 2014
 IRS OVDP Procdures
------------------------------------------------------------------------
FBAR Penalty Applies to       Forbes                   Jun. 19, 2014
 Offshore Poker Accounts
------------------------------------------------------------------------
Zwerner: Jury Determines      Forbes                    May 19, 2014
 150% FSAR Penalty Applies--
 What Next?
------------------------------------------------------------------------
U.S. Seeks FBAR Related       Forbes                   Apr. 16, 2014
 Forfeiture of $12 Million
------------------------------------------------------------------------
``FedEx Express Saver'' is    Forbes                   Apr. 11, 2014
 NOT Valid for Filing of a
 Timely Tax Court Petition
 (or Tax Return)
------------------------------------------------------------------------
``Ballpark Guesstimate''      Forbes                   Mar. 12, 2014
 Insufficient to Support
 ``Real Estate Pro'' Status--
 Penalties Applied
------------------------------------------------------------------------
Offshore Tax Evasion: The     Forbes                   Feb, 25, 2014
 Effort to Collect Unpaid
 Taxes on Billions in Hidden
 Offshore Accounts
------------------------------------------------------------------------
FBAR: Revised IRS Penalty     Forbes                   Nov. 25, 2013
 Appeals Procedures
------------------------------------------------------------------------
Temporary and Transitory      Forbes                   Nov. 4, 2013
 Visit With (California)
 Residents
------------------------------------------------------------------------
IRS Shutdown? October 15th    Forbes                   Oct. 8, 2013
 Deadline Remains in Effect
------------------------------------------------------------------------
Zwerner Answers DoJ Efforts   Forbes                   Sept. 26, 2013
 to Collect Multiple 50
 Percent Civil FBAR
 Penalties
------------------------------------------------------------------------
President Obama Nominates     Forbes                   Aug. 7, 2013
 John Koskinen as Next IRS
 Commissioner
------------------------------------------------------------------------
Do You Outsource Payroll?     Forbes                   Jul. 17, 2013
 Pay Attention to These IRS
 Tips
------------------------------------------------------------------------
IRS FBAR Voluntary            Forbes                   Jul. 4, 2013
 Disclosure Program and Opt
 Out Considerations
------------------------------------------------------------------------
Reminder: FBAR Filing Due by  Forbes                   Jun. 25, 2013
 June 30th
------------------------------------------------------------------------
DoJ Files Action to Collect   Forbes                   Jun. 17 2013
 Multiple 50 Percent Civil
 FBAR Penalties in U.S.A.
 vs. Zwerner
------------------------------------------------------------------------
IRS FBAR Voluntary            Forbes                   Jun. 12, 2013
 Disclosure Program:
 Taxpayer Interview
------------------------------------------------------------------------
Non Filers Beware: Who's      Forbes                   Nov. 15, 2012
 That Knocking at Your Door?
------------------------------------------------------------------------
New Streamlined Filing        Forbes                   Sept. 18, 2012
 Compliance Procedures for
 Non-Resident U.S. Taxpayers
------------------------------------------------------------------------
IRS Provides Updated          Forbes                   Jun. 27, 2012
 Guidance re FBAR Voluntary
 Disclosure Program
------------------------------------------------------------------------
Six-Year Statute of           Forbes                   Apr. 27, 2012
 Limitations Does Not Apply
 to Deficiency From
 Overstated Basis
------------------------------------------------------------------------
Get an Extension of Time to   Forbes                   Apr. 14, 2012
 File 2011 Returns Beyond
 the April 17th Deadine
------------------------------------------------------------------------
Deja Vu--Yet Another IRS      Forbes                   Jan. 10, 2012 and
 FBAR Voluntary Dislosure                               Feb. 9, 2012
 Initiative
------------------------------------------------------------------------


16.  Speeches (list all formal speeches you have delivered during the 
past 5 years which are on topics relevant to the position for which you 
have been nominated):

        I have exercised my best efforts to identify all speeches I 
        have delivered within the past 5 years on topics relevant to 
        the position for which I have been nominated. Despite my 
        searches, there may be other speeches I have been unable to 
        identify, find, or presently recall. However, I can represent 
        that I have not published materials that would be embarrassing 
        to me or to the government if they were to be later disclosed 
        publicly. In this regard, please see the attached list 1-66 of 
        presentation outlines (presentations were not scripted but the 
        attached written materials were generally provided in 
        association with the presentation).


                        PowerPoint Presentations
------------------------------------------------------------------------
           Title                      Venue                  Date
------------------------------------------------------------------------
Hot Topics in IRS            Cal-CPA--Fed., State,   Nov. 16, 2017
 Enforcement--35+ Years in    Local, and Int'l Tax--
 the Tax Trenches             Universal City, CA
------------------------------------------------------------------------
IRS Audit Issues and Hot     CP America Int'l,       Nov. 14, 2017
 Topics--35+ Years in the     Inc.--Tucson, AZ
 Tax Trenches
------------------------------------------------------------------------
Tax Controversies--Tips      76th NYU Institute on   Nov. 12, 2017
 From the Tax Trenches--      Federal Taxation--San
 Everything Is Fine . . .     Francisco, CA
 Until it Isn't
------------------------------------------------------------------------
Hot Topics in IRS            Pacific Tax Institute-- Nov. 1, 2017
 Enforcement--35+ Years in    Seattle, WA
 the Tax Trenches
------------------------------------------------------------------------
Tax Controversies--Tips      76th NYU Institute on   Oct. 22, 2017
 From the Tax Trenches--      Federal Taxation--New
 Everthing Is Fine . . .      York, NY
 Until it Isn't
------------------------------------------------------------------------
From the Trenches--150+      Calif. Society of       Aug. 25, 2017
 Years of Tax Disputes        CPAs--Hollywood/
                              Beverly Hills
                              Discussion Group--Los
                              Angeles, CA
------------------------------------------------------------------------
Hot Topics in IRS            17th Annual Oregon Tax  Jun. 1, 2017
 Enforcement--Tips From the   Institute--Portland,
 Tax Trenches                 OR
------------------------------------------------------------------------
Hot Topics in IRS            Calif. Society of       May 5, 2017
 Enforcement--Tips From the   CPAs--Hollywood/
 Tax Trenches                 Beverly Hills
                              Discussion Group--
                              Los Angeles, CA
------------------------------------------------------------------------
Offshore Tax Enforcement:    AICPA--2016 National    Nov. 14, 2016
 Today's Smaller, More        Tax Conference
 Transparent World--
 Government and Taxpayer
 Perspectives--Session #7
------------------------------------------------------------------------
Insight and Warnings on      AICPA 2016 National     Nov. 14, 2016
 Today's Tax Enforcement      Tax Conference
 Priorities--Session #11
------------------------------------------------------------------------
Tax Controversies--Tips      75th NYU Institute on   Nov. 13, 2016
 From the Tax Trenches        Federal Taxation--San
                              Diego, CA
------------------------------------------------------------------------
Conflicts of Interest and    Pacific Tax Institute-- Nov. 3, 2016
 Disclosures in the           Seattle, WA
 Performance of Tax
 Services
------------------------------------------------------------------------
California Non-Residency     Pacific Tax Institute-- Nov. 3, 2016
 Determiniations--A           Seattle, WA
 Temporary and Transitory
 Visit With California
 Residency
------------------------------------------------------------------------
Tax Controversies--Tips      75th NYU Institute on   Oct. 23, 2016
 From the Tax Trenches        Federal Taxation--New
                              York, NY
------------------------------------------------------------------------
Offshore Tax Enforcement                             Sept. 1, 2016
 Update--Tips From the Tax
 Trenches
------------------------------------------------------------------------
Current Developments in IRS  Calif. Society of       Jun. 12, 2016
 Enforcement--Tips From the   CPAs--Hollywood/
 Tax Trenches                 Beverly Hills
                              Discussion Group
------------------------------------------------------------------------
Economic Substance,          Practising Law          Jun. 9, 2016
 Judicial Doctrines, and      Institute--San
 Ethics                       Francisco, CA
------------------------------------------------------------------------
IRS Audit Issues and Hot     7th Annual Southwest    Dec. 3. 2015
 Topics--Tips From the Tax    Tax Conference--The
 Trenches                     All Around Tax
                              Conference: Not Just
                              a Tax Update--Las
                              Vegas, NV
------------------------------------------------------------------------
Tax Controversies--Tips      74th NYU Institute on   Nov. 15, 2015
 From the Tax Trenches--      Federal Taxation--San
 Everthing Is Fine . . .      Francisco, CA
 Until it Isn't
------------------------------------------------------------------------
A Temporary and Transitory   Pacific Tax Institute-- Nov. 5, 2015
 Visit With California        Seattle, WA
 Residency
------------------------------------------------------------------------
Hot Topics in IRS            Pacific Tax Institute-- Nov. 5, 2015
 Enforcement--Tips From the   Seattle, WA
 Tax Trenches
------------------------------------------------------------------------
Tax Preparer Obligations     Clark Nuber--Seattle,   Nov. 4, 2015
 and Penalties--IRS Audit     WA
 Issues and Hot Topics--
 Tips From the Tax Trenches
------------------------------------------------------------------------
Ethics and OPR--Conflicts,   2015 AICPA National     Nov. 3, 2015
 Omissions, and Ethics--      Tax Conference
 Session #20
------------------------------------------------------------------------
Tax Controversies--Tips      74th NYU Institute on   Oct. 23, 2015
 From the Tax Trenches--      Federal Taxation--New
 Everthing Is Fine . . .      York, NY
 Until it Isn't
------------------------------------------------------------------------
Practitioners Standards,     2015 AICPA              Oct. 2015
 Penalties, and IRS
 Enforcement Initiatives--
 When Problems Are Likely
 to Occur in a Tax or
 Estate Planning Practice--
 Session #22
------------------------------------------------------------------------
FBAR Overview--Sanctions--                           Aug. 30, 2015
 Criminal Penalties
------------------------------------------------------------------------
Tax Post-Filing              AICPA                   Aug. 12, 2015
 Representation 101--IRS
 Audits, Administrative
 Appeals, and Settlements--
 Everything Is Fine . . .
 Until it Isn't
------------------------------------------------------------------------
FBAR Overview--Sanctions--                           Jun. 30, 2015
 Criminal Penalties
------------------------------------------------------------------------
What's Next in               7th Annual NYU Tax      Jun. 5, 2015
 International Tax            Controversy Forum--
 Enforcement--Tips From the   New York, NY
 Trenches
------------------------------------------------------------------------
Tax Preparer Obligations     2015 AICPA Tax          May 19, 2015
 and Penalties--Conflicts,    Strategies for the
 Omissions, Controversy,      High- Income
 and Ethics--Session #25      Individual
------------------------------------------------------------------------
``M''--Marital               47th Annual Family Law  May 2, 2015
 Dissolutions--Is the IRS     Symposium--Universal
 Watching Your Clients?--     City, CA
 Tips From the Tax Trenches
------------------------------------------------------------------------
Enforcement and Criminal     39th FBA Annual Tax     Mar. 6, 2015
 Tax Symposium                Law Conference
------------------------------------------------------------------------
Enforcement Update From the                          Feb. 8, 2015
 Trenches
------------------------------------------------------------------------
Offshore Tax Enforcement     62nd Annual Taxation    Dec. 4, 2014
 and Compliance--Tips From    Conference--UT School
 the Tax Trenches!            of Law--Austin, TX
------------------------------------------------------------------------
IRS Audit Issues and Hot     6th Annual Southwest    Dec. 2, 2014
 Topics--Tips From the Tax    Tax Conference--Las
 Trenches!                    Vegas, NV
------------------------------------------------------------------------
Tax Controversies--Tips      73rd NYU Institute on   Nov. 16, 2014
 From the Tax Trenches        Federal Taxation--San
                              Diego, CA
------------------------------------------------------------------------
When Problems Are Likely to  2014 AICPA--Tax         Nov. 14, 2014
 Occur in a Tax or Estate     Strategies for the
 Planning Practice--Tips      High- Income
 From the Tax Trenches--      Individual Conference
 Session #32
------------------------------------------------------------------------
IRS Audit Issues and Hot     2014 Tax Conference--   Nov. 10, 2014
 Topics--Tips From the Tax    CPAmerica
 Trenches!                    International--San
                              Juan, Puerto Rico
------------------------------------------------------------------------
Hot Topics in IRS Tax        25th Annual             Nov, 6, 2014
 Enforcement                  Philadelphia Tax
                              Institute--Philadelph
                              ia, PA
------------------------------------------------------------------------
Tax Post-Filing              2014 AICPA National     Nov. 5, 2014
 Representation 101--IRS      Tax Conference
 Audits, Administrative
 Appeals, and Settlements--
 Session #303
------------------------------------------------------------------------
Practical Tax Advice--       2014 AICPA National     Nov. 4, 2014
 Protecting Your Clients      Tax Conference
 and Yourself--Tips From
 the Tax Trenches--Session
 #31
------------------------------------------------------------------------
Ethics and OPR: Covering     2014 AICPA National     Nov. 4, 2014
 Conflicts, Omissions,        Tax Conference
 Controversy, and Ethics--
 Session #20
------------------------------------------------------------------------
Strategic Options for        Pacific Tax Institute-- Oct. 30, 2014
 Taxpayers re International   Seattle, WA
 Tax Enforcement--Session
 B1
------------------------------------------------------------------------
Current Developments in IRS  Pacific Tax Institute-- Oct. 30, 2014
 Enforcement--Tips From the   Seattle, WA
 Tax Trenches!
------------------------------------------------------------------------
Tax Controversies--Tips      73rd NYU Institute on   Oct. 19, 2014
 From the Tax Trenches        Federal Taxation--New
                              York, NY
------------------------------------------------------------------------
Current Developments at the  11th Annual Nonprofit   Sept. 19, 2014
 IRS Affecting Nonprofits     Organizations
                              Seminar--Chaminade
                              Univ. of Honolulu, HI
------------------------------------------------------------------------
Audits: Types of Audit,      ALI-CLE--Handling a     Aug. 30, 2014
 Audit Techniques and         Tax Controversy:
 Procedures, and              Audits, Appeals,
 Limitations                  Litigation, and
                              Collections
------------------------------------------------------------------------
Taxpayer Representation      2014 NYU/SCPS 6th       Jun. 19, 2014
 Tips From the Tax Trenches   Annual Tax
                              Controversy Forum--
                              New York, NY
------------------------------------------------------------------------
Information Sharing and      Federal Bar             Feb. 28, 2014
 Enforcement                  Association--Washingt
                              on, DC
------------------------------------------------------------------------
Representing Clients in IRS  ALI CLE--Hot Topics     Dec. 16, 2014
 Examinations                 for Accountants and
                              Tax Lawyers
------------------------------------------------------------------------
IRS Audit Issues and Hot     Estate Planning         Dec. 4, 2013
 Topics of Interest to        Council of Seattle
 Estate Planners--Current
 Enforcement IRS Priorities
 and Strategies
------------------------------------------------------------------------
Hot Topics in IRS Tax        5th Annual Southwest    Dec. 2, 2013
 Enforcement--Current         Tax Conference--
 Developoments in the Tax     Nevada Society of
 Trenches                     CPAs--Las Vegas, NV
------------------------------------------------------------------------
Tax Controversies--Tips      72nd NYU Institute on   Nov. 17, 2013
 From the Tax Trenches        Federal Taxation--San
                              Francisco, CA
------------------------------------------------------------------------
Hot Topics in IRS Tax        Pacific Tax Institute-- Nov. 15, 2013
 Enforcement: Tips From the   Seattle, WA
 Tax Trenches!
------------------------------------------------------------------------
Hot Topics in IRS Tax        24th Annual             Nov. 7, 2013
 Enforcement                  Philadelphia Tax
                              Institute--Philadelph
                              ia, PA
------------------------------------------------------------------------
Current IRS Enforcement      2013 AICPA National     Nov. 6, 2013
 Priorities--Workshop         Tax Conference--Tax
 Session #2                   Controversy Worksop--
                              Washington, DC
------------------------------------------------------------------------
Coming Out of the Cold:      2013 AICPA National     Nov. 4, 2013
 Voluntary Disclosures--      Tax Conference
 Tips From the Tax
 Trenches--Session #14
------------------------------------------------------------------------
Broad Issues Raised by High  48th Annual Southern    Oct. 23, 2013
 Net Worth IRS Audits--       Federal Tax Institute
 Everything Is Fine . . .
 Until it Isn't
------------------------------------------------------------------------
Tax Controversies--Tips      72nd NYU Institute on   Oct. 20, 2013
 From the Tax Trenches        Federal Taxation--New
                              York, NY
------------------------------------------------------------------------
IRS Enforcement Update and   Tulane Tax Institute--  Oct. 16, 2013
 Wealth Squad Examinations    New Orleans, LA
------------------------------------------------------------------------
Nuts and Bolts of IRS        2013 AICPA National     Oct. 13, 2013
 Audits--Tips From the Tax    Tax conference
 Trenches--Session #10
------------------------------------------------------------------------
IRS Audit Issues and Hot     Woodland Hills Tax and  Sept. 11, 2013
 Topics of Interest to        Estate Planning
 Estate Planners              Council--Woodland
                              Hills, CA
------------------------------------------------------------------------
Preparing and Arguing Your   AICPA--Tax Planning,    May 17, 2013
 Case in IRS Appeals          Compliance, and
                              Controversy--Conferen
                              ce for Businesses and
                              Individuals
------------------------------------------------------------------------
Roundtable Discussion--      2013 Tax Institute--    Jan. 2013
 Kathryn Keneally, Asst.      USC Gould School of
 Atty. Gen. of the Tax        Law
 Div., USDOJ
------------------------------------------------------------------------
FBAR Penalty Update and      ???                     ???, 2017
 Streamlined Offshore
 Disclosures: To File or
 Not to File?--Offshore Tax
 Enforcement Update
------------------------------------------------------------------------


17.  Qualifications (state what, in your opinion, qualifies you to 
serve in the position to which you have been nominated):

        The activities of the IRS touch virtually every American, and 
        it is an honor to have been nominated to be the next 
        Commissioner of the IRS. I have more than 35 years of 
        experience as a tax lawyer representing taxpayers before all 
        administrative levels of the IRS (examinations, appeals, 
        litigation, collection, etc.) as well as in tax matters before 
        the Tax Division of the U.S. Department of Justice, various 
        State taxing authorities, the United States Tax Court, and the 
        United States District Court. As a strong supporter for the 
        integrity our system of tax administration, I have been 
        appointed by various Federal and State taxing authorities to 
        their advisory boards and have been invited to lecture to IRS 
        and other governmental tax authorities on issues including the 
        accountability of both government and private tax practitioners 
        to the public as well as to our system of taxation.

        I began serving on the IRS Advisory Council (IRSAC) in 2008 and 
        ultimately became Chair of IRSAC in 2011. The IRSAC serves as 
        an advisory body to the IRS Commissioner providing an organized 
        public forum bringing IRS executives and officials together 
        with representatives of the public to discuss relevant tax 
        administration issues. In this regard, IRSAC suggests best 
        practices and operational improvements for taxpayer services at 
        the IRS as well as current or proposed IRS policies, programs, 
        and procedures.

        For almost 20 years, I have served in an advisory capacity as a 
        member of the Advisory Board for the California Franchise Tax 
        Board and, for approximately 4 years, I also served as a member 
        of the Advisory Council of the California State. Board of 
        Equalization. I am currently Vice-Chair, Administration for the 
        12,000+ member Taxation Section of the American Bar 
        Association, and I am currently President of the American 
        College of Tax Counsel. I previously chaired the 4,000+ member 
        Taxation Section of the California Bar. Additionally, I have 
        served as chair of numerous national, State, and local 
        professional tax-related conferences and am also a frequent 
        lecturer at such conferences before enrolled agents, certified 
        public accountants, accountants, tax lawyers, tax practitioners 
        from industry, and others.

        If confirmed, I will do my utmost to successfully carry out the 
        responsibilities entrusted to me as Commissioner of Internal 
        Revenue and help IRS become more efficient, more responsive, 
        and more respected in meeting and hopefully surpassing the 
        expectations of America's taxpayers.

                   B. FUTURE EMPLOYMENT RELATIONSHIPS

 1.  Will you sever all connections with your present employers, 
business firms, associations, or organizations if you are confirmed by 
the Senate? If not, provide details.

        Yes, but I will continue to participate in the Cash Balance 
        Plan and in the Profit Sharing Plan (a defined contribution 
        plan) of Hochman, Salkin, Rettig, Toscher, and Perez, P.C. The 
        plan sponsor will not make further contributions, after my 
        separation from Hochman, Salkin, Rettig, Toscher, and Perez, 
        P.C.

 2.  Do you have any plans, commitments, or agreements to pursue 
outside employment, with or without compensation, during your service 
with the government? If so, provide details.

        No.

 3.  Has any person or entity made a commitment or agreement to employ 
your services in any capacity after you leave government service? If 
so, provide details.

        No.

 4.  If you are confirmed by the Senate, do you expect to serve out 
your full term or until the next presidential election, whichever is 
applicable? If not, explain.

        Yes.

                   C. POTENTIAL CONFLICTS OF INTEREST

 1.  Indicate any investments, obligations, liabilities, or other 
relationships which could involve potential conflicts of interest in 
the position to which you have been nominated.

        N/A.

 2.  Describe any business relationship, dealing, or financial 
transaction which you have had during the last 10 years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated.

        During the last 10 years, I have been a tax lawyer with 
        Hochman, Salkin, Rettig, Toscher, and Perez, P.C. and have 
        served as tax counsel for numerous individuals and entities 
        involved in various tax-related disputes with the Internal 
        Revenue Service. In connection with the nomination process, I 
        have consulted with the Office of Government Ethics and the 
        Department of Treasury's designated ethics official to identify 
        potential conflicts of interest. Any potential conflicts of 
        interest will be resolved in accordance with the terms of an 
        ethics agreement that I have entered into with the Treasury's 
        designated ethics official and that has been provided to this 
        committee. I am not aware of any other potential conflicts of 
        interest.

 4.  Describe any activity during the past 10 years in which you have 
engaged for the purpose of directly or indirectly influencing the 
passage, defeat, or modification of any legislation or affecting the 
administration and execution of law or public policy. Activities 
performed as an employee of the Federal government need not be listed.

        N/A.

 5.  Explain how you will resolve any potential conflict of interest, 
including any that may be disclosed by your responses to the above 
items.

        In connection with the nomination process, I have consulted 
        with the Office of Government Ethics and the Department of 
        Treasury's designated ethics official to identify potential 
        conflicts of interest. Any potential conflicts of interest will 
        be resolved in accordance with the terms of an ethics agreement 
        that I have entered into with the Treasury's designated ethics 
        official and that has been provided to this committee. I am not 
        aware of any other potential conflicts of interest.

 5.  Two copies of written opinions should be provided directly to the 
committee by the designated agency ethics officer of the agency to 
which you have been nominated and by the Office of Government Ethics 
concerning potential conflicts of interest or any legal impediments to 
your serving in this position.

        Provided to committee.

                      D.  LEGAL AND OTHER MATTERS

 1.  Have you ever been the subject of a complaint or been 
investigated, disciplined, or otherwise cited for a breach of ethics 
for unprofessional conduct before any court, administrative agency, 
professional association, disciplinary committee, or other professional 
group? If so, provide details.

        No.

 2.  Have you ever been investigated, arrested, charged, or held by any 
Federal, State, or other law enforcement authority for a violation of 
any Federal, State, county, or municipal law, regulation, or ordinance, 
other than a minor traffic offense? If so, provide details.

        No.

 3.  Have you ever been involved as a party in interest in any 
administrative agency proceeding or civil litigation? If so, provide 
details.

        No.

 4.  Have you ever been convicted (including pleas of guilty or nolo 
contendere) of any criminal violation other than a minor traffic 
offense.? If so, provide details.

        No.

 5.  Please advise the committee of any additional information, 
favorable or unfavorable, which you feel should be considered in 
connection with your nomination.

        N/A.

                     E. TESTIFYING BEFORE CONGRESS

 1.  If you are confirmed by the Senate, are you willing to appear and 
testify before any duly constituted committee of the Congress on such 
occasions as you may be reasonably requested to do so?

        Yes.

 2.  If you are confirmed by the Senate, are you willing to provide 
such information as is requested by such committees?

        Yes, if such information is not otherwise legally precluded 
        from disclosure.

                                 ______
                                 
        Questions Submitted for the Record to Charles P. Rettig
               Questions Submitted by Hon. Orrin G. Hatch
    Question. One of the key accomplishments of the IRS, State revenue 
departments and private industry of the past few years is the creation 
of the Identity Theft Tax Refund Fraud Information Sharing and Analysis 
Center (IDTTRF-ISAC). This ISAC allows the participants in the tax 
preparation and banking areas to collect and analyze information 
regarding identity theft fraud schemes and patterns. The results today 
have been impressive. Do you intend to support this initiative and its 
funding?

    Answer. I agree the Information Sharing and Analysis Center (ISAC), 
along with the overall Security Summit initiative, has been a success 
in combating tax-related identity theft and helping taxpayers. If 
confirmed, I will continue to support the ISAC efforts and the 
continued partnership of the Security Summit initiative among the IRS, 
the States and the Nation's private-sector tax community.

    Question. In 2014, under the prior administration, the IRS provided 
guidance determining that convertible virtual currency should be 
treated as property for U.S. income tax purposes. The IRS received a 
number of comments from industry and even its own Inspector General 
criticizing the fact that many questions remained, making it difficult 
for taxpayers to appropriately comply with the guidance. The Inspector 
General noted in its report that, ``Although the IRS requested comments 
to Notice 2014-21 from the public, no actions were taken to address the 
comments received'' despite ``TIGTA [having] reviewed all the comments 
and [finding] several examples of information requested by the public 
that would be helpful in understanding how to comply with the tax 
reporting requirements when using or receiving virtual currencies.'' It 
seems to be widely recognized that various aspects of the taxation of 
virtual currencies do not fit neatly into existing taxation principles. 
Will you work with Congress and industry to help develop more 
appropriate guidelines for industry in this area?

    Answer. Virtual currency presents challenges not only for the U.S. 
tax administration but for tax administration globally. I will work 
with the Chief Counsel and other divisions of the IRS to respond to 
this challenge. I think it's also important to work closely with 
Congress and the private sector on this issue.

    Question. Mr. Rettig, do you believe the IRS should take additional 
steps to ensure the confidentiality of taxpayer information? What do 
you think might be cyber-security steps the IRS could take to protect 
taxpayer information--both from external hackers, as well as from 
employees inside the IRS who might inappropriately access certain 
taxpayer information?

    Answer. I believe that a critical component of providing 
outstanding taxpayer service involves ensuring that the information 
taxpayers provide to the IRS will be kept secure. If confirmed, I will 
assess what additional steps may be needed to advance cybersecurity. I 
look forward to working with the committee to protect taxpayers.

                                 ______
                                 
               Questions Submitted by Hon. Chuck Grassley
    Question. Mr. Rettig, as you are aware, I have been a staunch 
proponent of the IRS whistleblower program, and I am pleased to see you 
have written favorably about the program on several occasions. For 
instance, in 2013 you wrote that the IRS whistleblower rules should 
require payment of awards from all proceeds collected by the 
government, regardless of the particular title or underlying law 
violation. I have long agreed and just this year was successful in 
passing a clarification to the definition of collected proceeds under 
the program. My amendment will help ensure whistleblowers are not 
shortchanged and are incentivized to bring valuable information to the 
IRS that results in criminal fines and other non-title 26 penalties. 
However, I have some concerns that the IRS is dragging its feet in 
implementing this policy. What would you do as IRS Commissioner to make 
sure that the implementation of the collected proceeds rule is not 
delayed and is consistently applied to whistleblowers?

    Answer. I agree that the whistleblower program is a valuable tool 
in supporting IRS tax administration efforts. If confirmed, I will work 
with you and the members of this committee to identify ways to make the 
whistleblower program more efficient and effective.

    Question. As you may be aware, I have been a strong proponent of 
the IRS private debt collection program. In 2015, Congress updated and 
made mandatory the IRS private debt collection program. This program is 
designed to chip away at the tax gap by requiring the IRS to contract 
with private debt collectors to collect inactive tax debts owed to the 
government. These are tax debts not being worked by the IRS and absent 
the program would likely never be collected. According to the non-
partisan Joint Committee on Taxation, the program could collect $2.4 
billion over 10 years. However, I have had concerns with the slow low 
rollout of the program and am concerned some within the IRS and 
Treasury may be working to undermine the program. Can you assure me 
that as Commissioner you will implement and administer the private debt 
collection program in accordance with, and to the full extent of, the 
law?

    Answer. As you note, this program is law. If confirmed, I will 
ensure that the IRS fully implements the law.

    Question. The IRS has long struggled to address the high improper 
payment rates of refundable credits, such as the Earned Income Tax 
Credit (EITC). According to the Treasury Inspector General of Tax 
Administration (TIGTA), more than $16 billion in improper EITC payments 
were made in fiscal year 2017. One of the requirements of the EITC is 
that a taxpayer must have a work authorized Social Security number to 
be eligible for the EITC. Yet, according to TIGTA the IRS has yet to 
develop a process to prevent individuals with ``non-work'' Social 
Security numbers from receiving the EITC. As a result, more than $100 
million in erroneous EITC payments may be made annually to those 
ineligible to work in the United States. As IRS Commissioner, what 
steps would you take to address these types of improper payments?

    Answer. If confirmed, I will review the procedures that the IRS has 
in place to prevent improper payments--including those related to the 
Earned Income Tax Credit--and will work to strengthen those procedures 
where necessary. I look forward to working with the committee on this 
issue.

    Question. In February, the Treasury Inspector General for Tax 
Administration (TIGTA) reported that nearly 2,000 IRS employees with 
disciplinary actions received employee awards or bonuses. As part of 
their review, TIGTA noted that IRS screening was insufficient in 
identifying employees with tax compliance issues that were not 
otherwise disciplined. This included employees who had tax liens or 
were in failure to pay status. Given the IRS's role in ensuring the 
integrity of our tax system this is particularly troubling. As 
Commissioner what actions would you take to ensure employees with 
conduct issues, particularly those not in compliance with our tax laws, 
are not rewarded with bonuses?

    Answer. If confirmed, I will work to ensure that bonuses only go to 
employees that deserve them.

    Question. I have long been concerned about IRS employees spending 
more time on union activities than employees in other government 
agencies. Time spent on union activities takes away from education and 
enforcement activities. As an example, a 2013 Freedom of Information 
request revealed that about 200 IRS employees were working full-time on 
labor union activities. This past May, President Trump issued an 
executive order that seeks to limit the amount of time Federal 
employees spend on union activities. However, it is ultimately up to 
agencies as part of contract negotiations with employee unions to 
implement the order. Are you aware of any efforts by the IRS to update 
its contract with the Treasury Employees Union in light of this 
executive order? If not, would you expect to do so should you be 
confirmed as Commissioner?

    Answer. I am not familiar with the current status of contract 
negotiations between the IRS and the National Treasury Employees Union. 
If I am confirmed, I will review these negotiations. I believe IRS 
employees' first priority should be assisting taxpayers with their 
filing and compliance obligations or working to support those taxpayer-
focused efforts.

                                 ______
                                 
              Questions Submitted by Hon. Michael B. Enzi
    Question. In 2009, the IRS began developing the Customer Account 
Data Engine (CADE 2) to replace the Individual Master File for managing 
taxpayer accounts. Since then, the agency has spent more than $1 
billion on the project, but has only completed one phase, has 
significantly scaled back other phases, and has delayed CADE 2's 
estimated completion date. In light of the challenges posed by this 
project, please describe what steps the IRS will take to ensure the 
CADE 2 project is managed effectively so it is completed on time and on 
budget.

    Answer. During my confirmation hearing, I stated that modernizing 
the IRS information technology will be one of my priorities. If 
confirmed, I will examine existing IT modernization efforts to ensure 
that they are both efficient and effective.

    Question. On April 17, 2018, the IRS's information technology (IT) 
system crashed and halted the processing of millions of returns, 
causing significant problems for taxpayers filing their returns. The 
IRS faces significant IT challenges. The Government Accountability 
Office (GAO) identified the Individual Master File, the data source for 
managing individual taxpayer accounts, as one of the oldest IT systems 
used by the Federal Government and noted that it is written in assembly 
language code--a low-level computer code that was initially used in the 
1950s. Assembly language code is difficult to write and maintain, and 
many of the programmers trained in using this language are retiring. 
There are concerns of increased risks of a catastrophic IT systems 
failure as the system continues to age and as programmers with the 
required skills are no longer available. Given these challenges, what 
steps would the IRS take to manage and mitigate these risks?

    Answer. If confirmed, I will work to ensure that risk management--
including having appropriately trained personnel--is a central part of 
the IRS effort to modernize its IT system.

    Question. Tax-exempt organizations are attempting to comply with 
two new provisions enacted as part of the Tax Cuts and Jobs Act. Both 
of these deal with unrelated business income tax (UBIT).

          IRC section 512(a)(6)--Directs nonprofits ``with more than 
        one unrelated trade or business'' to compute their unrelated 
        business income (and related losses) earned ``separately with 
        respect to each such trade or business.'' However, there isn't 
        any definition about what constitutes a ``separate'' trade or 
        business, creating uncertainty about how to document, compute, 
        report and pay the tax.

          IRC section 512(a)(7)--Imposes a new tax on expenses 
        nonprofits incur for their employees' transportation and 
        parking.

    Does Treasury and the IRS plan to issue guidance about applying 
these two subsections, so that tax-exempt filers will have clarity how 
to comply with these changes?

    Answer. It is important that all taxpayers and nonprofits have the 
information and guidance they need to file their returns in the coming 
filing season. If confirmed, I will work to ensure that clear guidance 
is issued in a timely manner.

                                 ______
                                 
                 Questions Submitted by Hon. John Thune
    Question. The IRS has been pursuing an initiative to improve 
taxpayer service with a particular emphasis on electronic services. I 
believe the expansion of e-services can lead to better taxpayer service 
if it is implemented strategically and with a careful focus on 
protecting taxpayer data. One concern I have in this area, however, is 
how it will affect taxpayers in rural parts of the country, like much 
of my State of South Dakota. In these areas where Internet access often 
is more limited, taxpayers are less likely to have access and the 
experience with online accounts and other electronic tools to make the 
IRS e-services successful. If you are confirmed, may I have your 
assurance that you will keep these rural taxpayers in mind as the IRS 
builds its e-services and ensure that they still have easy access to 
IRS services through more traditional means like telephone and walk-in 
assistance options?

    Answer. The IRS needs to provide various service options, including 
electronic services, which meet taxpayer needs while protecting 
taxpayer data. I also recognize that there will always be taxpayers who 
do not have access to digital services, or simply prefer not to conduct 
their transactions with the IRS online. If confirmed, I work to ensure 
that taxpayers continue to have access to the IRS through traditional 
means. I can assure you that I will keep the needs of rural taxpayers 
in mind.

    Question. The IRS has gone through a number of controversies in 
recent years, in particular the controversy in the last administration 
surrounding approval of section 501(c)(4) organizations. Do you see 
your nomination as an opportunity to put that part of the agency's past 
behind us and refocus the agency on its mission of collecting the 
Nation's revenues and providing taxpayers with top-quality service? If 
so, how would you go about making that happen, if you are confirmed?

    Answer. As I have discussed with the committee, if I am privileged 
to serve as Commissioner, my overriding goal will be to strengthen and 
rebuild trust between the IRS, the American people, and their 
representatives in Congress. Demonstrating that the IRS will treat all 
taxpayers and organizations fairly and equally is central to achieving 
this goal.

    Question. We had an unfortunate systems failure on tax day this 
year that prevented many individuals from completing their tax-return 
filings and required the Acting Commissioner to extend the due date by 
a day. We understand that a key part of the IRS's recent 5-year plan is 
to modernize its information-technology systems, some parts of which 
date back to the Kennedy administration. May I have your commitment 
that you will make the comprehensive overhaul of the IRS return-
processing and other IT systems a priority for your tenure as 
Commissioner, if you are confirmed?

    Answer. As I have discussed with the committee, if I am confirmed, 
modernizing the IRS's IT systems will be a priority, and I look forward 
to thoroughly reviewing the 5-year plan. I look forward to working with 
Congress on this effort

    Question. It has now been almost 20 years since the IRS 
restructured its operations into organizational units based on 
particular groups of taxpayers with similar needs, as directed in the 
Internal Revenue Service Restructuring and Reform Act of 1998. A lot 
has happened in those 20 years for individual taxpayers, small 
businesses and the self-employed, as well as large domestic and 
international businesses in this country. From your perspective as a 
tax practitioner, is it still optimal to have the IRS's structure 
focused around taxpayers with similar needs, rather than geographic 
areas, which was the case prior to the 1998 Act? Are there changes--big 
or small--that we should consider to improve taxpayer service and 
support the IRS ability to collect Federal revenues?

    Answer. I have seen firsthand the impact that changes in the 
structure of the IRS has on taxpayers. If confirmed, I will examine 
whether changes in the structure of the IRS would help improve taxpayer 
service and increase compliance. I look forward to working with the 
committee on this issue.

                                 ______
                                 
                Questions Submitted by Hon. Rob Portman
                  improving retirement plan compliance
    Question. During my time in Congress, I've been supportive of 
expanding the ability to save for retirement by encouraging small 
businesses to adopt employer-
sponsored retirement plans for their employees. In many circumstances, 
compliance with tax laws serves as a barrier to entry or an opportunity 
for clerical errors, especially for small businesses sponsoring plans. 
These small businesses should feel confident in their ability to 
correct these mistakes in a timely way at a reasonable cost, through 
simple and clear procedures.

    The IRS can greatly improve these procedures by expanding the self-
correction program within the Employee Plan Compliance Resolution 
System (EPCRS), which will enable businesses with retirement plans to 
more easily correct common mistakes. Congress directed the IRS to do 
this 12 years ago but much more needs to be done to fully implement our 
directive.

    Please describe the ways in which an expansion of the IRS's 
retirement plan self-correction program could help ease the burden on 
small business sponsoring retirement plans due to increased fees. Do 
you think that an expansion of this program could improve retirement 
plan compliance? What policy concerns would you have with a potential 
expansion of the retirement plan self-correction program, if any?

    Answer. I agree with you that this is an important issue. We need 
to do everything we can help to help businesses that want to provide 
retirement plans for their employees. If confirmed as Commissioner, I 
will examine the steps that the IRS has taken to implement retirement 
plan self-correction program to date as well as potential additional 
steps that could help the program operate more effectively. I look 
forward to working with the committee on this issue.

    The IRS could streamline the Voluntary Compliance Program (VCP) 
within EPCRS to improve these procedures. Streamlining VCP processing 
is beneficial for small businesses that are waiting on an answer from 
the IRS that their retirement plan is in full compliance. Streamlined 
processing should also lead to decreased costs for the IRS to operate 
the program.

    Question. Please provide an update if and when the Voluntary 
Compliance Program will be streamlined. If as a result of the 
streamlining the time to process submissions is decreased, will the IRS 
commit to immediately revising the user fees to reflect the lower costs 
rather than over charging plan sponsors until the next biennial review?

    Answer. If I am confirmed, I will examine the possibility of 
streamlining the Voluntary Compliance Program (VCP) within EPCRS and 
review the user fees. I look forward to working with the committee on 
this issue.
      notice 2017-10 and effect on historic preservation easements
    Question. Congress has traditionally supported the conservation of 
open space and preservation of historic structures, dating back to the 
Tax Reform Act of 1976. Since then, these programs have evolved as 
taxpayers, the IRS, and Congress have identified issues and implemented 
solutions to more effectively achieve their intended policy goals as 
well as curtail real and perceived abuses. Most recently, the IRS 
published IRS Notice 2017-10, which identifies certain syndicated 
conservation easements transactions as listed transactions. To my 
knowledge, this guidance was published without the opportunity for 
public comment or congressional input.

    I understand that the potential for abuse within the conservation 
easement program is a serious and constant concern for the IRS. I share 
this concern with the IRS, but I am also troubled as to why the public 
was not given an opportunity to comment on this process.

    I understand this took place before your time, but would you be 
willing to share the rationale as to why IRS did not allow for a public 
comment period before issuing Notice 2017-10?

    Given that syndication is a common part of financing commercial 
real estate projects and, moreover, that most historic preservation 
easements concerning commercial real estate must comply with more 
stringent regulations, restrictions, and reporting requirements through 
the historic tax credit program, would you be supportive of reexamining 
the impact of IRS Notice 2017-10 on historic preservation easement 
transactions?

    Furthermore, if it can be determined that the guard rails imposed 
on historic preservation easement transactions are sufficient to 
prevent abuse on their own, would you be open to removing historic 
preservation easement transactions from IRS Notice 2017-10?

    Answer. If confirmed, I will discuss with IRS Chief Counsel and the 
Treasury Department the rationale and basis for the transactions 
described in Notice 2017-10. I look forward to working with the 
committee on this issue.

                                 ______
                                 
                 Questions Submitted by Hon. Tim Scott
      notice 2017-10 and effect on historic preservation easements
    Question. Both parties within Congress have consistently supported 
the preservation of open space and historic structures since the 1970s. 
The programs have evolved and changed as taxpayers, the IRS and other 
government departments identified shortcomings in the regulatory scheme 
and worked together to respond to perceived abuses. In 2016, the IRS 
acted unilaterally and published IRS Notice 2017-10. Notice 2017-10 
makes certain preservation easements listed transactions when they are 
part of a syndication. I understand that there are abuses within the 
preservation easement program and something should be done. However, 
how is it possible that Notice 2017-10, guidance that significantly 
undermines congressional intent, be issued without any public comment? 
Would you be willing to allow modification of Notice 2017-10 based on 
public comments?

    Answer. If confirmed, I will discuss with IRS Chief Counsel and the 
Treasury Department the rationale and basis for the transactions 
described in Notice 2017-10. I look forward to working with the 
committee on this issue.

    Question. Real estate projects have traditionally raised capital 
through syndications. Given that syndication is a common part of 
financing commercial real estate and most historic preservation 
easements concern commercial real estate coupled with the fact that 
historic preservation easements have greater regulations, restrictions 
and reporting requirements imposed on them through the Internal Revenue 
Code, Treasury, and the National Park Service, would you be supportive 
of removing historic preservation easement transactions from IRS Notice 
2017-10?

    Answer. As noted above, if confirmed, I will examine the rationale 
and basis for the transactions described in Notice 2017-10. I look 
forward to working with the committee on this issue.
                         taxpayers and the irs
    Question. Currently, there is an active bill in the House to 
modernize and improve the IRS. Do you support the concepts of an 
Independent Appeals Process and Sensible Enforcement? If so, should 
this bill become law, would you support the application of this law to 
all audits and IRS appeals currently in process?

    Answer. As I stated during my confirmation hearing, I support an 
independent appeals process. If confirmed, I look forward to ensuring 
that the IRS works with the committee to provide technical feedback on 
pending legislation.

    Question. Dealing with the IRS can be very expensive and 
frustrating. Many taxpayers, both large and small, feel they have 
little choice but to pay the tax, interest, and penalties because of 
the cost to challenge the findings of an audit. These taxpayers also 
believe that some IRS professionals use this as leverage as there is no 
cost or consequence to the IRS professionals who do so. What process 
exists, currently, for a taxpayer who believes it is being treated 
unfairly by an IRS professional or professionals?

    Answer. The IRS has an independent appeals process for taxpayers to 
settle tax disagreements without having to go to court. Taxpayers also 
can seek the services of the Office of the National Taxpayer Advocate, 
whose job is to ensure that every taxpayer is treated fairly and has a 
process for taxpayers to report those issues. In addition, the Treasury 
Inspector General for Tax Administration reviews and intervenes in 
cases of taxpayer mistreatment. If confirmed, I will work to ensure the 
IRS treats all taxpayers impartially and informs taxpayers of the 
options available to them if they believe that they have been 
mistreated.

    Question. In some cases, tax incentive programs created by Congress 
to achieve important public policy goals are severely underutilized 
because of taxpayer fear of IRS retribution. What will you do to more 
closely align IRS guidance and enforcement with congressional intent?

    Answer. It is the job of the IRS to efficiently implement that laws 
passed by Congress in an impartial and nonbiased manner. If confirmed, 
I look forward to working with the committee to ensure IRS guidance and 
enforcement are aligned with congressional intent.

    Question. What are your thoughts on the mission of the IRS? Is it 
to effectively act as a department of revenue and collect as much tax 
as possible? Or is it to enforce the laws Congress has passed so that 
each taxpayer pays their fair share without any personal or 
institutional IRS bias?

    Answer. It is the responsibility of the IRS to efficiently 
implement laws passed by Congress in an impartial manner.
                              irs guidance
    Question. Congress enacted section 179D(d)(4) to encourage the 
private sector to design more energy-efficient government buildings. 
The statute is very clear. However, some government entities are 
abusing their role in administering the incentive by inappropriately 
seeking payment in exchange for the allocation of the deduction. It is 
important that the IRS issue strong guidance that confirms the intent 
of Congress and directs government entities they cannot seek or accept 
payment in exchange for providing a designer an allocation under 
section 179D(d)(4). I ask for your views on this matter now, and your 
willingness to have the IRS provide guidance promptly upon your 
confirmation.''

    Answer. If confirmed, I examine this issue and will work to ensure 
the IRS provides clear, concise, and timely guidance, as appropriate.

                                 ______
                                 
                 Questions Submitted by Hon. Ron Wyden
                        preventing tax avoidance
    Question. Mr. Rettig, during your 35-year career as a tax 
controversy lawyer, you have defended many wealthy individuals. Your 
firm even describes specific services for ``high net worth individuals 
and their closely held entities,'' noting that ``if you may be 
subjected to a Wealth Squad examination, we can help.'' The ``Wealth 
Squad'' refers to the global High Wealth Industry group of the IRS 
Large Business and International division. In a 2007 article in the 
Journal of Tax Practice and Procedure, you expressed concern over IRS 
procedures related to listed transactions--transactions the IRS has 
highlighted as potentially abusive and specifically designed for tax 
avoidance.\1\
---------------------------------------------------------------------------
    \1\ Kathryn Keneally, Charles P. Rettig, ``IRS Enforcement: The 
Pendulum Has Swung Too Far,'' Journal of Tax Practice and Procedure at 
19-22, April-May 2007.

    During meetings with members of the Finance Committee, and during 
your nomination hearing, you noted a desire to rebuild trust and faith 
---------------------------------------------------------------------------
in the IRS for the ``everyday guy'' and ``the guy on the street.''

    The new Republican law did little to simplify existing law and 
added new opportunities for tax planning and tax avoidance. The new 
passthrough deduction is just one example of new areas of complexity 
created by the new tax law. Without guidance from the IRS, small 
business owners will struggle to accurately determine what they owe, 
and bad actors will be able to abuse the system and avoid paying their 
fair share.

    Given your professional history, how can regular taxpayers--those 
without high-priced accountants and tax attorneys--have faith that you 
are acting in their interests, and not in the interests of your former, 
wealthy clients?

    Answer. Through decades of experience working with the IRS, I have 
seen the difficulties faced by taxpayers of all kinds-- from large 
taxpayers, to small businesses, to low income taxpayers. I've also 
devoted a significant amount of time to assisting taxpayers who can't 
afford professional help on a pro bono basis.

    Question. In your meetings with members and staff prior to your 
nomination hearing, you noted that high-profile tax enforcement actions 
can raise awareness and potentially increase tax compliance. However, 
in your 2007 article, you bemoan IRS officials who have ``trumpeted the 
success of collecting tax liabilities and penalties in connection with 
so-called abusive tax shelters.'' How are members of the committee 
supposed to reconcile your more recent statements, made in connection 
with your nomination, with your past professional writings and actions?

    Answer. I believe that every taxpayer, high-profile or not, has the 
right to be treated impartially by the IRS. If confirmed, I will work 
to ensure that this is the case.

    Question. Given the ripe opportunities for tax planning created 
under the new Republican tax law, as Commissioner, how would you combat 
aggressive tax planners? How would you continue to monitor tax-
avoidance strategies over the next few years as the law is implemented?

    Answer. The IRS has a responsibility to enforce all tax laws in an 
impartial and unbiased manner. If confirmed, I will review the IRS's 
approach to enforcement to ensure it reflects this responsibility.

    Question. What kind of message would it send if the IRS failed to 
go after a high-level government official if there were credible 
allegations that the official had failed to comply with the tax laws? 
Wouldn't that do serious damage to our voluntary tax compliance system, 
especially if there were evidence the violations were knowing or 
willful?

    Answer. The IRS has a responsibility to enforce all tax laws in a 
fair and unbiased manner. If confirmed, I will work to ensure that the 
IRS treats all taxpayers equally under the law.

    Question. If career IRS officials come to you recommending 
enforcement action against an administration official, how would you 
handle the situation?

    Answer. It is my understanding that the Commissioner does not get 
involved in individual taxpayer matters--including enforcement actions, 
If confirmed, I will work to ensure that the IRS treats all taxpayers 
equally under the law.

    Question. What would you do if administration officials at the 
Treasury Department or elsewhere in the administration urged you not to 
pursue an enforcement case?

    Answer. It is unlawful for the President, Vice President, or any 
employee of the Executive Office of the President or Vice President to 
request directly or indirectly any officer or employee to conduct or 
terminate an audit or other investigation of any particular taxpayer. 
If confirmed, I will work to ensure that the law is upheld and 
appropriate steps are taken if it is violated.
                          taxpayer assistance
    Question. Many provisions of the new tax law are complicated and 
confusing, especially for small business owners. I have been pressing 
Acting Commissioner David Kautter to provide guidance for these 
taxpayers, but, to date, little guidance has been issued.

    In the hearing, you mentioned the need for clear, timely guidance. 
How will you make sure taxpayers, in particular those who cannot afford 
to hire the top tax consultants, receive clear guidance in a timely 
manner?

    Answer. If confirmed, I will work to ensure guidance is clear and 
consistent, and available to all taxpayers in a timely manner.

    Question. Do you think it is important for IRS to conduct greater 
outreach to traditionally underserved groups like low-income families 
and immigrant communities? If so, can you tell us how you would improve 
IRS outreach efforts?

    Answer. If confirmed, I look forward to reviewing the IRS's current 
outreach channels and exploring new ways to deliver information and 
strengthen outreach, including in underserved communities.
                   conservation easement syndication
    Question. Mr. Rettig, on March 29, 2017, I wrote to IRS 
Commissioner John Koskinen about the growth in abusive tax shelters 
involving the syndication of conservation easements. I asked the IRS to 
provide a report on the nature and scope of this problem. On July 13, 
2017, the IRS provided a partial response that revealed participants in 
these syndication deals claimed deductions that were nine times the 
amount of their original investment. Subsequent preliminary responses 
indicate IRS may have lost billions of dollars to this tax shelter in 
hundreds of tax shelter transactions.

    The Treasury Department issued Notice 2017-10, identifying these 
syndication transactions as abusive tax shelters and requiring 
participants to disclose their involvement to the IRS. The notice was 
also intended to deter future deals; however, media reports suggest 
these deals are still taking place.\2\
---------------------------------------------------------------------------
    \2\ Peter Elkind, ``The Billion-Dollar Loophole,'' ProPublica, 
December 20, 2017.

    Historically, when the Treasury Department and IRS issue a Notice 
``listing'' a certain transaction as an abusive tax shelter, the 
promotion and use of such schemes stops. Are you concerned by the 
apparent continued use of these tax avoidance techniques? Please 
describe what actions you would take as Commissioner, if confirmed, 
against the promoters of these abusive shelters identified in Notice 
---------------------------------------------------------------------------
2017-10.

    Answer. If confirmed, I will work with IRS officials to ensure an 
appropriate enforcement strategy is in place to uphold the law as 
Congress intended.

    Question. Enforcement actions against illegal syndicated 
conservation easement tax shelter transactions have proven challenging 
and time-consuming for the IRS. For example, earlier this year the Tax 
Court issued a ruling disallowing tax write-offs from a sham 
conservation easement transaction that occurred more than a decade 
ago.\3\ While Notice 2017-10 may have extended the statute of 
limitations period for certain transitions, the time in which IRS can 
take enforcement actions on those tax shelter transactions grows 
shorter by the day. If confirmed, will you commit to developing and 
carrying out a strategy to ensure that promoters of syndicated 
conservation easement tax shelter transactions are held accountable 
before the close of the statute of limitations?
---------------------------------------------------------------------------
    \3\ T.C. Memo. 2018-45.

    Answer. As noted above, if confirmed, I will work with IRS 
officials to ensure an appropriate enforcement strategy is in place to 
---------------------------------------------------------------------------
uphold the law as Congress intended.

    Question. Do you believe the IRS currently has the tools needed to 
put an end to this abuse? If confirmed, will you recommend regulatory 
or statutory changes to address these abuses if Notice 2017-10 and 
other tools are shown to be insufficient to curb the use of these tax 
shelters?

    Answer. If confirmed, I will assess the situation and work with 
Congress to ensure the IRS has adequate tools to complete its mission 
and uphold the law.

    Question. If confirmed as Commissioner, how high of a priority will 
you place on stemming this abuse?

    Answer. If confirmed, I will discuss with IRS Chief Counsel and the 
Treasury Department the rationale and basis for the transactions 
described in Notice 2017-10. I look forward to working with the 
committee on this issue.

    Question. Do you believe the transactions described in Notice 2017-
10 are abusive on their face?

    Answer. I do not currently have access to the information that 
served as the basis for the decision by the Treasury Department and IRS 
to list these transactions.

    Question. If confirmed, what actions will you take to ensure IRS 
challenges the tax benefits of each and every transaction covered by 
Notice 2017-10?

    Answer. If confirmed, I will work to ensure an appropriate 
enforcement strategy is in place.

    Question. If confirmed, will you support Notice 2017-10?

    Answer. As I have noted, if confirmed, I will discuss with IRS 
Chief Counsel and the Treasury Department the rationale and basis for 
the transactions described in Notice 2017-10. I look forward to working 
with the committee on this issue.

                                 ______
                                 
               Questions Submitted by Hon. Maria Cantwell
                           irs administration
    Question. Mr. Rettig, in contrast to the small law firm where you 
have worked for over 35 years, the Internal Revenue Service is a multi-
billion-dollar agency with a workforce of nearly 77,000. You have built 
your practice on representing taxpayers and companies who have disputes 
with the IRS and have served on many boards and advisory committees 
advising the IRS and the California Franchise Board. Yet, you do not 
have the managerial background and expertise running a large 
organization like the IRS. Mark Mazur, former Assistant Secretary of 
Tax Policy, has noted that the IRS is more like a large company that 
processes information, collects bills, and maintains accounts.\4\
---------------------------------------------------------------------------
    \4\ James Rufus Koren, ``The Beverly Hills attorney set to lead the 
IRS likes magic tricks--he'll need a few to run the agency.'' The Los 
Angeles Times, February 13, 2018, http://www.la
times.com/business/la-fi-charles-rettig-irs-20180213-story.html.

    The IRS is about to undertake the largest regulatory project in a 
generation to put in place the regulations for the recently passed 
---------------------------------------------------------------------------
$1.5-trillion tax bill.

    What assurances can you give this committee that you will be able 
to handle this enormous management task?

    Answer. In my career, I have worked with IRS employees at every 
level of the Service. If confirmed, I will work to earn their respect 
and lead the IRS in taking on the range of challenges it faces, 
including implementing the tax reform law.

                               timeliness
    Question. I am concerned about the ability of the IRS to provide 
taxpayers with timely guidance. For example, the solar industry had to 
wait 2\1/2\ years for guidance from the 2015 tax bill.

    What assurances can you give to individuals and small businesses 
that they will have the guidance needed to file their taxes?

    Answer. If confirmed, I will ensure that the IRS works with 
Treasury and others involved--including Congress--to issue guidance in 
a timely manner.

    Question. What backup plan do you have if the IRS is not able to 
meet its goal?

    Answer. If confirmed, I will assess progress made in issuing 
guidance to date and work to ensure taxpayers have the clarity they 
need to file.
                         offshore tax shelters
    Question. Much has been written about your private-sector 
experience with the work you have done on behalf of your clients 
related to offshore bank accounts.

    How can you put your past experience to work for the American tax 
payers to crack down on hidden offshore bank accounts and tax 
avoidance?

    Answer. In my professional career, I have not been involved in 
creating tax avoidance schemes. If confirmed, I would familiarize 
myself with the ongoing work the IRS is undertaking in this area and 
ensure the IRS implements the law in an impartial manner.

                                 ______
                                 
                Questions Submitted by Hon. Bill Nelson
    Question. I understand that the number of tax-related identity 
theft cases has declined in recent years, but criminals now have more 
information on us than ever before--with all the data breaches and 
privacy lapses that's occurred in recent years. What do you plan to do 
to stay on top of this crime and protect Americans from identity theft 
abuse or other scams, as criminals become increasingly sophisticated?

    Answer. If I am confirmed, the IRS will remain vigilant in this 
area and work to expand its efforts. The IRS has made great progress in 
the battle against identity theft. If confirmed as Commissioner, I will 
work to ensure that the IRS remains a leader in this fight.

    Question. Last year, I introduced the Identity Theft and Tax Fraud 
Prevention Act (S. 606), which grants the Treasury Department authority 
to oversee paid tax preparers, among other reforms to protect taxpayers 
from tax-related identity theft. Unfortunately, the paid tax preparer 
provision is considered controversial by some Members of Congress. The 
provision, Section 115 of the bill, provides the following:

SEC. 115.  MINIMUM STANDARDS FOR PROFESSIONAL TAX PREPARERS.

      (a) In General.--Subsection (a) of section 330 of title 31, 
        United States Code, is amended--

      (1) by striking paragraph (1) and inserting the following:

      ``(1) establish minimum standards regulating--

        ``(A) the practice of representatives of persons before the 
            Department of the Treasury; and

        ``(B) the practice of tax return preparers; and'', and

      (2) in paragraph (2)--

        (A) by inserting ``or tax return preparer'' after 
            ``representative'' each place it appears, and

        (B) by inserting ``or in preparing their tax returns, claims 
            for refund, or documents in connection with tax returns or 
            claims for refund'' after ``cases'' in subparagraph (D).

      (b) Authority To Sanction Regulated Tax Return Preparers.--
        Subsection (b) of section 330 of title 31, United States Code, 
        is amended--

      (1) by striking ``before the Department'',

      (2) by inserting ``or tax return preparer'' after 
        ``representative'' each place it appears, and

      (3) in paragraph (4), by striking ``misleads or threatens'' and 
        all that follows and inserting ``misleads or threatens--

        ``(A) any person being represented or any prospective person 
            being represented; or

        ``(B) any person or prospective person whose tax return, claim 
            for refund, or document in connection with a tax return or 
            claim for refund, is being or may be prepared.''.

      (c) Tax Return Preparer Defined.--Section 330 of title 31, United 
        States Code, is amended by adding at the end the following new 
        subsection:

      ``(e) Tax Return Preparer.--For purposes of this section--

      ``(1) In general.--The term `tax return preparer' has the meaning 
        given such term under section 7701(a)(36) of the Internal 
        Revenue Code of 1986.

      ``(2) Tax return.--The term `tax return' has the meaning given to 
        the term `return' under section 6696(e)(1) of the Internal 
        Revenue Code of 1986.

      ``(3) Claim for refund.--The term `claim for refund' has the 
        meaning given such term under section 6696(e)(2) of such 
        Code.''.

    Do you believe this provision is a reasonable solution to the 
problem of fraudulent or incompetent paid tax preparers? If not, please 
explain why not and suggest changes to the text to address any concerns 
you may have about the provision.

    Answer. People who prepare tax returns on behalf of others should 
be capable, competent, and knowledgeable of the tax laws covering the 
tax returns they are completing. I understand the administration has 
included a legislative proposal with the FY 2019 Budget Request to give 
the IRS the statutory authority to require minimum standards for paid 
tax return preparers. If I am confirmed, I will ensure the IRS provides 
appropriate technical feedback on such legislative proposals.

    Question. How will you work to ensure Public Law 115-97 will not be 
used by corporations to deceptively shift profits abroad?

    Answer. If confirmed as Commissioner, I will ensure the IRS works 
to implement clear guidance and will work to ensure that the IRS has an 
effective enforcement strategy.

    Question. How do you plan to combat tax avoidance schemes, 
particularly estate planning techniques that abuse ambiguous parts of 
the tax code?

    Answer. If confirmed as Commissioner, my job will be to uphold the 
law. Through the years, there have been many maneuvers and schemes to 
improperly evade taxes. An important job of the IRS is to watch for 
these schemes and take appropriate action to protect our Nation's tax 
system.

    Question. Do you hold any sympathies with individuals who hide 
income in offshore bank accounts to avoid taxes? If so, please explain.

    Answer. If I am confirmed, my role will be to ensure that IRS 
upholds the law. Taxpayers have an obligation to follow the law, 
regardless of whether they have income onshore or offshore.

    Question. Do you believe your ownership of two rental units in the 
Waikiki Trump International Hotel and Tower could compromise your 
ability to fairly administer the tax laws free of any influence from 
the President? If not, do you pledge to notify both the chair and 
ranking member of the Senate Finance Committee if the President asks 
you to do anything that would undermine the integrity or functioning of 
the IRS?

    Answer. No. As I said during the hearing, if confirmed, I pledge 
ensure that the IRS operates in an impartial, unbiased manner from top 
to bottom.

                                 ______
                                 
              Questions Submitted by Hon. Robert Menendez
                               free file
    Question. Mr. Rettig, the IRS since 2002 has been in a public-
private partnership with the tax industry which provides free tax 
returns and electronic filing for the lowest 70 percent of the U.S. 
taxpayer population. Do you support continuing this program?

    Answer. I support the Free File program, which has helped millions 
of taxpayers file their tax returns for free since the program's 
creation. I support continuing the program.
  identity theft refund fraud information sharing and analysis center
    Question. Mr. Rettig, one of the key accomplishments of the past 
few years is the creation of the Identity Theft Refund Fraud 
Information Sharing and Analysis Center (IDTTRF-ISAC). This allows IRS, 
State Departments of Revenue and companies in the tax and banking area 
to collect and analyze information under MITRE regarding identity theft 
fraud. Do you intend to support this initiative and its funding?

    Answer. The IRS has made great progress in the battle against tax-
related identity theft during the last several years following the work 
of the Security Summit and the subsequent creation of the Information 
Sharing and Analysis Center (ISAC). This collaborative effort among the 
IRS, States, and the Nation's private-sector tax community is working. 
If confirmed as Commissioner, I will work to ensure the continued 
success of the Summit partnership and the ISAC and provide appropriate 
resources.

                                 ______
                                 
             Question Submitted by Hon. Benjamin L. Cardin
    Question. As we discussed during your hearing, I am very interested 
in pursuing tax administration improvements across various issues. One 
of the most important is retirement.

    Compliance with the tax laws when businesses sponsor a retirement 
plan can be challenging due to the complex rules that govern the 
operation of these plans. Especially for small businesses, this can 
lead to many opportunities for foot faults. Businesses need to have the 
ability to correct these mistakes in a timely way at a reasonable cost, 
through simple and clear procedures.

    The IRS can help with this issue by expanding the self-correction 
program within the Employee Plan Compliance Resolution System (EPCRS), 
which will enable businesses with retirement plans to more easily 
correct common mistakes. Congress directed the IRS to do this 12 years 
ago in the Pension Protection Act of 2006, which directed Treasury to 
update and improve EPCRS, giving special attention to, among other 
things, the concerns of small employers. Much more needs to be done to 
fully implement that directive.

    Will you commit to promptly expand IRS's retirement plan self-
correction program in order to improve retirement plan compliance and 
protect participating employees?

    Answer. I agree that this is an important issue. We need to do 
everything we can to enable businesses that want to provide retirement 
plans for their employees. If confirmed as Commissioner, I will examine 
the steps that the IRS has taken to implement retirement plan self-
correction program to date as well as additional steps that could help 
the program operate more effectively. I look forward to working with 
the committee on this issue.

                                 ______
                                 
               Questions Submitted by Hon. Sherrod Brown
    Question. Regarding conservation easements, given your extensive 
background with the tax code, can you describe how you see conservation 
easements and historic tax credits intersecting? In 2016, the IRS 
published Notice 2017-10, which attempted to curtail certain practices 
regarding conservation easements. Do you have any thoughts on the 
review process already required of historic tax credits, and do you 
think that is a sufficient process for reviewing projects that also 
utilize credits like conservation easements?

    Answer. If confirmed, I will discuss with IRS Chief Counsel and the 
Treasury Department the rationale and basis for the transactions 
described in Notice 2017-10. I look forward to working with the 
committee on this issue.

    Question. In recent years, we've seen trend of for-profit colleges 
converting to non-profits that still lead to financial gain by their 
former owners. How would the IRS enhance scrutiny of these tax 
structures under your leadership? How would you suggest the IRS improve 
upon coordination with the Department of Education when evaluating 
these conversions?

    Answer. If confirmed, I will review and assess this situation and 
ensure appropriate coordination takes place.

                                 ______
                                 
             Questions Submitted by Hon. Michael F. Bennet
    Question. By keeping the IRS free from political influence, we can 
strengthen its stability and credibility.

    Do you agree that the IRS's work to administer and enforce the tax 
code should be free from political interference (even if a company or 
individual affiliated with President Trump, his close associates, or 
family members is involved)?

    Would you commit to notifying me and the bipartisan membership of 
the Finance Committee in writing if inappropriate political 
interference occurs, from the White House, Main Treasury, or otherwise?

    Answer. As I have discussed with the committee, if I am privileged 
to serve as Commissioner, my overriding goal will be to strengthen and 
rebuild trust between the IRS, the American people, and their 
representatives in Congress. Treating all taxpayers and organizations 
fairly and equally is central to achieving this goal. In addition, it 
is unlawful for the President, Vice President, or any employee of the 
Executive Office of the President or Vice President to take certain 
actions with respect to the operation of the IRS. If confirmed, I will 
work to ensure that the law is upheld and appropriate steps are taken 
if it is violated.

    Question. The administration requested $11.1 billion in 
discretionary appropriations for the IRS for 2019, down from the 2018 
budget and down even further from its funding level in FY2010. In 
December 2017, the President signed into law tax legislation that 
contains substantial revisions to the Internal Revenue Code that the 
IRS is responsible for administering.

    Do you believe the current funding levels are adequate to meet the 
implementation challenges of the tax law and to appropriately address 
taxpayer needs?

    Answer. If confirmed, one of my top priorities would be to ensure 
the IRS has the resources it needs and uses those resources as 
effectively as possible.

    Question. A September 2017 Inspector General audit noted that 64 
percent of the IRS's IT hardware infrastructure is beyond its useful 
life. The IRS estimates that the current replacement cost for this IT 
equipment is approximately $430 million. However, the administration 
only requested $110 million for IT modernization efforts in its budget, 
about one-fourth of that estimate.

    From your perspective as a practitioner who deals with the IRS, how 
does this IT underfunding affect efforts to increase efficiency and 
security of the agency?

    Will improving IT infrastructure be a priority for you?

    Answer. Modernizing the IRS's IT systems and bringing the IRS's IT 
systems into the 21st century is one of my top goals. Modernization 
serves three purposes: it protects taxpayer data, it enhances services 
provided to taxpayers, and it preserves the IRS's ability to collect 
the taxes that fund the government.

    Question. Do you have a sense of how you will fill your role as IRS 
Commissioner and what your priorities are for the agency?

    Answer. As I have discussed with the committee, if I am privileged 
to serve as Commissioner, my overriding goal will be to strengthen and 
rebuild trust between the IRS, the American people, and their 
representatives in Congress.

    Question. Setting aside current politics, what would an ideal 
system of tax administration and tax enforcement in the United States 
look like to you and do you have a sense of how much you think it would 
cost?

    Answer. Our system of tax administration and enforcement is based 
on voluntary self-assessment. Such a system will work most effectively 
if taxpayers have the information they need to file accurate returns 
and believe the IRS will enforce the tax code effectively and without 
bias. Implementing such a system will require more than resources, it 
will mean building trust in the IRS.

    Question. IRS estimates that individuals attempted at least $14.5 
billion in identity theft tax refund fraud in tax year 2015. Starting 
with its March 2015 Security Summit, IRS has partnered with State tax 
administrators and tax preparation companies, among others, on 
initiatives aimed at better preventing and detecting identity theft 
(IDT) refund fraud.

    How do you plan to continue preventing identity theft and tax 
refund fraud?

    Answer. The IRS has made some incredible progress in the battle 
against tax-
related identity theft through the Security Summit effort. This 
unprecedented partnership among the IRS, the States and the Nation's 
tax community is working. I understand the number of tax-related 
identity theft victims has fallen dramatically. I plan to continue this 
important work of the Security Summit. To complement this, I will 
continue to strengthen IRS's efforts in order to make it harder for 
identity thieves to successfully masquerade as taxpayers and file 
fraudulent refund claims on behalf of taxpayers.

    How do you think about the balance of responsibilities between 
taxpayer services and enforcement, and how does the role of the 
criminal investigations division play into this?

    Answer. To be effective the IRS needs to balance between taxpayer 
services and tax enforcement. The IRS must do everything it can to help 
people meet their tax responsibilities. At the same time, some people 
will not comply. That is why the IRS needs an effective tax enforcement 
program that respects taxpayer rights.

    Question. In 2015, we worked to change the previous ``placed-in-
service'' standard for qualification for section 48 investment tax 
credits to a ``beginning of construction'' standard for projects 
completed by the end of 2023. Application of the beginning of 
construction standard is new to solar investment and requires Treasury 
to issue guidance to clarify the rules. Yet, nearly 3 years later, no 
guidance has been issued.

    The failure to release the pending guidance is causing considerable 
uncertainty for new solar projects--particularly utility-scale solar 
projects, which must navigate significant and time-consuming financing, 
and permitting issues and take three to 5 years to complete.

    If you're confirmed, I'd like to strongly urge you to immediately 
prioritize the issuance of this guidance for solar energy projects.

    Can you please commit, if confirmed, to getting this done as soon 
as possible, so businesses and investors have the certainty they need 
to take advantage of this important incentive?

    Answer. It is my understanding the guidance you mentioned involving 
solar energy projects and the beginning of construction date issue is 
reflected in IRS Notice 2018-59, which the IRS issued on June 19, 2018.

                                 ______
                                 
               Questions Submitted by Hon. Mark R. Warner
    Question. Mr. Rettig, should you be confirmed as IRS Commissioner, 
you will have about 70,000 Federal employees working for you. Given the 
complexity of the tax code and the importance of helping taxpayers, 
recruiting and retaining skilled employees is of utmost importance. 
Yet, this administration is going to great lengths to worsen the 
quality of Federal jobs, including at the IRS.

    The administration's proposals include cuts in retirement benefits 
and across-the-board pay freezes. In addition, a recent set of 
executive orders issued by the President attempts to dramatically 
undermine the rights and protections of Federal workers.

    How do you see cutting benefits and worsening bargaining rights 
affecting recruitment and retention of talented workers at the IRS?

    Answer. Throughout my career, I've seen first-hand the work of IRS 
employees in many different roles. The majority are committed to 
serving taxpayers. If confirmed, I will work with Congress and the 
Service's existing workforce to help build the best possible workplace 
so we can attract and retain the best people to serve the Nation's 
taxpayers.

    Question. Mr. Rettig, We know from tax data that Americans are 
consistently reporting more self-employed or independent income than 
they did 20 years ago. And whether they rely on this work for all or 
just some of their income, one of the biggest complaints I hear from 
independent and contract workers is that tracking expenses and filing 
their taxes is just too complicated. But we do not know how many people 
are using that work as extra income, how many are actually relying on 
this work as their primary source of income, and whether their tax 
challenges are the same. There are still big questions we do not have 
the answers to, and better information is going to be key to bringing 
our workforce policies in line with the employment realities of the 
21st century.

    I recently introduced legislation, S. 3097, which would direct the 
Department of Treasury to study how income has shifted between wages 
and non-employer business income over the past few years. This research 
will also look at the withholding, reporting, and filing system related 
to workers earning non-employer business income.

    It is clear we need to know more about how workers are earning non-
business income and what their income profile looks like. What do you 
believe that we could do to make their tax compliance easier and 
better?

    Answer. As you note, this issue is very important, given the 
continuing changes in the workforce. The IRS needs to focus on 
improving taxpayer service, including providing self-employed 
individuals with the information and assistance they need to accurately 
file their taxes. If confirmed, I look forward to working with the 
committee on this issue.

             Questions Submitted by Hon. Sheldon Whitehouse
    Question. The IRS plays a critical role in policing the political 
activities of nonprofit organizations organized under 501(c)(4) of the 
tax code. This role was made increasingly complex by the Citizens 
United decision, which weaponized tax-exempt 501(c)(4) organizations 
into the preferred vehicle to funnel secret dark money into our 
elections. These social welfare groups are under IRS's jurisdiction. 
The IRS should never be used as a political tool, but it also does have 
an obligation to see that groups are not abusing the tax code and 
engaging in improper political activity.

    What assurances can you give us that you will stand up to political 
pressure from Republicans and enforce the IRS's rules fairly, 
consistently, and vigorously?

    Answer. If confirmed, I will work to ensure that the IRS operates 
in an impartial, nonbiased manner from top to bottom.

    Question. At the hearing, you said that it was ``your experience'' 
that the IRS looks into inconsistent filings by taxpayers. The Pulitzer 
Prize winning organization ProPublica investigated the tax and election 
filings of 104 501(c)(4) organizations to see whether they were 
reporting consistent amounts of political spending. It found that 32 
groups reported political spending to the Federal Election Commission 
or State election commissions, but told the IRS they spent no money to 
influence elections. Both statements cannot be true. Yet, to my 
knowledge, neither the IRS nor the FEC have investigated.

    As Commissioner, do you think it is worthy of investigation if 
organizations are openly and notoriously reporting inconsistent 
information to the IRS and other regulators?

    Answer. If confirmed, I will work to ensure that the IRS implements 
the law in an impartial, nonbiased manner. In my experience, the IRS 
does take into account publicly available evidence of potential 
wrongdoing and takes action where appropriate. If confirmed, I will 
work to ensure that it continues to do so.

    Question. Should the IRS review other filings and statements a 
person has made to the IRS or other agencies to verify that the 
information regarding material matters is consistent?

    Answer. I understand the IRS has a variety of tools available to 
look into issues and determine the accuracy of information. I'm also 
aware that the IRS works with other law-enforcement agencies when 
appropriate. If confirmed, I will be a vocal advocate for the 
enforcement mechanisms of the IRS.

    Question. Section 125 of division E of the Consolidated 
Appropriations Act, 2018 prevents the IRS from issuing new guidance on 
the types of political activities 501(c)(4) organizations can and 
cannot engage in.

    Do you support think the IRS should be able to issue new 
regulations to provider greater certainty and clarity to 501(c)(4) 
organizations?

    Answer. If confirmed, I will examine relevant regulations to ensure 
they provide as much certainty and clarity as possible under the law.

    Question. Does this rider make the IRS's job more difficult?

    Answer. As I am not currently at the IRS, I do not have all the 
information needed to assess the impact of this provision.

    Question. In 2016, Congress amended the Internal Revenue Code to 
require self-declared 501(c)(4) organizations to notify the IRS of 
their existence. However, the IRS does not make these notifications 
public. As a result, there is a disparity between registered 
501(c)(4)s, which have filed publicly available Form 1024s that provide 
information on their existence and activities, and ``declared'' 
501(c)(4)s, for which there may be no public information about their 
activities or even their existence.

    Is there a public interest in making sure that all 501(c)(4) 
organizations provide public information about their existence and 
activities?

    Answer. If I am confirmed, I will work to ensure that the IRS 
implements the law as Congress intended.

    Question. Will you commit to working with Congress to address this 
disparity?

    Answer. If I am confirmed, I will work to ensure that the IRS 
provides appropriate technical feedback on potential legislation.

    Question. 26 U.S.C. Sec. 7206(1) makes it a felony punishable by up 
to 3 years of imprisonment and $100,000 in fines for a person who: 
``[w]illfully makes and subscribes any return, statement, or other 
document, which contains or is verified by a written declaration that 
it is made under the penalties of perjury, and which he does not 
believe to be true and correct as to every material matter.''

    Why is it important to ensure that taxpayers are providing accurate 
information?

    Answer. It is important that taxpayers providing accurate 
information because our tax system is based on the principle of 
voluntary self-assessment. However, the IRS has many tools available--
both civil and criminal--to take action against people who knowingly 
provide inaccurate information or otherwise abuse the system.

    My Republican colleagues have promised that Americans will be able 
to file their taxes on a postcard. Last week a draft of the postcard 
was reported in the press. The new postcard still requires taxpayers to 
fill out up to six separate schedules.

    In light of this, what does the postcard accomplish?

    Answer. I have not been involved in this effort as I am not 
currently at the IRS. If confirmed as Commissioner, I will work to 
ensure that all methods of filing minimize the burden on taxpayers.

    Question. More than 90 percent of taxpayers file their taxes 
electronically, which also makes it easier for the IRS to process. Is 
it a good idea to encourage taxpayers to go back to filing paper 
returns?

    Answer. It is important that the IRS provide taxpayers with both 
electronic and traditional means of filing.

    Question. Given that the IRS already has payroll information from 
employers, wouldn't it be easier for taxpayers if the agency sent them 
a completed tax form for their review and signature?

    Answer. The IRS does not have all the information needed to prepare 
an accurate and complete tax return; only the taxpayer does. If 
confirmed, I look forward to working with the committee to reduce the 
burden that filing puts on taxpayers as much as possible.

    Question. According to the IRS, the net tax gap, the difference 
between what people and companies owe in taxes and what the IRS 
ultimately collects exceeds $400 billion per year. This should be the 
low-hanging fruit of deficit reduction; this is money owed under the 
law. The budget request notes that an additional $15 billion for 
enforcement over 10 years will generate $44 billion in collections, 
``yielding a net savings of $29 billion.'' In other words, every dollar 
spent on enforcement brings in three.

    Do you agree that additional enforcement dollars would produce a 
positive return and help reduce the deficit?

    Answer. If confirmed, I will work to ensure the IRS maintains 
effective enforcement that respects taxpayer rights. However, 
enforcement alone will not close the ``tax gap.'' In our system of 
voluntary self-assessment, taxpayer must trust that the IRS will 
effectively enforce the tax code without bias.

    Question. Are you aware that the President's FY19 request for the 
IRS enforcement budget was nearly $1 billion lower than Congress 
appropriated for it in 2011?

    Answer. Yes.

                                 ______
                                 
                 Prepared Statement of Hon. Ron Wyden, 
                       a U.S. Senator From Oregon
    The next IRS commissioner will be in charge of administering a tax 
system that's broken in two.

    There's one set of rules for the cop on the beat or the worker on 
the factory line. Strict rules, no special loopholes, taxes come 
straight out of your paycheck.

    Then there's another set of rules for the high-flyers. Under that 
system, with the right advice from costly advisers, you can effectively 
pay what you want, when you want.

    Mr. Chuck Rettig, nominated by the President to lead the IRS, made 
a career on dispensing that advice. And the biggest policy challenge 
he'd walk into as Commissioner is implementing the extremely 
complicated Trump tax law, which did a whole lot more for the high-
flyers and well-connected than everybody else.

    Given that fact, it's up to Mr. Rettig to demonstrate that if he's 
confirmed, he'd work on behalf of all Americans, particularly hard-
working, middle-class families and the owners of the garages, corner 
stores and restaurants that make up our communities. ``The guy on the 
street,'' as he said in our meeting earlier this week.

    One of the most immediate challenges he'll inherit if he's 
confirmed is sorting out a big headache the Trump tax law has caused 
for small businesses. Months after it was enacted, small businesses 
nationwide are still struggling to figure out how the new pass-through 
deduction will affect their tax bills. This law was hyped as a way to 
simplify the code and make life easier for millions of Americans. The 
pass-through deduction is an example of where the exact opposite has 
happened.

    Mr. Rettig also needs to demonstrate that he will maintain 
independence from the Trump White House. That's important with any 
nominee, but it's especially relevant in Mr. Rettig's case, since he 
owns and rents out condos in a Trump-branded and -managed property. 
I'll have questions about that today.

    But even setting aside that financial relationship, committing to 
independence matters. This administration often seems to be making tax 
decisions for political reasons rather than policy reasons, and that's 
a recipe for the kind of swampy corruption that makes people lose faith 
in institutions like the IRS.

    For example, it appears a policy regarding tax-favored 
``Opportunity Zones'' was changed at the behest of one well-connected 
Republican donor in Nevada. It's a sign the administration has put 
itself in the business of picking economic favorites as a result of the 
tax law. This donor wanted a special accommodation, and he got it. When 
the State of Vermont sought a similar change, it was denied.

    There are also reports the Trump administration is going to 
introduce a new, untested tax form that will make the experience of 
filing returns even more of a headache for lots of Americans, 
particularly seniors. When the debate closed and the new tax law 
passed, it turned out that most Americans would not be able to file on 
a postcard, contrary to what Republicans had promised. But the 
administration decided to go ahead and cram the same amount of tax math 
onto a smaller form anyway. That means many taxpayers are going to have 
to rifle through complicated new stacks of instructions, attach 
multiple schedules and it will lead to more errors. The new forms are 
setting up taxpayers to fail.

    And finally, the Vice President said in May that the Johnson 
amendment, which bars 501(c)(3) tax-exempt organizations from 
campaigning for or against political candidates, quote, ``will no 
longer be enforced under this administration.''

    That's a longstanding right-wing priority and a recipe for even 
more dark money to infect our political system. The next IRS 
Commissioner will be in charge of enforcing that law on the books 
despite the Vice President's pledge to look the other way.

    I'll close on this. Running the IRS is a difficult job that 
involves managing tens of thousands of employees. Mr. Rettig has 
decades of experience in tax matters, but his lack of management 
experience is a concern. I'm sure he will be asked that today as well.

    I appreciate Mr. Rettig's willingness to serve, and I thank him for 
joining the committee here today. I look forward to Q&A.

                                 ______
                                 

                             Communication

                              ----------                              


                      Statement of Jeffrey M. Blum

                        7106 Meadow Ridge Drive

                       Louisville, Kentucky 40218

                        Telephone (502) 494-2889

                           fax (502) 749-2949

                           [email protected]

Introduction

    I have been representing the owners of Country Folk Art Shows, Inc. 
(``CFAS''), a fully lawful family business, since the summer of 1994. 
CFAS has been victimized by one of the first and largest improper civil 
asset forfeitures conducted by IRS agents. Approximately four million 
dollars has been unlawfully taken and despite repeated court rulings 
and a review conducted by the Deputy Attorney General (initiated by 
Attorney General Ashcroft, and conducted by Deputy Attorney General 
Corney and Associate Deputy Attorney General Catherine O'Neil), all 
directing the IRS to return the money as tax refunds, the IRS has done 
nothing but stonewall since first being directed to address refund 
claims in 2002. The extensive, well-
documented tax refund claims have repeatedly been ``lost,'' and 
inaction has been justified by saying that mere theft of assets by 
agents does not justify a tax refund until the Commissioner writes a 
letter crediting the money as tax payments. For more than a decade the 
Commissioner has been strategically unreachable; every written 
communication to him has been rerouted to IRS Criminal Investigations, 
which has responded, if at all, by saying, in the words of former Chief 
Nancy Jardini, that it has no jurisdiction over refund claims.

    Our clients' lawfully derived income, which consists of five years 
of gate receipts from Country Folk Art Shows, was initially tendered 
voluntarily to the IRS to pay off about 80% of a bona fide tax 
liability in what was termed a ``consent judgment'' of civil 
forfeiture. The IRS had a written policy at the time directing that any 
lawfully derived assets forfeited based on ``structuring'' allegations 
could only be used to pay off tax liability, or forfeiture would not be 
authorized.Because the U.S. Attorney and everyone else acknowledged the 
legality of exhibiting country folk art, the owners received oral 
assurances from the IRS that this policy would apply. Three months 
after voluntarily tendering the assets the CFAS owners were subjected 
to a bait and switch. The assets were distributed as grants to various 
government agencies and the same taxes, interest and penalties were 
assessed a second time. The Sixth Circuit Court of Appeals denied other 
avenues of redress, but held that the owners should be entitled to 
refunds once they filed properly amended refund claims. Since that time 
multiple lawsuits have been filed and the IRS has engaged in a variety 
of machinations to hide the missing assets while refusing to provide 
any lawful response to the refund claims.

    Most recently counsel for the House Government Oversight 
Subcommittee of the Ways and Means Committee has helped to enlist the 
Taxpayer Advocate Service to get the refund claims addressed in a 
lawful manner. The Taxpayer Advocate for the District of Columbia 
worked diligently to understand the refund claims and document how they 
had repeatedly gone missing. However, he was then suddenly overruled by 
National Taxpayer Advocate, Nina Olsen, who announced her personal 
ruling that any use of the word ``forfeiture'' in connection with money 
acquired by the IRS, makes the money a gift or off-the-books payment to 
the IRS regardless of the circumstances by which it was obtained. If 
Ms. Olsen's dictum is a correct statement of IRS policy, then this is 
an agency that has engaged in criminal fraud and required several of 
its employees, including ones at high levels, to act as accessories 
after the fact in furtherance of the fraud. Point I, infra, explains 
how a central part of the fraud has involved creating an imaginary law 
against ``structuring generally,'' that has been misrepresented to be 
the actual law against structuring a single transaction over $10,000 in 
currency. 31 U.S.C. Sec. 5324(a)(3). The actual and imaginary laws bear 
superficial similarity, but the imaginary one is much broader in 
ostensibly authorizing forfeiture of all cash income of lawful 
businesses lawfully put in domestic banks as separate deposits under 
$10,000. In the case of Country Folk Art Shows and many other 
legitimate businesses, bank officials have advised how deposits could 
lawfully be made, depositors have attempted to follow the law, and IRS 
agents have confiscated the money for their own use because of what 
former Attorney General Eric Holder has approvingly called 
``structuring generally.'' The expansion of this practice has occurred 
after the Deputy Attorney General of a prior Republican Administration 
conducted a detailed review with my assistance and warned against the 
illegality of what was occurring.

    Having recently watched the video recording of the Committee's June 
28 hearing, I am heartened by several things. American taxpayers should 
be grateful for the work of Senators Scott and Isakson in sponsoring 
the Respect Act and to Senator Scott for eliciting a promise of 
compliance from Commissioner-designate Rettig. Specifically, Senator 
Scott stated:

        The IRS currently wields a tremendous amount of power over the 
        folks in South Carolina and across the country, far more than 
        the founders intended. One example is found in civil asset 
        forfeiture. This practice allows the IRS to confiscate a 
        citizen's wealth upon the mere suspicion of wrongdoing. During 
        a two-year investigation the Ways and Means Oversight 
        Subcommittee discovered the IRS had seized civil assets from 
        small business owners without providing substantial evidence to 
        support their claim. That is why I introduced the RESPECT Act 
        to require the IRS to show probable cause before seizing assets 
        and facilitate taxpayer presentation of proof that would clear 
        them of wrongdoing. Will you commit to working with me to 
        protect taxpayers and small businesses?

Mr. Rettig replied, ``Absolutely.'' (V. R. 2:01:30 to 2:02:20). I was 
also given hope by Mr. Rettig's recognition that the public's trust in 
the IRS to act lawfully ``is critical to the success not only of the 
IRS but of this country,'' and his professed commitment ``to rebuild 
the trust in that agency [and] to confirm to the American taxpayers 
that the Internal Revenue Service is impartial, nonbiased and color 
blind for all purposes.'' (V. R. 53:40 to 54:10). Also heartening was 
Chairman Batch's warning that ``if the IRS shall slip up or fail to 
live up to the high standards that Congress has set, this Committee 
will hold the IRS accountable.'' (V. R. 33:10). Such oversight may be 
essential because Mr. Rettig's seemingly heartfelt promise to adhere to 
the law closely resembled words previously spoken by former 
Commissioner Koskinen before the House Oversight Subcommittee. However, 
Mr. Koskinen's lavish promises were quickly followed by an admission 
that others in the IRS prevented him from knowing or considering the 
details of any specific case. This resulted in a lengthy period where 
the Commissioner acted as a kind of shill offering the utmost devotion 
to lawfulness in the abstract where running interference for a plethora 
of unlawful practices.

 I. Abuses of Civil Forfeiture Stemming From the Imaginary Law against 
                       ``Structuring Generally''

    The pseudo-law against ``structuring'' was conjured to mimic but 
have much broader application than the actual law against structuring a 
single transaction in currency, 31 U.S.C. Sec. 5324(a)(3). Congress 
enacted the real law in the 1980s to aid in the enforcement of laws 
against money laundering by closing off a familiar loophole. Money 
launderers had been known to hire bank runners known as ``smurfs'' to 
help them evade the CTR filing requirement for cash transactions that 
exceeded ten thousand dollars at a single financial institution in a 
single day. The paradigm case was of a launderer who would hire two or 
more smurfs to bring cash amounts between five and ten thousand dollars 
to different tellers and thereby get more than $10,000 into the 
destination bank without having a CTR filed.

    The Secretary of the Treasury, who created the rules that defined 
the law (Part 103 of the Code of Federal Regulations), understood there 
were many legitimate cash businesses which regularly deposited cash 
receipts of more than a couple thousand dollars. To distinguish money 
launderers and smurfs, who typically worked with a single corrupt 
institution, from these other legitimate businesses, the Secretary 
imposed an important limitation on Sec. 5324(a)(3). In order for the 
law to be violated there had to be a single transaction of more than 
$10,000 cash that was being broken up--or structured--into smaller 
transactions to evade the requirement. This structured single 
transaction was clearly distinguished in the law from a series of 
separate cash transactions under $10,000 that could have been 
aggregated by making fewer cash deposits. For the last thirty years the 
CFR has clearly defined a single transaction as the sum total of all 
cash transactions with a single banking institution (including all its 
branches) made within a 24-hour period. While the regulations were 
clear from the outset, any possible doubt about their meaning was 
erased in 1994 when the United States Supreme Court further clarified 
that the currency structuring law only prohibits ``break[ing] up a 
single [currency] transaction above the [$10,000] reporting threshold 
into two or more separate transactions for the purpose of evading a 
financial institution's [CTR] reporting requirement.'' Ratzlaf v. 
United States, 535 U.S. 135, 136 (1994) (emphasis supplied).

    With the actual law defined in this way, smaller banks and branches 
that found the CTR filing requirement onerous were left free to advise 
owners of cash businesses simply to keep their daily deposits under 
$10,000 and use other banks in addition to theirs if necessary. As a 
result, the CFAS owners, who typically received thousands of gate 
receipts in small denominations, made numerous cash deposits in a 
number of banks in amounts under $10,000. The IRS waited five years and 
then forfeited all the cash deposits, totaling about four million 
dollars, which were distributed internally by AFMLS and IRS Criminal 
Investigations. The Service and a cooperating U.S. Attorney first 
obtained consent to the forfeiture by promising to follow IRS written 
policy directing that the money could only be used as tax payments, 
then three months later decided to defy the directive of the Assistant 
Commissioner for Criminal Investigations and assess the same tax 
liability a second time. The clients paid under protest and retained me 
in 1994 to get the money back. After the Sixth Circuit Court of Appeals 
determined in 2001that tax refunds were the appropriate vehicle and the 
Deputy Attorney General requested in 2005 that the IRS act on long 
pending refund claims, the IRS, visibly acting under the leadership of 
Division Counsel Edward G. (``Ted'') Cronin, not only defied the 
request, but proceeded to launch numerous shakedown operations--all 
fraudulent and unlawful, based on the same imaginary law against 
``structuring generally.'' According to a New York Times investigation, 
more than $242 million was seized by the IRS for ``suspected 
structuring violations'' between 2005 and 2012 in more than 2,500 
cases. The Country Folk Art Shows forfeiture was one of the first and 
largest of these unlawful seizures; it was also the one that led to a 
warning from the top of the Justice Department, the disregard of which 
now leaves the IRS with the headache of an additional 2,500 cases.

    Since the Times's full front page article came out on October 25, 
2014 the House Ways and Means Government Oversight Subcommittee has 
implemented what I am told is extensive oversight. Surprisingly, there 
continues to be defiance from IRS leadership, most recently from the 
National Taxpayer Advocate, Nina Olsen. With all plausible legal 
arguments for keeping the money having been either defeated or 
abandoned in court, it is puzzling why this continues. In 2015 I 
explained to TIGTA agents why I thought the practice was criminal, 
saying that to

        understand how the sudden switch from the actual law against 
        structuring a single transaction in currency to the imaginary 
        law against ``structuring generally'' can convert IRS Criminal 
        Investigations officers into perpetrators of crime it helps to 
        consider an on-point analogy to the actual offenses of bank 
        robbery, attempted bank robbery and conspiracy to commit bank 
        robbery. Once such an offense occurs persons who drive the 
        getaway car will also be guilty of the offense. So it would 
        make sense to clarify that driving a vehicle away from a bank 
        with cash taken from the bank inside it can indeed make one 
        liable for bank robbery or conspiracy to commit bank robbery. 
        But if one focuses simply on the act of driving a vehicle with 
        cash removed from a bank and begins to conjure an imaginary law 
        against using a motor vehicle to assist in removing cash from a 
        bank while ignoring the other essential elements of the crime 
        of bank robbery, then one is likely to instigate the following 
        rash of criminal acts by law enforcement agents:

        The agents lie in wait outside banks. When they observe 
        customers leaving ATM machines the agents follow their cars, 
        stop them after a few blocks and then forfeit to AFMLS and 
        themselves all cash in the driver's or passenger's possession 
        along with the vehicle, while threatening to prosecute everyone 
        in the car for using a motor vehicle to assist in removing cash 
        from a bank. Given the essentially fraudulent nature of such 
        prosecutions it makes sense to threaten drivers and passengers 
        with lengthy prison sentences but allow them to avoid the time 
        in prison if they surrender to AFMLS and the agents all the 
        cash taken as well as their vehicles.

Report on the IRS Unlawful Asset Conversion Program Based on an 
Imaginary Law Against ``Structuring'' Generally and IRS Counsel's 
Continuing Attempts to Mask Fraud by Seeking to Impose Double Taxation 
on the Owners of Country Folk Art Shows (``TIGTA Report'') at 6.

    Businesses making frequent four-figure cash deposits are like most 
people getting cash from an ATM machine and driving away in a car. 
Under certain narrow, legally defined circumstances that have been 
shaped to combat genuine wrongdoing the actions can be part of a crime, 
but when AFMLS and IRS Criminal Investigations agents start seizing 
money for themselves by pretending that any transporting of money from 
a bank by car is a crime, innocent people are victimized and the 
government agencies become the criminal.

  II. Reasons for Extending Committee Oversight to the Particular Tax 
            Refund Claims of Country Folk Arts Shows Owners

    Because there have been so many court proceedings, agency reviews 
and evasive maneuvers conducted over a nearly twenty-year time span, 
the history of the Country Folk Art Shows refund claims provides a 
useful diagnostic tool for identifying sections of the IRS where the 
agency's commitment to upholding the law has been weak or nonexistent. 
Although a full exposition of wrongdoing by every involved part of the 
agency is beyond the purview of this statement (even though complete 
documentation has been retained), we should note that some offices in 
need of further scrutiny include not only IRS Criminal Investigations, 
but also the Office of the Commissioner, Office of Chief Counsel and 
the National Taxpayer Advocate personally. Once conflict of interest 
issues have been resolved, I look forward to providing my services on a 
volunteer basis to anyone, hopefully including Mr. Rettig as 
Commissioner, who takes seriously the job of cleaning up this agency. 
For now a brief summary of the circumstances giving rise to the refund 
claims will have to suffice.

    CFAS, like most successful cash businesses, had to deal with 
receiving a large volume of small bills. These were regularly deposited 
in several physically adjacent banks in Grand Blanc, Michigan, pursuant 
to legally correct advice provided by bank personnel. Most, but not 
all, of the deposits were under $10,000. Initially the IRS and Justice 
Department believed--or pretended to believe--that all four million 
dollars worth of bank deposits were ``involved in structuring'' and 
could be forfeited. However, because no illegal contraband was 
involved, IRS written policy required that the assets be credited as 
tax payments. The government's subsequent attempt to retain the 
taxpayers' assets over and above collecting full payment of their tax 
liability was contrary to IRS written policy at the time, as well as, 
obviously, the Internal Revenue Code's prohibition on collecting two 
times for the same tax liability. See the IRS Litigation Guideline 
Memorandum dated September 3, 1991 which incorporated a Policy 
Memorandum of the Assistant Commissioner (Criminal Investigations) 
dated October 26, 1988 that specifically addressed forfeitures under 31 
U.S.C. Sec. 5324 and stated that ``forfeiture is appropriate only where 
there is a reasonable belief that the property is derived from criminal 
activity unrelated to tax violations,'' and ``if the property is not 
criminally derived, and tax has been paid on it, forfeiture is not 
authorized and the property should be returned.'' Tax Notes Today, 
January 12, 1996 at 10. Because the owners acknowledged and wanted to 
pay off their tax liability with the greatest degree of cooperation, 
they consented to the forfeiture on September 25, 1992.

    The effect of the IRS bait and switch three months after the 
consent judgment was to say that domestic banks operate as a kind of 
hidden trap door where depositors think they are depositing the money 
for safekeeping, but they are actually making unwitting donations to 
IRS agents and the Department of Justice Assets Forfeiture and Money 
Laundering Section (``AFMLS''). It took nearly ten years of litigation 
to get the owners fully exonerated of all currency structuring charges 
and for the government to concede that the owners' deposits had not 
violated the actual currency structuring law. This happened in stages, 
an important one being the Deputy Attorney General's review that 
concluded with a July 25, 2005 letter of Associate Deputy Attorney 
General Catherine O'Neil to IRS Criminal Investigations (``CI'') Chief 
Nancy Jardini implicitly acknowledging that there had been no basis for 
the forfeiture other than tax liability. O'Neil's letter to Jardini 
concluded, ``this office has been mindful of the fact that the factual 
basis for the forfeiture appears to be closely linked with the facts 
underlying the $5.3 million tax liability of the taxpayers. Counsel for 
the taxpayers has advised us that he filed a refund claim with the 
Internal Revenue Service pertaining to that tax assessment on or about 
April 2, 2002. As you and I have discussed, I am writing to suggest 
that your office undertake its own review of the facts of the pending 
refund claim and render a decision.''

    Pursuant to this request Division Counsel for CI completed its own 
review by the end of 2005 and apparently reached similar conclusions. 
However, the IRS then commenced what appear in retrospect to have been 
evasive maneuvers. Division Counsel Edward F. Cronin moved to suppress 
the Criminal Investigations review by claiming attorney-client 
privilege and Jardini wrote, ``we have concluded that the Internal 
Revenue Service-Criminal Investigations (CI) does not have jurisdiction 
with regard these [tax refund] claims.'' Although technically correct 
in this, Jardini did not take the next step and pass the refund claims 
along to the Small Business and Self-Employed Division, which did have 
jurisdiction over them. Instead the tax refund claims kept being lost 
and all correspondence was routed by Cronin.

    After Ashcroft, Corney and O'Neil had all left office in 2005, the 
task of following up on the Justice Department's review was entrusted 
to the chief counsel for AFMLS, Lester Joseph. No longer able to 
ballyhoo the imaginary law, he shifted to claiming that DOJ had no 
capacity to dissuade the IRS from pursuing its unlawful course of 
action. This necessitated further litigation which clarified the one 
essential legal point for the requested refunds to be granted: Were 
there four million dollars worth of violations of the actual currency 
structuring law? On August 6, 2008 in response to a motion to 
supplement the record on appeal a panel of three Sixth Circuit judges 
ruled that Plaintiffs

        now move to supplement the record on appeal by requiring the 
        government to file with the court a list of structured 
        transactions. No such list was filed in the district court, and 
        that court did not consider a list of structured transactions 
        in ruling on the appellants' motion to vacate. The government 
        opposes the motion to supplement the record. . . . As noted by 
        the court in denying appellants' motion for a limited remand, a 
        list of structured transactions will not assist the court in 
        its consideration of the issue on appeal.

(Emphasis supplied). If the factual basis of the forfeiture had been 
structured transactions rather than payment of tax liability, then a 
list of structured transactions would have been absolutely essential 
for ``consideration of the issue on appeal'' due to an absolute rule 
that consent judgments of forfeiture having no factual basis are void 
and must be set aside. See Libretti v. United States, 516 U.S. 29, 42-
44, 55-56 (1995) (unanimously affirming absolute need for factual basis 
set forth by statute and declaring judgments of forfeiture without 
statutory basis to be void).

    In other words, the illegality of using ``structuring'' generally, 
as opposed to actual violations of 31 U.S.C. Sec. 5324(a)(3) which 
require structuring a single transaction in currency, was now finally 
acknowledged. In 2008 the Sixth Circuit continued to let the consent 
judgment of forfeiture stand because it had a factual basis rooted in 
the IRS's authority to collect taxes owed at the time. But because the 
factual basis was now acknowledged to be collection of taxes owed, 
there was no longer any conceivable justification for allowing the 
double-taxation to stand. Hence the Commissioner's mandatory duty to 
recognize the forfeited assets as tax payments.

    The issue of whether tax refunds were the appropriate vehicle for 
granting the CFAS owners redress had been resolved by the Sixth Circuit 
Court of Appeals in an earlier lawsuit. In Blakely v. United States, 
276 F.3d 853 (2002) the Sixth Circuit decided that since any money owed 
to the taxpayers could come back to them as tax refunds, other avenues 
of redress were not necessary. It declined to set aside the Consent 
Judgment of Forfeiture, noting a general reluctance to set aside 
consent judgments that were not blatantly illegal. It held that the 
Department of Justice procedures for refunding money through petitions 
for remission were voluntary with the Assets Forfeiture and Money 
Laundering Section (``AFMLS''), and it considered the Federal Tort 
Claims Act inapplicable to the taking of assets by means of a consent 
judgment. The Sixth Circuit panel also ruled that taxpayers could not 
yet sue for tax refunds because they had not yet exhausted their 
administrative remedies with the IRS. The taxpayers' 54-page refund 
demand letter, which I drafted and filed with the IRS on August 17, 
1994, was deemed insufficient to constitute an exhaustion of remedies 
because it failed to meet certain technical requirements of a refund 
claim.

    However, the panel noted that the letter, which had been filed 
within two years of the forfeiture, would likely toll any statute of 
limitations under United States v. Kales, 314 U.S. 186, 194 (1941) 
because it satisfied the requirements of an informal claim. Even though 
the taxpayers had not yet satisfied the requirements for filing a tax 
refund suit as of 1999 when they first attempted to sue for a refund, 
the fact that the August 17, 1994 letter had satisfied the requirements 
of an informal claim under United States v. Kales (informal claim must 
have ``a written component,'' communicate that a refund is being sought 
and ``furnish sufficient information to `allow the IRS to make a 
reasonable and intelligent investigation and evaluation of the 
taxpayer's claim' '') meant that the Amended Refund Claims necessitated 
by the court's decision, would relate back to the filing date of August 
17, 1994. The Amended Refund Claims were filed within three months of 
the Sixth Circuit's decision.

The Blakely Court's lengthy footnote 9, 276 F.3d at 874, correctly 
summarized the main issue regarding timeliness of the taxpayers' refund 
claims brought under 26 U.S.C. Sec. 7422:

        Plaintiffs' brief makes clear that the issues raised in this 
        case involve their challenge to the consent decree, which 
        perfected the forfeiture of their property. Plaintiffs argue 
        that misrepresentations on the part of the government induced 
        them to enter into the consent judgment by promising Plaintiffs 
        that their forfeited assets would be used to pay off their tax 
        liability. See Plaintiffs' Br. at 12. Thus, Plaintiffs admit 
        that their suit revolves around their challenge to the consent 
        judgment. Moreover, Plaintiffs admit that in order to file a 
        tax refund suit, they must first have exhausted their 
        administrative remedies by filing an administrative claim with 
        the Secretary of the Treasury. See McDonnell v. United States, 
        180 F.3d 721, 722 (6th Cir. 1999) (explaining that 26 U.S.C. 
        Sec. 7422(a) requires taxpayer to first file an administrative 
        claim before filing judicial action). . .  .

        Plaintiffs claim they did so by hand delivering the [54-page] 
        August 17, 1994 letter to IRS agents. However, that argument 
        was not made before the district court when it ruled on 
        Plaintiffs' motion, thus, they are barred from raising the 
        argument here. Anchor Motor Freight, 899 F.2d at 559. Moreover, 
        the 1994 letter fails to meet the requirements of an informal 
        claim. See Hale v. United States, 876 F.2d 1258, 1262 (6th Cir. 
        1989) (noting that informal request for tax refund must apprize 
        IRS that a refund is sought and for certain years). The 1994 
        letter fails to meet this standard.

276 F.3d at 874, n.9.

But the court went on to add:

        Plaintiffs correctly contend that deficiencies in timely filed 
        informal claims have been overlooked when an amendment, even if 
        untimely, remedies such deficiencies. United States v. Kales, 
        314 U.S. 186, 194 (1941). However, Plaintiffs have yet to point 
        to an amendment that remedies any deficiencies in the 1994 
        letter.

    Thus the Sixth Circuit's Blakely opinion effectively directed the 
filing of the amended refund claims three months later. It also made 
clear that the timeliness of that filing in April 2002 would need to be 
determined by applying the standards of United States v. Kales to the 
54-page refund demand letter that taxpayers filed with IRS on August 
17, 1994. Those standards required ``a written component,'' which 
communicated that a refund was being sought and ``furnish[ed] 
sufficient information to `allow the IRS to make a reasonable and 
intelligent investigation and evaluation of the taxpayer's claim'.''

    United States v. Kales is unequivocal in maintaining that a letter 
satisfying the requirements of an informal claim will preserve the 
timeliness of a refund claim that is properly formalized after the 
lapsing of the statutory period. In it the Supreme Court states:

        This Court, applying the statute and regulations, has often 
        held that a notice fairly advising the Commissioner of the 
        nature of the taxpayer's claim, which the Commissioner could 
        reject because too general or because it does not comply with 
        formal requirements of the statute and regulations, will 
        nevertheless be treated as a claim, where formal defects and 
        lack of specificity have been remedied by amendment filed after 
        the lapse of the statutory period. United States v. Memphis 
        Cotton Oil Co., 288 U.S. 62; United States v. Factors and 
        Finance Co., 288 U.S. 89; Bemis Bro. Bag Co. v. United States, 
        289 U.S. 28; Moore Ice Cream Co. v. Rose, 289 U.S. 373, 384. 
        This is especially the case where such a claim has not misled 
        the Commissioner and he has accepted and treated it as such. 
        Bonwit Teller and Co. v. United States, 283 U.S. 258; United 
        States v. Memphis Cotton Oil Co., supra, 70.

314 U.S. at 194. The Supreme Court proceeded in Kales to deem a letter 
filed 16 years before its decision sufficient to preserve the 
taxpayer's refund claim. In the federal court system the Supreme 
Court's Kales decision has been cited or followed 378 times. It has 
never been disapproved and only once has its validity been questioned. 
That question related to an entirely different aspect of Kales. See 
Farnsworth v. Phinney, 297 F.2d 681,684 (51 Cir. 1962) (discussing 
whether a suit against a tax collector was res judicata against a 
taxpayer suing the United States). So once the IRS decides to follow 
the law as set forth in Kales and its many progeny the conclusion that 
the Longs' and Blakelys' amended refund claims were timely when filed 
will follow automatically because a 54-page refund demand letter easily 
qualifies as having ``a written component'' communicating that a refund 
is being sought, and ``furnish[es] sufficient information to `allow the 
IRS to make a reasonable and intelligent investigation and evaluation 
of the taxpayer's claim'.''

    After the Blakely decision came down the government made no effort 
to argue that refund claims would be untimely or to argue that the 
Kales standard had not been met. Its efforts centered on trying to 
defend the idea of taxpayers' ``structuring'' being a ``civil'' offense 
that provided an independent factual basis for civil forfeiture. This 
strategy was pursued from the trial court's August 21, 1997 vacatur of 
currency structuring convictions and ensuing dismissal of all currency 
structuring charges until the Deputy Attorney General's 2005 review 
acknowledged that there had been no basis for the forfeiture other than 
tax liability.

    After 2008 the government ceased making any attempt to set forth a 
substantive defense of the double taxation, but simply set about 
repeatedly losing the refund claims and their eighty pages of attached 
documentation. Over the years I have probably filed and refiled these 
claims about eight times. In 2013, after Gregg Hoffmaster in the Office 
of Chief Counsel advised that I should file yet another lawsuit, I 
filed a mandamus action against the IRS Commissioner and Secretary of 
the Treasury seeking a court order that they cease diverting tax 
payments into grants to IRS Criminal Investigations and grant refunds 
for money so diverted. The government's response was to refuse to take 
any position on the merits or address them in any way, but simply to 
contest the venue of the court where the lawsuit was filed, 
notwithstanding the law's liberal handling of venue requirements for 
mandamus lawsuits.

                               Conclusion

    Examining IRS mishandling of the Country Folk Art Shows refund 
claims provides insight into abuses relating not only to civil asset 
forfeiture, but into the agency's handling of any refund claim. Even if 
a revenue agent could conjure a legally plausible ground for denying or 
greatly reducing the claims, the claims would still merit a good-faith 
response from the IRS. Seeing how the agency evaded its duty to provide 
such a response will show oversight agencies problematic tendencies 
that need to be controlled going forward. In addition, we appear to 
have witnessed continued stonewalling of the Oversight Subcommittee's 
efforts to elicit agency cooperation in remedying past abuses. If the 
new leadership is confirmed and allowed to lapse into the Koskinen 
tradition of being strongly committed to upholding the law in the 
abstract but very permissive in allowing abuses to continue 
unredressed, then this entire saga beginning with the imaginary law 
against ``structuring generally,'' will mark a serious defeat for 
legislative oversight and efforts to sustain lawfulness in government.


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