[House Report 117-523]
[From the U.S. Government Publishing Office]


117th Congress }                                          { Report
                        HOUSE OF REPRESENTATIVES
  2d Session   }                                          { 117-523

======================================================================
 
   RESOLUTION OF INQUIRY DIRECTING THE SECRETARY OF THE TREASURY TO 
PROVIDE TO THE HOUSE OF REPRESENTATIVES A COPY OF THE INTERNAL REVENUE 
   SERVICE SMALL BUSINESS/SELF EMPLOYED DIVISION DECISION MEMORANDUM 
   REGARDING THE DECISION TO DESTROY APPROXIMATELY 30,000,000 PAPER 
   INFORMATION RETURNS AROUND THE TIME OF MARCH 2021, AND ANY OTHER 
MEMORANDUM RELATED TO THE DECISION TO DESTROY THOSE INFORMATION RETURNS

                                _______
                                

 September 28, 2022.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

Mr. Neal, from the Committee on Ways and Means, submitted the following

                             ADVERSE REPORT

                             together with

                            DISSENTING VIEWS

                      [To accompany H. Res. 1283]

    The Committee on Ways and Means, to whom was referred the 
resolution (H. Res. 1283) of inquiry directing the Secretary of 
the Treasury to provide to the House of Representatives a copy 
of the Internal Revenue Service Small Business/Self Employed 
Division Decision Memorandum regarding the decision to destroy 
approximately 30,000,000 paper information returns around the 
time of March 2021, and any other memorandum related to the 
decision to destroy those information returns, having 
considered the same, reports unfavorably thereon without 
amendment and recommends that the resolution not be agreed to.

                                CONTENTS

                                                                   Page
                                                                   
  I.  SUMMARY AND BACKGROUND..........................................2
          A. Purpose and Summary.................................     2
          B. Background and Need for Legislation.................     2
          C. Legislative History.................................     3
 II.  EXPLANATION OF THE BILL.........................................3
III.  VOTES OF THE COMMITTEE..........................................3
 IV.  BUDGET EFFECTS OF THE BILL......................................4
          A. Committee Estimate of Budgetary Effects.............     4
          B. Statement Regarding New Budget Authority and Tax 
              Expenditures Budget Authority......................     4
          C. Cost Estimate Prepared by the Congressional Budget 
              Office.............................................     4
  V.  OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE......4
          A. Committee Oversight Findings and Recommendations....     4
          B. Statement of General Performance Goals and 
              Objectives.........................................     4
          C. Information Relating to Unfunded Mandates...........     5
          D. Advisory Committee Statement........................     5
          E. Applicability to Legislative Branch.................     5
          F. Congressional Earmarks, Limited Tax Benefits, and 
              Limited Tariff Benefits............................     5
          G. Hearings............................................     5
          H. Applicability of House Rule XXI, Clause 5(b)........     5
          I. Tax Complexity Analysis.............................     5
          J. Duplication of Federal Programs.....................     6
 VI.  CHANGES IN EXISTING LAW MADE BY THE BILL........................6
VII.  DISSENTING VIEWS................................................7

                       I. SUMMARY AND BACKGROUND


                         A. Purpose and Summary

    H. Res. 1283 requests that the Secretary of the Treasury 
provide the House of Representatives with a copy of the 
Internal Revenue Service Small Business/Self Employed Division 
Decision Memorandum regarding the decision to destroy 
approximately 30,000,000 paper information returns around the 
time of March 2021, and any other memorandum related to the 
decision to destroy those information returns.

                 B. Background and Need for Legislation

    On July 26, 2022, H. Res. 1283 was introduced by 
Representative Tom Rice (for himself and Mr. Brady). H. Res. 
1283 is a resolution of inquiry, which is a method infrequently 
used by the House of Representatives to obtain certain factual 
information from the Executive Branch. Under clause 7 of rule 
XIII, a resolution of inquiry is subject to a motion to 
discharge from committee if the resolution is not reported by 
the committee to which it was referred within 14 legislative 
days of its introduction. Accordingly, the Committee on Ways 
and Means scheduled a markup of H. Res. 1283 within the 14-day 
period.
    The Committee reported the resolution unfavorably because, 
among other flaws, the IRS told the Committee that the document 
sought by this resolution would wholly jeopardize voluntary 
compliance and release of the document would represent a 
significant risk to the agency.
    In September 2021, the Treasury Inspector General for Tax 
Administration publicly reported that the IRS destroyed about 
30 million paper information returns earlier that year. These 
information returns were primarily from tax year 2019 and were 
to be processed in 2020. They were destroyed because the IRS's 
antiquated systems did not allow these returns to be processed 
after the end of that year. The IRS also needed to use the same 
computer system to process business returns needed to provide 
COVID relief, which had a higher priority at the end of 2020.
    The returns destroyed amounted to less than one percent of 
the 3.2 billion information returns processed by the IRS in 
2020. The IRS has stated that the destruction of these forms 
will have no impact on taxpayers. The IRS also provided an 
extensive bipartisan briefing to the Committee on this matter.
    This resolution does nothing to help everyday Americans put 
food on the table, pay their bills, or take care of their 
families. Committee Democrats are focused on legislation and 
policies that help women, families, seniors, and all Americans. 
For these reasons, the Committee reported the resolution 
adversely.

                         C. Legislative History


Background

    H. Res. 1283 was introduced by Representative Tom Rice on 
July 26, 2022 (for himself and Mr. Brady) and was referred to 
the Committee on Ways and Means.

Committee hearings

    The Committee on Ways and Means held no hearings on H. Res. 
1283.

Committee action

    The Committee on Ways and Means marked up H. Res. 1283 on 
September 20, 2022, and ordered the resolution reported 
adversely (with a quorum being present) by a roll call vote.

                      II. EXPLANATION OF THE BILL

    H. Res. 1283 directs the Secretary of the Treasury to 
provide to the House of Representatives, within 14 days of 
adoption, a copy of the IRS Small Business/Self-Employed 
Division memorandum, and any other relevant memorandum 
regarding the decision to destroy approximately 30 million 
paper information returns around the time of March 2021. The 
Secretary is required to provide these items with limited 
redactions as necessary to protect IRS methods so as not to 
jeopardize voluntary compliance if publicly disclosed.

                      III. VOTES OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the vote of the Committee on Ways and Means in its 
consideration of H. Res. 1283 on September 20, 2022.
    The resolution, H. Res. 1283, ``Of inquiry directing the 
Secretary of the Treasury to provide to the House of 
Representatives a copy of the Internal Revenue Service Small 
Business/Self Employed Division Decision Memorandum regarding 
the decision to destroy approximately 30,000,000 paper 
information returns around the time of March 2021, and any 
other memorandum related to the decision to destroy those 
information returns.,'' was ordered adversely reported to the 
House of Representatives by a recorded vote (with a quorum 
being present) of 24 yeas to 17 nays:

----------------------------------------------------------------------------------------------------------------
         Representative             Yea       Nay     Present     Representative      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Doggett....................        X   ........  .........  Mr. Brady........  ........        X   .........
Mr. Thompson...................        X   ........  .........  Mr. Buchanan.....  ........        X   .........
Mr. Larson.....................        X   ........  .........  Mr. Smith (NE)...  ........        X   .........
Mr. Blumenauer.................        X   ........  .........  Mr. Kelly........  ........        X   .........
Mr. Kind.......................        X   ........  .........  Mr. Smith (MO)...  ........        X   .........
Mr. Pascrell...................        X   ........  .........  Mr. Rice.........  ........        X   .........
Mr. Davis......................        X   ........  .........  Mr. Schweikert...  ........        X   .........
Ms. Sanchez....................        X   ........  .........  Mr. LaHood.......  ........        X   .........
Mr. Higgins....................        X   ........  .........  Dr. Wenstrup.....  ........        X   .........
Ms. Sewell.....................        X   ........  .........  Mr. Arrington....  ........        X   .........
Ms. DelBene....................        X   ........  .........  Dr. Ferguson.....  ........        X   .........
Ms. Chu........................        X   ........  .........  Mr. Estes........  ........        X   .........
Ms. Moore......................        X   ........  .........  Mr. Smucker......  ........        X   .........
Mr. Kildee.....................        X   ........  .........  Mr. Hern.........  ........        X   .........
Mr. Boyle......................        X   ........  .........  Mrs. Miller......  ........        X   .........
Mr. Beyer......................  ........  ........  .........  Dr. Murphy.......  ........        X   .........
Mr. Evans......................        X   ........  .........  Mr. Kustoff......  ........        X   .........
Mr. Schneider..................        X   ........  .........  .................  ........  ........  .........
Mr. Suozzi.....................        X   ........  .........  .................  ........  ........  .........
Mr. Panetta....................        X   ........  .........  .................  ........  ........  .........
Mrs. Murphy....................        X   ........  .........  .................  ........  ........  .........
Mr. Gomez......................        X   ........  .........  .................  ........  ........  .........
Mr. Horsford...................        X   ........  .........  .................  ........  ........  .........
Ms. Plaskett...................        X   ........  .........  .................  ........  ........  .........
Chairman Neal..................        X   ........  .........  .................  ........  ........  .........
    Totals.....................       24   ........  .........      Totals.......  ........       17   .........
----------------------------------------------------------------------------------------------------------------

                     IV. BUDGET EFFECTS OF THE BILL


               A. Committee Estimate of Budgetary Effects

    In compliance with clause 3(d) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
Congressional Budget Office did not provide a cost estimate of 
the resolution.

B. Statement Regarding New Budget Authority and Tax Expenditures Budget 
                               Authority

    Pursuant to clause 3(c)(2) of rule XIII of the Rules of the 
House of Representatives, the Committee states that the 
resolution involves no new or increased budget authority. The 
Committee further states that the resolution involves no new 
tax expenditure.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee advises that the 
Congressional Budget Office did not provide a cost estimate of 
the resolution.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE


          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee made findings and recommendations that are 
reflected in this report.

        B. Statement of General Performance Goals and Objectives

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
resolution contains no measure that authorizes funding. 
Therefore, no statement of general performance goals and 
objectives is required.

              C. Information Relating to Unfunded Mandates

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
    The Committee has determined that the resolution does not 
contain Federal mandates on the private sector. The Committee 
has determined that the resolution does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

                    D. Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by the 
resolution.

                 E. Applicability to Legislative Branch

    The Committee finds that the resolution does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(2) of the Congressional Accountability Act.

  F. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
                                Benefits

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the resolution, and states that the 
provisions of the resolution do not contain any congressional 
earmarks, limited tax benefits, or limited tariff benefits 
within the meaning of the rule.

                              G. Hearings

    In relation to compliance with clause 3(c)(6) of rule XIII 
of the Rules of the House of Representatives, the Committee 
states that no hearings were held on this resolution.

            H. Applicability of House Rule XXI, Clause 5(b)

    Clause 5(b) of rule XXI of the Rules of the House of 
Representatives provides, in part, that ``It shall not be in 
order to consider a bill, joint resolution, amendment, or 
conference report carrying a retroactive Federal income tax 
rate increase.'' The Committee, after careful review, states 
that the resolution does not involve any retroactive Federal 
income tax rate increase within the meaning of the rule.

                       I. Tax Complexity Analysis

    Section 4022(b) of Pub. L. No. 105-266, the Internal 
Revenue Service Restructuring and Reform Act of 1998 (the 
``RRA''), requires the staff of the Joint Committee on Taxation 
(in consultation with the Internal Revenue Service and the 
Treasury Department) to provide a tax complexity analysis. The 
complexity analysis is required for all legislation reported by 
the Senate Committee on Finance, the House Committee on Ways 
and Means, or any committee of conference if the legislation 
includes a provision that directly or indirectly amends the 
Internal Revenue Code of 1986 and has widespread applicability 
to individuals or small businesses.
    Pursuant to clause 3(h)(1) of rule XIII of the Rules of the 
House of Representatives, the staff of the Joint Committee on 
Taxation has determined that a complexity analysis is not 
required under section 4022(b) of the RRA because the 
resolution contains no provision that amends the Internal 
Revenue Code of 1986 and has ``widespread applicability'' to 
individuals or small businesses within the meaning of the rule.

                   J. Duplication of Federal Programs

    In compliance with clause 3(c)(5) of rule XIII of the Rules 
of the House of Representatives, the Committee states that no 
provision of the resolution establishes or reauthorizes: (1) a 
program of the Federal Government known to be duplicative of 
another Federal program; (2) a program included in any report 
to Congress pursuant to section 21 of Pub. L. No. 111-139; or 
(3) a program related to a program identified in the most 
recent Catalog of Federal Domestic Assistance, published 
pursuant to section 6104 of title 31, United States Code.

              VI. CHANGES IN EXISTING LAW MADE BY THE BILL

    Pursuant to clause 3(e)(1)(B) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that H. 
Res. 1283 does not make any changes to existing law.

                         VII. DISSENTING VIEWS

    Committee Republicans strongly oppose the Committee's 
action of unfavorably reporting H. Res. 1283, Resolution of 
inquiry directing the Secretary of the Treasury to provide to 
the House of Representatives a copy of the Internal Revenue 
Service Small Business/Self Employed Division Decision 
Memorandum regarding the decision to destroy approximately 
30,000,000 paper information returns around the time of March 
2021, and any other memorandum related to the decision to 
destroy those information returns.
    Congressional oversight is one of the most important 
responsibilities of the U.S. Congress, and Resolutions of 
Inquiry (ROIs) are one of the methods used by the U.S. House of 
Representatives to obtain information from the executive 
branch. ROIs simply demand that the administration turn over 
basic information to Congress. This information is critical 
because it allows the Congress the ensure the executive 
branch's compliance with congressional intent; evaluate program 
performance; prevent the executive branch's encroachment on the 
legislative branch's powers; assess an agency's ability to 
manage and carry out program objectives; and acquire 
information from the executive branch that can inform 
policymaking.
    Moreover, Congressional Republicans have repeatedly sought 
information from the Administration about the expected and 
actual impact of these policies. Transparency is essential 
because it promotes accountability and provides information for 
the Congress and Americans about what the federal government is 
doing. Despite the Biden Administration stating that President 
Biden would ``bring transparency and truth back to the 
government to share the truth, even when it's hard to hear,'' 
the Administration has ignored the need for congressional 
oversight and completely failed on its promise. The American 
people deserve to know how their government works and we will 
hold the Biden Administration accountable for its disastrous 
policies.
    On May 4, 2022, the Treasury Inspector General for Tax 
Administration (TIGTA) published a report\1\ discussing 
Internal Revenue Service (IRS) operations as follows: ``[t]he 
continued inability to process backlogs of paper-filed tax 
returns contributed to management's decision to destroy an 
estimated 30 million paper-filed information return documents 
in March 2021.'' This report garnered press attention and 
Republican Committee staff began investigating this decision.
---------------------------------------------------------------------------
    \1\Treasury Inspector General for Tax Administration, A Service-
Wide Strategy Is Needed to Address Challenges Limiting Growth in 
Business Tax Return Electronic Filing, Report No. 2022-40-036 (May 4, 
2022), available at https://www.treasury.gov/tigta/auditreports/
2022reports/202240036fr.pdf.
---------------------------------------------------------------------------
    During a briefing from TIGTA, Committee staff learned that 
the IRS has in its possession a decision memorandum regarding 
the decision to destroy the 30 million paper-filed information 
returns that was put together at least in part by the Small 
Business/Self Employed Division. The IRS has declined to 
provide the Committee with a copy of the document despite 
multiple requests in writing, claiming that ``release'' of the 
document would reveal methods and pose a significant risk to 
the agency. Moreover, despite Committee's willingness to work 
with the IRS to reach some sort of accommodation, the IRS did 
not make itself available to schedule a call with committee 
staff nor did the agency suggest any alternatives or 
accommodations such as allowing review of the document in a 
confidential setting. In doing so, the Administration is 
preventing Congress from conducting basic oversight to 
understand the agency's decision-making process around the 
destruction of tax return information.
    This lack of cooperation from the Administration is 
unacceptable, especially since this Committee has a clear 
oversight role when it comes to the IRS and the decision to 
destroy these paper returns warrants serious, substantive 
review. Given the clear need for oversight on this issue it is 
disappointing that Committee Democrats have blocked the request 
for this information.

                                   Kevin Brady,
                                           Ranking Member.
                                   Tom Rice.

                                  [all]