[House Report 118-144]
[From the U.S. Government Publishing Office]


                                                Union Calendar No. 113 
118th Congress   }                                        {     Report 
                        HOUSE OF REPRESENTATIVES
 1st Session     }                                        {    118-144 
_______________________________________________________________________

                                     



SUBMISSION TO THE U.S. HOUSE OF REPRESENTATIVES OF MATERIALS RELATED TO 
        THE TESTIMONY OF INTERNAL REVENUE SERVICE WHISTLEBLOWERS

                               ----------                              

                              R E P O R T

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                        HOUSE OF REPRESENTATIVES

                             together with

                            DISSENTING VIEWS








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 July 17, 2023.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed  
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              

                                                Union Calendar No. 113 
118th Congress   }                                        {     Report 
                        HOUSE OF REPRESENTATIVES
 1st Session     }                                        {    118-144 
_______________________________________________________________________

                                     



SUBMISSION TO THE U.S. HOUSE OF REPRESENTATIVES OF MATERIALS RELATED TO 
        THE TESTIMONY OF INTERNAL REVENUE SERVICE WHISTLEBLOWERS

                               __________

                              R E P O R T

                                 of the

                      COMMITTEE ON WAYS AND MEANS

                        HOUSE OF REPRESENTATIVES

                             together with

                            DISSENTING VIEWS







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 July 17, 2023.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed 
              
                             _________
                              
                 U.S. GOVERNMENT PUBLISHING OFFICE
                 
52-875                   WASHINGTON : 2023
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
                                  House of Representatives,
                                     Washington, DC, July 17, 2023.
    Dear Mr. Speaker: On June 22, 2023, by a vote of 25 to 18, 
the Committee on Ways and Means voted to submit documents 
protected under Internal Revenue Code Section 6103. Dissenting 
views are included.
            Sincerely,
                                               Jason Smith,
                             Chairman, Committee on Ways and Means.   






















                                                Union Calendar No. 113 
118th Congress   }                                        {     Report 
                        HOUSE OF REPRESENTATIVES
 1st Session     }                                        {    118-144 

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

 
SUBMISSION TO THE U.S. HOUSE OF REPRESENTATIVES OF MATERIALS RELATED TO 
        THE TESTIMONY OF INTERNAL REVENUE SERVICE WHISTLEBLOWERS

                                _______
                                

 July 17, 2023.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

     Mr. Smith of Missouri, from the Committee on Ways and Means, 
                        submitted the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

    The Committee on Ways and Means submits to the U.S. House 
of Representatives the following report and materials relating 
to the testimony of Internal Revenue Service whistleblowers, 
having considered the same.

                                CONTENTS

                                                                   Page
  I. SUMMARY AND BACKGROUND......................................     1
          A. Purpose and Summary.................................     1
          B. Background on the Committee's Work..................     2
 II. EXPLANATION OF THE SUBMITTED MATERIALS......................     2
          A. Background on the Submitted Materials...............     2
          B. Description of the Submitted Materials..............     4
III. VOTE OF THE COMMITTEE.......................................     4
 IV. DISSENTING VIEWS............................................     6
Attachment A.....................................................     9

                       I. SUMMARY AND BACKGROUND


                         A. Purpose and Summary

    The Committee on Ways and Means (``Committee'') met in 
closed executive session on June 22, 2023, to consider 
materials protected by 26 U.S.C. Sec. 6103, comprised of the 
transcripts of the interviews of the two Internal Revenue 
Service (``IRS'') whistleblowers, the whistleblowers' 
supplemental materials, and a letter from IRS Commissioner 
Daniel Werfel, dated June 7, 2023. By a recorded vote of 25 to 
18, the Committee favorably adopted the motion to submit these 
materials to the U.S. House of Representatives.

                 B. Background on the Committee's Work

    The Committee has oversight and legislative authority over 
our federal tax laws. With this authority comes the 
responsibility to ensure the IRS is enforcing the laws in a 
fair and impartial manner.
    26 U.S.C. Sec. 6103 makes tax returns and return 
information confidential, subject to specific authorizations or 
exceptions in the statute. The statute anticipates and allows 
for whistleblowers to come forward to share information with 
Congress under 26 U.S.C. Sec. 6103(f)(5) if the whistleblower 
believes such return or return information may relate to 
possible misconduct, maladministration, or taxpayer abuse. 
Specifically, the statute permits a person with access to 
returns or return information to disclose it to the Committee 
or any person designated by the Chairman of the Committee to 
receive such information.
    The same statute provides for a process by which the 
Committee can receive information, consider it, and submit it 
to the House of Representatives. That process has been used 
several times in the Committee's history and twice in recent 
years, both in 2019 and 2022.
    On April 19, 2023, Chairman Smith, Ranking Member Neal, and 
the Chairs and Ranking Members of other House and Senate 
Committees received a letter from counsel for an IRS Criminal 
Supervisory Special Agent (``Whistleblower 1''). That letter 
informed the Committee that Whistleblower 1 wished to make a 
protected disclosure to the Committee, and outlined the nature 
of information the individual wished to share with the 
Committee. Additional information regarding the process by 
which the Committee received the testimony of Whistleblower 1, 
and another IRS employee--an IRS Criminal Investigator--
(``Whistleblower 2'') is detailed in Section II.C of this 
report.
    The allegations brought to the Committee by the two IRS 
whistleblowers raise issues that fall squarely within this 
Committee's jurisdiction and may require additional oversight 
to inform potential legislative solutions.

               II. EXPLANATION OF THE SUBMITTED MATERIALS


                A. Background on the Submitted Materials

    The materials considered during the executive session arose 
out of voluntary testimony provided by two whistleblowers 
employed by the IRS. Chairman Smith, Ranking Member Neal, and 
the Chairs and Ranking Members of other House and Senate 
Committees received a letter on April 19, 2023, from counsel 
for Whistleblower 1. That letter outlined, at a high-level, the 
nature of information the individual wished to share with the 
Committee. The letter indicated that Whistleblower 1 wanted to 
share information that would:
    (1) Contradict sworn testimony provided to Congress by a 
senior political official,
    (2) Identify unmitigated conflicts of interest, and
    (3) Provide examples of politically-motivated preferential 
treatment.
    Counsel for Whistleblower 1 offered to provide a proffer to 
the Committee to outline the nature of the testimony his client 
would provide.
    On May 5, 2023, Committee staff received that attorney 
proffer, which disclosed that the subject of the investigation 
was Robert Hunter Biden. Majority and minority staff were 
designated by the Chairman under 26 U.S.C. Sec. 6103 and both 
majority and minority staff were present at the attorney 
proffer. After receiving the proffer, a voluntary interview of 
Whistleblower 1 was scheduled for May 26, 2023.
    On May 15, 2023, the Committee received another letter from 
Whistleblower 1's legal counsel notifying the Committee that 
Whistleblower 1 and his entire investigative team had been 
removed from the ongoing and sensitive investigation about 
which Whistleblower 1 sought to make a disclosure to Congress. 
The letter notes that the IRS employee was informed that the 
removal occurred at the request of the U.S. Department of 
Justice (``DOJ''). Following that removal, the Committee 
learned that another IRS employee (``Whistleblower 2'') had 
retained counsel and may be interested in providing additional 
relevant information to the Committee.
    On May 16, 2023, one day after learning of the removal of 
the IRS investigative team, Chairman Smith sent a letter to 
Commissioner Werfel requesting an urgent briefing on the 
retaliation allegations. Commissioner Werfel agreed to brief 
the Chairman.
    On May 22, 2023, the Committee received another letter from 
Whistleblower 1's legal counsel notifying the Committee that 
the IRS proceeded to take further retaliatory actions against 
the IRS employee.
    On May 24, 2023, the Committee received a letter from 
Whistleblower 2's legal counsel noting that Whistleblower 2 
shares the concerns about the management of the high-profile 
case raised by Whistleblower 1. The letter also notes that 
despite Whistleblower 2's good faith efforts to engage in a 
dialogue with supervisors at the IRS about this case and the 
management of the case, to date, his efforts resulted in no 
constructive engagement. Rather, IRS management responded in a 
manner that raised significant alarm for Whistleblower 2 of 
possible retaliation.
    On May 26, 2023, and June 1, 2023, Committee staff 
conducted voluntary transcribed interviews of Whistleblowers 1 
and 2, respectively. Each interview lasted for approximately 7 
hours. To ensure a complete and thorough disclosure was made by 
the whistleblowers, information protected by 26 U.S.C. 
Sec. 6103 was discussed. Majority and minority staff had equal 
opportunity to ask questions of the whistleblowers and were 
able to ask questions until none remained.
    On May 31, 2023, IRS Commissioner Werfel briefed Chairman 
Smith in person at the Chairman's request.
    On June 7, 2023, IRS Commissioner Werfel sent a letter to 
Chairman Smith with a copy also to Ranking Member Neal. That 
letter followed up on the numerous concerns Chairman Smith 
raised during the May 31, 2023, meeting about alleged 
retaliation against IRS employees.

               B. Description of the Submitted Materials

    The documents presented during executive session for the 
Committee's consideration include the following:
    1. Transcript of voluntary interview of Whistleblower 1.
    2. Affidavit further clarifying Whistleblower 1's 
testimony.
    3. Transcript of voluntary interview of Whistleblower 2.
    4. Letter further clarifying Whistleblower 2's testimony.
    5. Letter from IRS Commissioner Daniel Werfel to Chairman 
Smith and copied to Ranking Member Neal dated June 7, 2023.
    The materials include minor redactions covering the 
following topics:
           Whistleblower 2's name and a small number of 
        other personal identifiers.
           The names of the children of the subject of 
        the investigation at issue.
           Personally identifiable information, 
        including phone numbers, signatures, physical address, 
        email addresses, account numbers, and similar 
        information.
           Staff names--these names were either 
        redacted, or, where possible they were changed to 
        ``Majority Counsel'' or ``Minority Counsel'' for 
        clarity.

                       III. VOTE OF THE COMMITTEE

    Pursuant to 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 materials that were considered by the 
Committee during the Executive Session, comprised of the 
transcripts of the interviews of the two whistleblowers, the 
whistleblowers' supplemental materials, and the letter from IRS 
Commissioner Daniel Werfel, dated June 7, 2023, on June 22, 
2023.
    The following statements are made concerning the votes of 
the Committee on Ways and Means during the consideration of the 
materials reviewed in an open and closed executive session on 
June 22, 2023.
    A motion, offered by Mr. Smith of Nebraska, to make public 
the transcript of the executive session proceedings should the 
Committee vote to submit to the House any information. The 
motion was agreed to by unanimous consent. See Attachment A at 
end of report.
    A motion, pursuant to clause 2(g)(1) of House Rule 11, that 
the Committee proceed to a closed executive session, offered by 
Mr. Schweikert. The motion was agreed to by voice vote.
    A motion, offered by Mr. Schweikert, to submit to the House 
of Representatives the materials that were considered by the 
Committee during the Executive Session, comprised of the 
transcripts of the interviews of the two whistleblowers, the 
whistleblowers' supplemental materials, and the letter from IRS 
Commissioner Daniel Werfel, dated June 7, 2023. The motion was 
agreed to by a recorded vote of 25 to 18 (with a quorum being 
present). The vote was as follows:

----------------------------------------------------------------------------------------------------------------
          Representative             Yea      Nay     Present      Representative      Yea      Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO)...................       X   .......  .........  Mr. Neal...........  .......       X   .........
Mr. Buchanan.....................       X   .......  .........  Mr. Doggett........  .......       X   .........
Mr. Smith (NE)...................       X   .......  .........  Mr. Thompson.......  .......       X   .........
Mr. Kelly........................       X   .......  .........  Mr. Larson.........  .......       X   .........
Mr. Schweikert...................       X   .......  .........  Mr. Blumenauer.....  .......       X   .........
Mr. LaHood.......................       X   .......  .........  Mr. Pascrell.......  .......       X   .........
Dr. Wenstrup.....................       X   .......  .........  Mr. Davis..........  .......       X   .........
Mr. Arrington....................       X   .......  .........  Ms. Sanchez........  .......       X   .........
Dr. Ferguson.....................       X   .......  .........  Mr. Higgins........  .......       X   .........
Mr. Estes........................       X   .......  .........  Ms. Sewell.........  .......       X   .........
Mr. Smucker......................       X   .......  .........  Ms. DelBene........  .......       X   .........
Mr. Hern.........................       X   .......  .........  Ms. Chu............  .......       X   .........
Ms. Miller.......................       X   .......  .........  Ms. Moore..........  .......       X   .........
Dr. Murphy.......................       X   .......  .........  Mr. Kildee.........  .......       X   .........
Mr. Kustoff......................       X   .......  .........  Mr. Beyer..........  .......       X   .........
Mr. Fitzpatrick..................       X   .......  .........  Mr. Evans..........  .......       X   .........
Mr. Steube.......................       X   .......  .........  Mr. Schneider......  .......       X   .........
Ms. Tenney.......................       X   .......  .........  Mr. Panetta........  .......       X   .........
Mrs. Fischbach...................       X   .......  .........
Mr. Moore........................       X   .......  .........
Mrs. Steel.......................       X   .......  .........
Ms. Van Duyne....................       X   .......  .........
Mr. Feenstra.....................       X   .......  .........
Ms. Malliotakis..................       X   .......  .........
Mr. Carey........................       X   .......  .........
----------------------------------------------------------------------------------------------------------------


                          IV. DISSENTING VIEWS

    The Minority agrees that all whistleblower allegations must 
be taken seriously and that taxpayers should pay their fair 
share of taxes. The Minority opposed the submission of a 
private citizen's confidential tax information to the House of 
Representatives because the material released is an 
unsubstantiated, premature, and incomplete record of a years-
long investigation being handled by the Internal Revenue 
Service (IRS) and the Department of Justice (DOJ)--spanning 
both Republican and Democratic Administrations. The Minority is 
deeply troubled that unsubstantiated allegations were released 
to the public before the Committee took any further steps to 
corroborate them. The unsubstantiated allegations of two 
employees--one who spoke on his own free will and the other at 
the request of the Majority--do not justify the release of a 
private citizen's confidential tax information. Other reasons 
the Minority opposed the public release are below.
    The whistleblower transcript contains documents from 
unknown sources, giving an appearance that these documents are 
from IRS files provided by the whistleblower when, in fact, 
they are not. Exhibit 4 and Exhibit 5 were not produced by 
Whistleblower #1 to the Committee. The Majority presented these 
exhibits to the whistleblower, included them in the transcript, 
and did not reveal their source. At the Executive Session, in 
response to questions, the Minority found out that these 
exhibits were obtained by the Majority from ``open sources''--
i.e., the Internet. Yet, the exact source remains unknown, and 
the exhibits were not authenticated. The exhibits are not from 
IRS files despite their appearance in the transcript. With 
respect to Exhibit 5, the whistleblower stated, ``And, if I 
wasn't taken off the case, I would have been tainted by this 
document.'' These unauthenticated exhibits from unknown sources 
should not be included in the transcript as if they are 
documents provided by the whistleblower or his attorney.
    The Majority did not interview any of the more than 50 
government employees identified in the transcripts, or verify 
any of the documents, before rushing to release these 
allegations to the public. The Majority interviewed two 
individuals and then rushed to release the allegations. The 
case began in November 2018 under the former Administration, 
and many of the allegations regarding delay and slow-walking 
occurred under Trump-appointed officials (e.g., the former 
Attorney General and former IRS Commissioner). The prosecutors, 
investigators, and key employees largely have remained the 
same. The Majority did not interview any of the government 
employees (more than 50 individuals) identified in the 
transcripts or verify the exhibits, including those produced by 
the Majority from unknown sources. At the Executive Session, 
the Minority repeatedly questioned whether certain individuals 
or any of the more than 50 employees identified in the 
transcripts had been interviewed, called, e-mailed, sent a 
letter, or otherwise contacted by the Majority. The Majority 
did not. These government employees, including our nation's law 
enforcement agents, were given no opportunity to defend their 
names or respond to the allegations prior to release to the 
public.
    The Minority discovered that the second whistleblower was 
selected and contacted by the Majority and did not come to the 
Committee on his own volition directly or through the 
whistleblower portal. The Minority discovered that the employee 
who asked to remain anonymous was selected and contacted by the 
Majority for an interview. The Majority, who holds the subpoena 
power for the Committee, contacted the employee's attorney and 
``asked'' for an interview. Generally, whistleblowers contact 
the Committee and not the other way around. This employee made 
clear on several occasions during the interview that he was 
there at the request of the Majority. He began his interview by 
stating, ``I wanted to start out by saying I'm coming here to 
you today after someone from your committee reached out to my 
counsel to come in and testify.'' He further states, ``I felt 
that it was my duty as a government employee to abide by your 
request.'' The Minority questions why the Majority only 
selected and contacted this employee and no others.
    The second witness recants key element of his testimony 
days before the Executive Session. During the interview, the 
second witness stated that in early 2019 he was ``told that 
William Barr made the decision to join two investigations 
together.'' Those investigations were this case and another 
case opened by DOJ earlier that year. When asked how this 
decision was communicated to him, he replied that it came from 
his supervisor at the time. However, just days before the 
Executive Session, he filed a supplemental statement that, ``on 
further reflection, Mr. X cannot definitively state that his 
then-supervisor said that that the Department of Justice 
official directing the merger of the cases was AG Barr.'' In 
light of this change, the Committee should have done further 
work to corroborate the allegations before releasing the 
transcripts to the public.
    The Majority has no legitimate legislative purpose for 
releasing confidential tax information of a private citizen to 
the public. The court in the Committee's recent case stated, 
``[T]here is no general authority to expose the private affairs 
of individuals without justification in terms of the functions 
of Congress.'' Further, ``[t]here is no congressional power to 
expose for the sake of exposure.'' We question whether the 
Majority has a legitimate legislative purpose for exposing the 
confidential tax information of this private citizen. The bar 
for this type of exposure should be exceedingly high. If the 
alleged purpose was to expose misconduct or maladministration, 
it could have been done without the breadth of confidential tax 
information released to the public. This purpose is pretextual 
and abuses the power of this Committee.
    The Committee is not a law enforcement body. The Majority 
is misguided about the authority of the Committee. The court in 
the Committee's recent case stated, ``Congress cannot exercise 
its investigative powers for the purpose of law enforcement 
because the power of law enforcement is vested in the executive 
and judicial branches.'' This Committee is not a law 
enforcement body. It is a legislative body. The Committee has 
no independent power to enforce the tax laws against a private 
citizen, much to the Majority's chagrin.
    Allegations of retaliation have been referred to the 
Inspectors General who have law enforcement power. The 
documents make clear that the IRS referred the allegations 
involving retaliation to the Treasury Inspector General for Tax 
Administration and the Department of Justice Inspector General. 
The documents also clarify that the emails sent to the IRS 
Commissioner by the second employee involving allegations of 
retaliation were deleted from the Commissioner's inbox without 
his review and forwarded to the Inspectors General. The 
Committee should not have released these allegations until 
Inspectors General complete their work and report back to the 
Committee.
    Trump-appointed U.S. Attorney for the District of Delaware 
has ``ultimate authority'' for the case. This case is being 
handled by theTrump-appointed U.S. Attorney. In a June 7, 2023 
letter, U.S. Attorney Weiss stated, ``I have been granted 
ultimate authority over this matter, including responsibility 
for deciding where, when, and whether to file charges and for 
making decisions necessary to preserve the integrity of the 
prosecution, consistent with federal law, the Principles of 
Federal Prosecution, and Departmental regulations.'' He should 
complete his work without interference by the Majority.
    This is a stunning abuse of power by the Majority. The 
stunning abuse of the Committee's power in this instance stoops 
below the stature of the Committee and reeks of partisanship. 
The Committee should have attempted to corroborate the 
allegations before releasing them to the public.
            Sincerely,
                                           Richard E. Neal,
                                                    Ranking Member.




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