[Congressional Record Volume 162, Number 61 (Wednesday, April 20, 2016)]
[House]
[Pages H1863-H1868]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
IRS OVERSIGHT WHILE ELIMINATING SPENDING (OWES) ACT OF 2016
Mr. SMITH of Missouri. Mr. Speaker, pursuant to House Resolution 687,
I call up the bill (H.R. 4885) to require that user fees collected by
the Internal Revenue Service be deposited into the general fund of the
Treasury, and ask for its immediate consideration.
The Clerk read the title of the bill.
The SPEAKER pro tempore. Pursuant to House Resolution 687, in lieu of
the amendment in the nature of a substitute recommended by the
Committee on Ways and Means printed in the bill, an amendment in the
nature of a substitute consisting of the text of Rules Committee Print
114-50 is adopted and the bill, as amended, is considered read.
The text of the bill, as amended, is as follows:
H.R. 4885
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``IRS Oversight While
Eliminating Spending (OWES) Act of 2016''.
SEC. 2. DEPOSIT OF IRS USER FEES INTO GENERAL FUND OF THE
TREASURY.
(a) In General.--The second sentence of section 3 of title
I of Public Law 103-329 (26 U.S.C. 7801 note), under the
heading ``administrative provisions-internal revenue
service'', is amended by striking ``The Secretary of the
Treasury may spend'' and all that follows through ``and
thereafter:'' and inserting the following: ``Any fees
collected pursuant to this section shall be deposited in the
general fund of the Treasury and shall not be expended by the
Internal Revenue Service unless provided by an appropriations
Act:''.
(b) Conforming Amendment.--The last proviso of such section
is amended by striking ``and how they are being expended by
the Service''.
(c) Effective Date.--The amendments made by this section
shall apply to fees collected after the date of the enactment
of this Act.
The SPEAKER pro tempore. The bill shall be debatable for 1 hour
equally divided and controlled by the chair and ranking minority member
of the Committee on Ways and Means.
The gentleman from Missouri (Mr. Smith) and the gentleman from
Michigan (Mr. Levin) each will control 30 minutes.
The Chair recognizes the gentleman from Missouri.
General Leave
Mr. SMITH of Missouri. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative day in which to revise and extend their
remarks and include extraneous materials on H.R. 4885, currently under
consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Missouri?
There was no objection.
Mr. SMITH of Missouri. Mr. Speaker, I yield myself such time as I may
consume.
The IRS OWES Act is about protecting the American taxpayer, those who
elected us to represent them, from an IRS proven incapable of best
serving their interests.
President Thomas Jefferson said: ``When the people fear the
government, there is tyranny. When the government fears the people,
there is liberty.''
Right now, the people of Missouri's Eighth District fear the IRS.
They fear an unjust audit, political or religious targeting, and, most
recently, they fear spending an average of 8 hours to complete their
tax returns. That is simply not right.
This bill is about liberating the folks of Missouri, along with all
Americans, from the IRS. It is about making the IRS beholden to them
and not the other way around. And it is about exerting our Article I
authority of the power of the purse of Congress, making sure that
unelected bureaucrats are not spending taxpayer money improperly and
unwisely.
A Democrat Congressman from the State of Missouri once said: ``I come
from a State that raises corn and cotton, cockleburs, and Democrats.
And frothy eloquence neither convinces, nor satisfies me. I'm from
Missouri; you've got to show me.''
The IRS has not shown this body, they have not proven to the
Missourians whom I represent, and they have not proven to the American
people that they are responsible stewards of user fees. Through user
fees, the IRS collects almost $500 million. It is nothing but a slush
fund.
Mr. Speaker, that is why we filed the IRS OWES Act. It provides
Congress and the American public with greater oversight in how the IRS
is spending valuable taxpayer resources.
As is, the IRS collects various user fees that sit in an account
where they can spend the money without Congressional approval. In the
past, the IRS dedicated significant amounts of its collected user fees
to improving the services provided to taxpayers who need assistance.
The IRS in the past few years has turned these fees into a slush
fund, diverting this money away from serving the taxpayer and, instead,
putting it towards whatever they want--in particular, the
implementation of ObamaCare mandates, something Congress has
specifically withheld funding for.
In 2014, the IRS allocated $183 million in user fees to serving the
needs of taxpayers. That is 44 percent of the entire slush fund. Yet,
in 2015, the IRS allocated a mere $49 million in user fees to help
taxpayers. That is 10 percent. So in one year, they went from 44
percent of serving taxpayers to 10 percent in serving taxpayers, at
their own discretion.
Just yesterday I asked the IRS Commissioner in a hearing whether it
was Congress or the IRS that cut funding for taxpayer customer service.
Here were my questions and his answers:
``In 2014, you appropriated $183 million for taxpayer assistance; is
that correct?''
The Commissioner said: ``Yes.''
I then followed up: ``In 2015, you appropriated $49 million for
taxpayer assistance; is that correct?''
The Commissioner said: ``That is correct.''
I then followed up: ``So it was your decision to cut taxpayer
assistance by $130 million; is that correct?''
The Commissioner of the IRS said: ``Yes.''
Instead of using those resources to grow taxpayer services, reduce
wait times, and improve the public's interactions with the IRS, they
are dedicating close to $200 million on technology to help implement
and track the ObamaCare mandates. It is no wonder that last year the
Commissioner of the IRS would call the level of taxpayer services
abysmal. That is simply unacceptable.
The pattern here is alarming. When the IRS has discretion, the agency
uses that discretion in ways that harm Americans. It is the duty of the
IRS to work for the taxpayers, not against them.
I encourage my colleagues to do the citizens they represent a favor
and support the IRS OWES Act.
I reserve the balance of my time.
Mr. LEVIN. Mr. Speaker, I yield myself such time as I may consume.
Here is the story. Here are the honest facts.
Republicans have cut the IRS budget by close to $1 billion over the
past 5 years. This bill is just another budget cut, further reducing
the IRS' budget by as much as $500 million.
The consequences of these budget cuts for taxpayers are significant,
as you can see from this chart. What has happened since 2011 is the
appropriations have gone down and waiting times have gone up. The
average wait is shown by this blue line. The dollars
[[Page H1864]]
are in the yellow. The only improvement was when we appropriated a
couple hundred million dollars at the initiative of Democrats, and the
waiting times went down as money went up.
The Republicans who complain about poor IRS customer service, they
have only to look in the mirror to see who is responsible. Here are the
facts.
Republican cuts to the IRS budget from 2010 to 2015 resulted in--and
everyone listen to this--13,000 fewer full-time IRS employees; a
significant number of taxpayer phone calls being dropped, as indicated
by this chart; delays in much-needed upgrades to information technology
and cybersecurity; and the lowest level of audits in a decade with less
than 1 percent of taxpayers being audited last year. This is all
despite the fact that the number of tax returns being filed increased
by $9 million, or 7 percent, since 2010.
{time} 1230
This effort today is motivated entirely by politics instead of good
policy. The IRS has had the authority to offset the cost of taxpayer
services with user fees since 1995. The Republicans have never tried to
tamper with that. This is the first time the Republicans have tried to
prevent the IRS from using these moneys.
We heard the Republicans argue that the IRS used some of this funding
to implement the Affordable Care Act. True, as those are taxpayer
services. Taxpayers are applying for help through the Affordable Care
Act. It is the IRS' responsibility to implement that. The IRS is doing
exactly what they should be doing: implementing a law passed by
Congress, a law that has resulted in there being 20 million more
Americans with healthcare coverage.
This bill is, in essence, another effort--it might be--what?--No. 63,
64, 65--to undermine healthcare reform. That is really what this is all
about, and the gentleman who presented the case made that case. The
IRS' helping people get access to healthcare reform is a taxpayer
service.
The White House issued a Statement of Administration Policy, which
reads, if the President were presented with this bill, his senior
advisers would recommend he veto it.
The statement reads as follows: ``By further constraining IRS
resources, H.R. 4885 would have detrimental effects on the IRS' ability
to provide quality service to taxpayers, administer the Tax Code, and
enforce tax laws.''
That is really what this is all about.
The statement continues: ``The IRS needs more resources, not fewer,
to deter tax cheats, serve honest taxpayers, and protect taxpayer
data.''
The Republicans are using these IRS bills this week to attack the IRS
and its employees as a distraction. They don't want hardworking
Americans to know what they missed the deadline on: to come up with a
budget. They are doing absolutely nothing to help the people of Flint
or of Puerto Rico, who so desperately need our help.
I urge my colleagues to vote ``no'' for the reasons outlined by this
chart: for the need of more resources for customer services and to
thwart a further effort by the Republicans to undermine the ACA, which
has meant so much to millions and millions and millions of Americans
from all walks of life. This should be resoundingly voted down, surely
by us Democrats, who believe in customer service and who want the ACA
implemented, not destroyed by the Republican Party of this House or of
the Senate.
I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I yield 2 minutes to the
gentleman from Louisiana (Mr. Scalise).
Mr. SCALISE. I thank my colleague from Missouri for bringing this
bill to the floor and for his leadership in holding the IRS
accountable.
Mr. Speaker, I guess we should start with the question of who is
attacking whom. When you look at the actions of the IRS, especially in
the last few years--and we have exposed this through our oversight here
in this House majority--we have found it is the IRS that has been
attacking the hardworking taxpayers of this country.
It has not only been documented, but it has come out in hearings that
the IRS was actually targeting people--American citizens--based on
their political views. The IRS was. You could expect this, maybe, in a
Third World country where the government would actually be attacking
people based on their political views, but, here in America, this IRS
was doing just that, and we exposed it.
One is seeing with the bill that Congressman Smith is bringing
forward that the IRS has created, in essence, a slush fund, using user
fees for things that weren't even intended and that aren't even in the
purview of Congress. What are they afraid of? Why are they afraid of
having some real transparency so that we can actually hold the IRS
accountable for these user fees? Hundreds of millions of dollars of
user fees, by the way, are paid by hardworking families out there who
are struggling to get by. When somebody actually calls the IRS hotline
right now, estimates are that fewer than 40 percent of Americans who
call the IRS hotline to get help are able to get help.
The IRS is not helping people they are supposed to be helping. They
have these slush funds, and they don't want them to be under the
purview of Congress? What are they afraid of hiding? Is it, maybe, that
we are going to expose more things, like they are using taxpayer money
to target people? Maybe we are going to expose more things, like they
were actually hiring people who were fired from the IRS because they
were improperly accessing people's taxpayer data, or the fact that they
have given out bonuses to people when they can't even show they have a
customer service plan.
When one is looking at so many abuses by the IRS, it is an agency
that is out of control. Now we have a bill by the gentleman from
Missouri to at least bring some of that into the purview of Congress so
that it is exposed in the sunshine of transparency. Why be against
transparency? Let's pass this bill.
Mr. LEVIN. Mr. Speaker, I yield myself 2 minutes.
Look, as happened yesterday, I expect the Republicans to try to bring
up the issue relating to the IRS and how it handled 501(c)(4)
applications. As I did yesterday, I just want to read an answer given
by the inspector general on this issue.
On May 17, 2013, I asked him as follows: ``Did you find any evidence
of political motivation in the selection of the tax exemption
applications?''
Inspector George said: ``We did not, sir.''
Next, customer service. You have the gall to come forth here and
complain about customer service when you cut the IRS' budget over 5
years by almost $900 million. That really takes gall. It is so
inconsistent. As I said earlier, look in the mirror, and you will see
who is responsible for those problems.
I want to finish by saying: Slush fund? Implementing healthcare
reform that has helped 20 million people, that is a slush fund? No.
That is the implementation by the IRS of a necessary function that
affects the lives and the health care of millions of Americans.
So you are really bankrupt to come forth here and support this bill.
Mr. Speaker, I ask unanimous consent that the gentleman from Oregon
(Mr. Blumenauer) control the remainder of my time.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Michigan?
There was no objection.
The SPEAKER pro tempore. Members are reminded to direct their remarks
to the Chair.
Mr. SMITH of Missouri. Mr. Speaker, I yield myself 1 minute.
I would like to respond to the gentleman's prior comments.
As a matter of fact, since fiscal year 2013, in budget sequestration,
Congress has either maintained or increased funding for taxpayer
services each and every year--never cutting it one time. Any cuts to
taxpayer services have come at the clear discretion of the IRS
Commissioner.
Yesterday, in committee, the IRS Commissioner said that it was his
discretion to cut taxpayer services. In fact, in the last year, they
cut $134 million. In the last 4 years, Congress has not cut $1 in
taxpayer services; so let's get the record straight while we are on the
House floor.
I yield 2 minutes to the gentlewoman from Kansas (Ms. Jenkins), a
member of the Ways and Means Committee and the vice chair of the
Conference.
Ms. JENKINS of Kansas. I thank the gentleman for yielding.
[[Page H1865]]
Mr. Speaker, I am pleased to come to the House floor in support of
the IRS Oversight While Eliminating Spending Act, sponsored by my
colleague, Mr. Smith.
I spent many years practicing in the tax area as a certified public
accountant, so I understand firsthand why tax day has become a dreaded
annual burden to so many Americans. The economy has yet to rebound from
the recession, and wage growth is stagnant; but, in 2016, individuals
will spend more on their taxes than on clothing, food, and housing
combined.
While Americans continue to face the threat of increasing taxes--
thanks to this administration--the tax process has gotten only more
complicated and confusing. On top of that, the IRS has mishandled
taxpayer funds, has provided inadequate customer service, and has
proven to be unwilling or unable to change.
This commonsense legislation brings us one step closer to providing
the proper oversight over the IRS' activities. At the moment, the IRS
currently charges user fees, and Congress has no say as to how these
fees are used.
I am extremely disappointed this agency is playing politics with
these fees. They cut the fees allocated to customer service by 73
percent this year, and they reallocated those funds in an effort to try
to extract additional fees from the American taxpayer. Folks are
already paying more than enough in taxes.
If the IRS wants taxpayers to pay fees, then they need to account for
how they are using every last cent of that money. Oversight from
Congress will ensure no frivolous use by a wasteful IRS.
I urge my colleagues to support this legislation. We cannot continue
to reward inefficient bureaucracies. The American people deserve to
have a say in how the IRS spends our hard-earned tax dollars.
Mr. BLUMENAUER. Mr. Speaker, I yield myself such time as I may
consume.
It is painful to listen to some of the rhetoric here on the floor
that suggests that, somehow, the use of resources by the IRS is not
dealing with customer service. The gentleman admitted that, under
Republican leadership, they have worked to not fund the necessary
resources for the Affordable Care Act. Now, this is a bill that is law.
This is a bill that is impacting 16 million Americans, and 7.3 million
people have gotten the tax credits.
I would ask the gentleman from Missouri what the impact would be on
7.3 million taxpayers if we had no money available to implement the
Affordable Care Act.
I yield to the gentleman from Missouri.
Mr. SMITH of Missouri. Mr. Speaker, the question that we have before
us is: Did we appropriate adequate funding for taxpayer services?
Mr. BLUMENAUER. In reclaiming my time, I am asking the gentleman:
What would be the impact on the 7.3 million people who are claiming the
tax credit under the Affordable Care Act, which you have not yet
repealed and which still is the law of the land? What would the impact
be on them if you had your way and there was no money?
I yield to the gentleman from Missouri.
Mr. SMITH of Missouri. Mr. Speaker, the law of the land is Article I
of the Constitution. Congress has the power of the purse to appropriate
funds, and Congress appropriated the funds in 2016, but the IRS is not
following that appropriately. This is wrong.
Mr. BLUMENAUER. In reclaiming my time, if I may reframe the question,
because I am not trying to trick the gentleman. I want to know what the
impact would be on 7.3 million people if there were no money available
to implement the Affordable Care Act.
I yield to the gentleman from Missouri.
Mr. SMITH of Missouri. Mr. Speaker, what I am talking about is that
Congress appropriated the necessary resources. The gentleman is talking
about there being over $11 billion to the IRS, and they cannot
appropriate the funds correctly.
Mr. BLUMENAUER. Mr. Speaker, in reclaiming my time, I would
appreciate the gentleman, on his own time, elaborating on this, and the
gentleman is not answering.
What would be the impact, as the gentleman said in his opening
statement, if the money were not allocated to implement the Affordable
Care Act? It is sort of a backdoor way via the budget process, which
you can control, to defund the Affordable Care Act.
The fact is, for those 7.3 million people who get the tax credit and
for the over 17 million Americans who have received health care under
the Affordable Care Act, being able to implement the law is customer
service. I would think that my Republican friends would become very
cranky if the bureaucracy in the IRS just decided that they weren't
going to implement part of the law. So what the IRS has done within
some areas that it does have budgetary discretion is to make sure that
there are adequate people to try and implement these provisions.
{time} 1245
Now, it is true that the Tax Code becomes more and more complex, but
that is not the fault of the IRS. Those are the people who are charged
with implementing what Congress does.
Since I have been in Congress--and my Republican friends have been in
charge most of this time--the Tax Code has become longer, more complex,
even as they have cut back the resources to that critical agency.
What business assaults its accounts receivable department?
The Internal Revenue Service is the largest customer service agency
in the world, and they have a very difficult job because Congress in
the last 25 years has cut 30,000 people out of the workforce. In the
last 10 years, we have seen an additional reduction.
I am glad that our Republican friends were embarrassed because of
their continued cuts to the IRS budget and the service got so bad that
they restored almost $300 million.
But it is not, by any stretch of the imagination, enough to give the
service that we want, and it does not make up for the fact that the IRS
has a legal obligation to administer the Affordable Care Act, which is
still on the books, which is serving millions of Americans and has
become more complex and actually more onerous for individual taxpayers.
Remember, they have made changes to make a sharper cliff if people
make a mistake in the estimate of their income because it is graduated.
You get less help the more money you make.
Under the Republican assault on the Affordable Care Act, there is
more of a cliff that faces people if they have a change in
circumstance. If they misallocate, if they lose a job, if they get a
bonus, that can have significant consequences.
Mr. Speaker, the United States Internal Revenue Service has been a
whipping boy for everybody. This a service that people love to hate.
Republicans have taken their war against taxes to high art by
assaulting the IRS, making it hard to serve, and attacking it
repeatedly.
Mr. Speaker, this has significant consequences. The United States
relies on voluntary compliance from the taxpayers. Every 1 percent less
voluntary compliance costs the taxpayers $30 billion that could be used
to reduce the deficit or to pay for badly needed services or maybe
rebuild our fraying infrastructure. This has consequences.
Now, I would respectfully suggest that this is a cut of a half
billion dollars to a budget that is already stressed and can't deal
with the needs of today.
People in the IRS are dealing with a computer system that those of
you who took computer science in the 1960s--I didn't--but you would
feel comfortable with some of the programming language they have.
It is hopelessly out of date. The employees are overwhelmed on the
phone lines. And Congress keeps changing the Tax Code.
Taking away a half billion dollars in user fees and throwing it into
the general fund makes it very unlikely that it will be available for
the priorities that are going to be necessary to administer the IRS.
My friend doesn't care if the Affordable Care Act is not
administered. In fact, he would rather that it not be administered, but
that is not the law. That is not fair to the taxpayers.
Taking away these user fees, putting it in the appropriations
process, is going to have sort of a grab bag in Congress for those
moneys, and I don't know where those would end up.
[[Page H1866]]
But given the composition and the attitude of the people who control
it now, it wouldn't be available to administer the Affordable Care Act,
something the IRS is obligated to do and which we owe to the American
people.
I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I yield 2 minutes to the
gentleman from Texas (Mr. Babin).
Mr. BABIN. Mr. Speaker, the American people are fed up with the IRS
and rightfully so. With such a troubled and incompetent record, it is
hard to imagine how anyone could trust this corrupt agency.
This week the House will take action, thanks in large part to my
friend and colleague from Missouri (Mr. Smith). We will pass a series
of bills to rein in the IRS and bring much-needed accountability to
this broken and dysfunctional agency.
We will take steps to end the politicization of the IRS, which has
illegally and intentionally targeted conservative Americans.
We will vote to eliminate the IRS slush fund--and I call it a slush
fund--that has allowed this agency to skirt congressional authority.
We will vote to make sure that IRS employees are held to the same
standards as the taxpayers by firing those who are delinquent in their
own taxes.
These are commonsense steps that need to be taken, but we cannot
truly solve these problems and bring real change to the Internal
Revenue Service under the current leadership of Commissioner John
Koskinen.
Mr. Koskinen has blatantly lied under oath and misled congressional
investigators. He has supported Lois Lerner's track record of deceit
and obstruction. It is time for him to go.
As a cosponsor of legislation to impeach Commissioner Koskinen, I
call on congressional leaders to bring that bill forward as well.
American taxpayers deserve much better than they are getting, and we
need to turn the page on Mr. Koskinen's failed leadership.
Mr. BLUMENAUER. Mr. Speaker, I yield 3 minutes to the gentleman from
Texas (Mr. Doggett), a senior member of the Ways and Means Committee
and someone who understands the value of protecting the Federal
Government's accounts receivable department.
Mr. DOGGETT. Mr. Speaker, Monday, as all Americans know, was, of
course, Tax Day. Today should be officially designated as ``Republican
Tax Distraction Day'' because that is exactly what is going on here.
Rather than address the many inequities and complexities in our tax
system, Republicans distract by attacking the tax collector, which is
one of the oldest tactics around that goes back, I guess, many
civilizations.
I believe it was Mark Twain who suggested the difference between a
taxidermist and a tax collector is that the taxidermist only takes your
skin.
The problem we have today is that there are many of our largest and
most profitable corporations that don't have any skin in the game.
For the patriotic taxpayers that were out there last weekend trying
to figure out how they would complete their taxes and how they would
make the payments or who were lined up on Monday night at the post
office to make their payments--those taxpayers have a lot of boxes on
their tax form, but they don't have one that they can check that shifts
their income off to some offshore tax haven. They can't decide that
they will just defer paying on some of their income until they feel
like it.
Yet, some of America's largest and most profitable companies use just
these type of tax loopholes to dramatically lower their tax bill. These
Republicans, especially on the House Ways and Means Committee, have
shown no interest in addressing the problem whatsoever.
Only last week a major development before this Republican tax
development was a report that found that 20 percent of large,
profitable corporations paid no Federal income tax in 2012, the last
year of the survey.
That is no. That is none. That is zero. That is zilch. It is not what
those folks that were working last weekend trying to figure out their
taxes were faced with, but it is what is occurring.
If Republicans were serious about making the Internal Revenue Service
work better, they would be addressing injustices like this instead of
making it worse by slashing the IRS budget. Shorting that budget is
short-circuiting the collection of taxes from all those people that are
out there trying to dodge their taxes.
Under these Republican budgets, almost one in four of the enforcement
tax staff at the IRS have been eliminated over the last 7 years. Every
additional dollar that we spend on tax enforcement yields an estimated
$4 in increased revenue.
Even a remarkable return on investment like that is modest compared
to the return that America's largest corporations are getting by
lobbying this Congress and participating in the political process.
Oxfam America this month reported that tax dodging by multinationals is
costing the United States perhaps as much as $111 billion each year.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. BLUMENAUER. Mr. Speaker, I yield an additional 1 minute to the
gentleman from Texas.
Mr. DOGGETT. Mr. Speaker, recovering that revenue could pay for the
entire budget of The National Institutes of Health, the Centers for
Disease Control, and the Department of Education.
Tax dodging is not a victimless crime. It is like those seaside
resorts where you hear: Grandpa went to the Caymans and all I got was
this lousy T-shirt.
Well, you don't get a T-shirt out of this kind of tax dodging, but
you do get a tax bill, because the hardworking American families and
small businesses that are picking up the tab for all of those loopholes
are having to pay more than their fair share.
What we should be doing on this Republican Tax Distraction Day is
getting about those loopholes and seeing that the IRS enforces our laws
fairly and equitably. That is not being done today.
This and the rest of this package should be rejected in favor of a
system that is fair to all Americans.
Mr. SMITH of Missouri. Mr. Speaker, I yield 2 minutes to the fine
gentleman from Nebraska (Mr. Smith).
Mr. SMITH of Nebraska. Mr. Speaker, I want to point out that most
folks in this room today and right now understand that there is an
effort underway to pursue tax reform, to make our Tax Code simpler,
easier to enforce, and to actually prevent the need to even pass
legislation such as the IRS OWES Act.
Until such time, we need legislation like this because it will bring
much-needed transparency to an agency with a proven track record of
poor management.
The IRS' offenses include targeting taxpayers and irresponsibly
directing resources away from its core function of taxpayer services,
resulting in the abysmal 2015 tax filing system.
It has probably been said in this room before, but this simple bill
would subject IRS user fees to congressional oversight by directing
them to the Treasury's general fund and subjecting them to the
congressional appropriations process.
In 2014, the IRS only used 44 percent of its user fees account on
taxpayer services. Last year this number dropped significantly, with
the IRS using only 10 percent of its user fees account on taxpayer
services.
American taxpayers all over the country felt the pain of that choice
last year. Our tax system depends on voluntary compliance. Poor
taxpayer assistance like the IRS provided last year would likely
encourage taxpayers to perhaps cheat and actually make it more
difficult for taxpayers to even comply.
According to a GAO report, last year only 38 percent of callers
wanting to speak to an IRS representative were able to reach one. This
is unacceptable from an agency whose core function is revenue
collection.
H.R. 4885 will strengthen congressional oversight over the IRS not by
limiting funding, but by ensuring the IRS uses its funding for its core
functions of revenue collection and taxpayer assistance and not for
unrelated purposes, which make it harder for taxpayers to comply with
an already complicated Tax Code.
Mr. BLUMENAUER. Will the gentleman yield?
Mr. SMITH of Nebraska. I yield to the gentleman from Oregon.
Mr. BLUMENAUER. Who are the 7.3 million people who get the tax credit
[[Page H1867]]
under the Affordable Care Act? Does helping them fall within your
definition of taxpayer assistance?
Mr. SMITH of Nebraska. I don't want innocent people to be hurt. And
with what has taken place at the IRS, I would hope all of us would
agree it is unacceptable.
Mr. BLUMENAUER. Let me rephrase my question:
Does assisting the 7.3 million people who get tax credits under the
Affordable Care Act qualify in your definition of taxpayer assistance?
Mr. SMITH of Nebraska. Well, I don't have the actual definition at
the top of my mind. But, clearly, the IRS has chosen priorities--some
over others--that I think----
Mr. BLUMENAUER. If I have more time later, I would be happy to be
involved in a colloquy with you on this.
Mr. SMITH of Nebraska. Mr. Speaker, I urge the passage of this bill.
{time} 1300
Mr. BLUMENAUER. Mr. Speaker, I yield myself 20 seconds.
It is striking that somehow giving assistance to 7.3 million people
who get the tax credits--16 million people who are under the Affordable
Care Act--to implement that does not fall within the definition of
taxpayer assistance. And my friends, Smith, neither one of them, could
actually answer that, and I think it is telling.
Mr. Speaker, I yield 4 minutes to the gentleman from California (Mr.
Becerra), the distinguished leader of the Democratic Caucus and a
senior member of the Committee on Ways and Means, who thinks that we
ought to provide service to our taxpayers.
Mr. BECERRA. Mr. Speaker, one of the easiest things you can do to get
people to cheer for you is to bash someone or something that everyone
loves to hate, as you have heard it said before. I don't know if there
is a better example of this than the IRS. Everyone loves to hate the
IRS.
At the end of the day, though, if you want to have our troops paid,
if you want to have our security handled at our airports, if you want
to make sure that our national parks are protected, you need to have
the revenues; and so we need the IRS so that all of us who voluntarily
are supposed to pay our taxes do so and pay our fair share.
Again, we could all point to the story of the case where the IRS
flubbed it, didn't do a good job, and so it is easy to pile on. If we
could create a pinata that looked like the IRS, I guarantee you it
would be the hottest selling pinata in the history of pinata making. So
let's just put that on the table. Let's grant that to everyone. It is
easy to bash the IRS.
Let's go to this bill, though. What will this bill do?
First, it does some really strange things, and then it does some
really harmful things. But worse than that, it is never going to become
law. So we are spending time talking about something that is never
going to become law.
But on what the bill does, let me give you a clear example of why it
is so unfortunate that we do this IRS bashing. One of these provisions
tells the IRS that it cannot retain the dollars it collects as user
fees for having provided services to individuals or corporations that
seek out special services from the IRS.
You have got a big corporation; you just broke it up into pieces; you
want to make sure you are filing your taxes correctly. You need a
special advisory opinion from the IRS, which isn't something they
typically do for most Americans, so they say: Well, that is extra
stuff; we are going to have to charge you a user fee for having done
that for you.
Principally, these user fees come from wealthier companies or
wealthier individuals who have more complicated tax filings that they
have to submit. We charge them that because not every American has to
request that kind of service from the IRS. IRS collects that fee.
This bill says: IRS, you don't get to keep the money, even though you
had to provide the service and pull your resources and your personnel
from doing the regular taxpayers' filings and examining those to do
this special work. You cannot keep that even though you expended
resources to do that work.
The best way I could compare it is to a situation I encountered
recently. I participated in a funeral service, and it was a very
dignified service. At the end of the service in the place of worship in
the church, we all caravanned together with the hearse and the family
of the deceased individual to the cemetery. It was a long line of
vehicles. It was a great service. A lot of people showed up.
We were fortunate to have the assistance of police officers who
directed traffic because we went through a whole bunch of
intersections. We had to make sure that, to the degree possible, we
didn't disrupt traffic a whole lot and we didn't have a whole bunch of
accidents on the way to the cemetery. It all worked out perfectly. At
the end, once we reached the cemetery, the officers left.
Now, the officers did that job not because that is the usual course
of business for police officers in our cities and our counties. They
did that because the police department offers that service so that we
don't disrupt the greater activity around our city when there is a
funeral. That way you offer the dignity to that family as well in the
services for that deceased individual. You pay for that service to the
police department because you pulled police officers off their regular
beat to do that work. That is a user fee.
The SPEAKER pro tempore (Mr. Rothfus). The time of the gentleman has
expired.
Mr. BLUMENAUER. Mr. Speaker, I yield the gentleman an additional 1
minute.
Mr. BECERRA. Mr. Speaker, this bill's proposal on user fees is
tantamount to telling the police department: You must provide that
service for people to be able to have their funeral service, but you
will not get compensated for your police officers being pulled from
their regular duty of protecting our streets to help with that funeral
service.
It is inane. It is crazy to do that. So rather than do bills that are
going to go nowhere, let's get our job done. We get elected to do some
very important things. On the tax side, we certainly could do what Mr.
Doggett mentioned earlier. Let's go after those Benedict Arnolds who
decide they are going to leave the country not because they want to go
live somewhere else, it is that they don't want to pay taxes in
America. So they are going to leave their place of legal residency as
America. They are still going to have their home here, but they are
just going to call home somewhere else for legal purposes so they don't
pay taxes. Billions of dollars we are losing, we know, as a result of
corporations and all our wealthy individuals incorporating in places
like the Cayman Islands.
Secondly, all the money that is being spent in campaigns today is
being done by what are called not-for-profit organizations that we used
to think used to do social welfare.
Now guess what they are doing?
They are spending their money on campaigns. We need to stop that as
well. That is what we should be doing--doing our job, not taking money
out of an agency that is trying to make sure that we do this the right
way for everyone who pays their fair share of taxes.
Mr. SMITH of Missouri. Mr. Speaker, I reserve the balance of my time.
Mr. BLUMENAUER. Mr. Speaker, I yield myself such time as I may
consume.
I hope that there is an opportunity here for us to take a hard look
at some of the issues surrounding the Republican assault on the IRS. We
have documented that they have dramatically cut not just the resources,
but the ability of people to implement it. There has been a refusal to
hire people in some cases who make for the government $5,000 an hour or
more.
Now, these are people who would be dealing with audits for the people
who, you know, for one reason or another give themselves the benefit of
the doubt when it comes to filling out the tax form. So this audit
function makes a significant amount of money for the taxpayers, money
that doesn't have to come from increased taxes or reduced services.
Mr. Speaker, there is a tax gap. It is well known and well
documented, $400 to $450 billion or more a year. Being able to
adequately fund the Internal Revenue Service will enable the government
to deal with an amount of money that is due and payable and owing, and
it is usually because they have more money to lose track of or to be
able to have different alternatives for how they characterize it or how
[[Page H1868]]
they choose to move forward. It tends to be larger, they tend to be
business enterprises and people who have more money.
But it is not just dealing with the audit function. I had a
fascinating roundtable discussion in my hometown last month where I had
attorneys and accountants who specialize in the practice dealing with
tax practices. They were lamenting the problems, not just the fact that
there isn't effective audits anymore. They think there are very few.
But it is more fundamental than that.
They often will look one of their clients in the eye and say: Yes,
you are right, there is a problem. The mistake is in your favor, but
because the service level has been allowed to deteriorate so badly, it
will cost you more money in my fees to get the $500 or $2,000 error
corrected.
That just makes one cringe. Now, the notice that somehow putting
money to implement the Affordable Care Act is not customer service is
ludicrous, and I tried to get my friends on the other side of the aisle
to talk to me about customer service.
How is it not customer service to help people with the tax credits
that are involved with the Affordable Care Act, which over 7 million
people get?
How is it not customer service to make sure that it is administered
fairly for over 16 million people who fall under the Affordable Care
Act?
Absolutely it is. This $500 million cut would further degrade the
ability to provide the service that not only should we require, but our
employees in the IRS want. I would strongly urge the rejection of this
ill-guided proposal.
Mr. Speaker, I yield back the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I yield myself the balance of my
time.
The IRS has not shown this body, they have not shown the Missourians
that I represent, and they have not shown all of the American taxpayers
that they have been good stewards of user fees. They have a slush fund
of nearly $500 million. This body, over a course since fiscal year
2013, has not cut $1; not $1 has this body cut in assistance to
taxpayer services to the IRS.
The Commissioner yesterday testified before the Committee on Ways and
Means and said that he is the one who cut $134 million last year alone
in taxpayer services. The government is supposed to help serve the
people. The people are not supposed to serve the government.
Mr. Speaker, there should not be one agency that is independent of
Congress. Agencies were created by Congress. They should be funded by
Congress. And no agency should have a $500 million slush fund that they
can decide to spend the money any way that they want. This is not an
uncommon practice for us to require agencies, when they collect user
fees, to have congressional oversight and to be subject to
appropriations. We are just trying to make sure that the IRS is held
accountable, like numerous other agencies.
Mr. Speaker, I ask the body to support this great piece of
legislation.
I yield back the balance of my time.
The SPEAKER pro tempore. All time for debate has expired.
Pursuant to House Resolution 687, the previous question is ordered on
the bill, as amended.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. BLUMENAUER. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this question will be postponed.
____________________