[Congressional Record Volume 168, Number 197 (Monday, December 19, 2022)]
[Senate]
[Pages S7277-S7278]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                        Internal Revenue Service

  Mr. GRASSLEY. Madam President, earlier this summer, my Democratic 
colleagues got through on reconciliation--a strictly partisan way--a 
bill that provided that the IRS would get $80 billion in mandatory 
funding, which was meant to double the size of the IRS by 87,000 
employees.
  This additional $80 billion, which comes on top of its annual 
appropriation, is over six times more than it received through annual 
appropriations in 2022. Now, I expect, in the new Congress, starting 
January 3 next year, there is going to be an attempt to reduce the $80 
billion and not go for the 87,000 additional employees. I favor doing 
just that.
  However, in the meantime, the $80 billion and the 87,000 employees is 
law, and so this unprecedented increase in funding demands that 
Congress have a comparable increase in congressional oversight of the 
IRS--exacting and unyielding oversight, to be precise. After all, we 
are talking about 87,000 new employees.
  To begin this oversight, Finance Committee Republicans, including 
this Senator, sent a letter to the Government Accountability Office in 
October in pursuit of this oversight. In that letter, we asked for 
information on outstanding issues that the Government Accountability 
Office has identified at the Internal Revenue Service and the status of 
recommendations the IRS has failed to implement.
  The Government Accountability Office responded to that letter at the 
end of November, and, as you might quite expect, there are many ongoing 
and persistent issues. In the November letter, the Government 
Accountability Office notes that the IRS had 41 unimplemented 
recommendations related to information systems control deficiencies at 
the beginning of the fiscal year 2022 audit of IRS's financial 
statements.
  These outstanding recommendations related to information systems 
control deficiencies are especially concerning given the recent 
unauthorized disclosure of taxpayer information, contrary to U.S. code 
section 6103, which guarantees the privacy--or is supposed to guarantee 
the privacy--of your IRS information.
  As you will recall, almost a year and a half ago, ProPublica, a 
publication, published stories based on ``a vast trove of Internal 
Revenue Service data.''
  We are no closer to understanding how ProPublica obtained this 
confidential taxpayer data now than we were in June of 2021. I have 
sent multiple letters to the Internal Revenue Service and to the 
Justice Department requesting updates on their supposed investigations 
on this matter of how did ProPublica get this private information of 
individual taxpayers. Yet these Agencies--the IRS and the Justice 
Department--have failed to provide any information concerning how 
confidential taxpayer information was disclosed or if additional 
taxpayer data remains at risk.
  In fact, just last week, we learned of another confirmed data breach. 
The IRS inadvertently redisclosed information from tax returns filed by 
tax-exempt organizations. This is after the information was already 
improperly disclosed in September. The IRS clearly has a problem, then, 
protecting taxpayer information, as the law requires.
  Now, the 41 information system deficiencies are only a fraction of 
the total open recommendations identified by the Government 
Accountability Office. GAO has said that ``as of November 2022, IRS had 
176 open recommendations. Fully implementing these recommendations 
could significantly improve the IRS's operations.''

[[Page S7278]]

  Despite IRS's shortcomings, my Democratic colleagues handed the IRS 
$80 billion in additional funding without seeing its plan for the funds 
or including the additional oversight. So that is why we are calling on 
additional oversight. It is very important to protect this $80 billion.
  Moreover, my Democratic colleagues have heavily weighted the 
additional funding toward enforcement rather than updating its systems 
or taxpayer services, because you can hardly call the IRS and get a 
live person. If you do, you probably don't get the right answers to 
your questions. So taxpayer service ought to be the No. 1 goal of this 
additional $80 billion instead of enforcement.
  Specifically, more than half of the additional IRS funding is 
dedicated to enforcement, while less than 5 percent is for taxpayer 
services. So you can see that taxpayer services isn't high on the 
agenda of the IRS. The lopsided nature of the IRS funding raises 
legitimate concerns of overly aggressive tax enforcement.
  This is especially true given that 3.2 million tax filers are still 
waiting for the IRS to process their 2022 tax returns. Countless others 
are trying to voluntarily comply with the law but can't get anyone at 
the IRS to answer the telephone. As a result, my office has been 
flooded with calls from frustrated Iowans requesting assistance in 
getting the services they need from the IRS.
  This is a recipe for disaster. While serving on the 1998 IRS 
Restructuring Commission, I heard firsthand from small businesses and 
from individuals about the abusive tactics the IRS can use when 
enforcement takes priority over taxpayer services.
  Given these and other concerns, Senator Thune and I introduced the 
IRS Funding Accountability Act. Our bill would place a moratorium on 
IRS spending its additional funding, other than for taxpayer services, 
until the IRS submits its spending plan to Congress for approval.
  Congress would then have the option to reject the plan.
  If Congress approves the spending plan, the IRS and the Treasury 
would be subject to regular reporting requirements and incur financial 
penalties for noncompliance--in other words, enhancing Congress's 
constitutional responsibility of oversight to see that the money spent 
is intended by Congress.
  As the former chairman of the Senate Finance Committee, I understand 
the necessity for enforcement. Taxpayers should pay what they owe and 
not a penny less or a penny more. During my time on the Finance 
Committee, I have worked to provide the IRS with additional tools to 
identify tax cheats and to collect tax debts that are already due and 
owed. For instance, I helped create the bipartisan IRS Private Debt 
Collection Program, which uses private contractors to track down and 
collect taxes owed to the IRS that they have shelved as a very low 
priority.
  This program has collected nearly $3 billion in net revenue since 
fiscal year 2019, including over 1.3 billion in the fiscal year of 2022 
alone. Every year this program has operated, it has brought more 
revenue into the Treasury.
  Additionally, I offered improvements to the IRS whistleblower program 
in 2006. This program incentivizes whistleblowers to expose tax fraud 
by corporations and high-net worth individuals. Since 2007, this 
program has collected over $6 billion from noncompliant taxpayers.
  Both of these proven programs initially received resistance from the 
IRS. However, I appreciated former Commissioner Rettig's public support 
for both of these programs.
  If President Biden is really committed to closing the tax gap and 
going after wealthy tax cheats, he should encourage his nominee for IRS 
Commissioner, Daniel Werfel, to embrace both of these programs.
  The IRS has significant and persistent issues that need to be 
addressed. Congress must exercise robust and aggressive oversight. This 
is especially true given the outrageous infusion of $80 billion that is 
mostly geared toward enforcement against the taxpayer.
  The IRS must do a better job protecting taxpayer data, provide better 
taxpayer service, and use its existing enforcement tools and regular 
appropriations funding more efficiently. Simply put, that is what the 
taxpayers deserve.