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Hearing of the House Ways and Means Committee - Status of Internal Revenue Service's Review of Taxpayer Targeting Practices

Hearing

By:
Date:
Location: Washington, DC

It has been six weeks since the IRS first revealed that they were purposefully targeting conservative-leaning organizations. This week, additional IRS documents revealed that the term "progressive," along with others, were also included on the "Be On the Lookout" list -- or the BOLO. I want to make one thing clear, no taxpayer, regardless of political affiliation, should be unfairly targeted. It is wrong, and this Committee is working to ensure that it will never happen again.

The Committee has welcomed all groups that feel they may have been targeted for extra scrutiny to come forward, and I urge them to do so. So far, the evidence only shows conservatives being systematically targeted by the IRS, not just flagged through the BOLO, but actually targeted. These Americans consistently had their applications delayed for nearly three years, were asked intrusive and inappropriate questions, had their donor information leaked, and were even threatened by the IRS with additional taxes. But as I have long said, we are in the early stages of this investigation, and as we gather the facts, we will follow those facts wherever they lead. Again, if there are additional groups, of any political affiliation, that feel they were mistreated, I urge them to come forward and share their story.

From what we have learned already, it is clear that the IRS is a broken agency that needs to answer to the American people. Mr. Werfel, in the interest of accountability, and at the direction of Treasury Secretary Lew, you spearheaded a 30-day review of the practice of discriminating against conservative groups. Unfortunately Mr. Werfel, while I am aware this is an initial report, it fails to deliver the accountability the American people deserve.

This report doesn't even answer the most basic, significant questions: Who started this practice, why was it allowed to continue for so long, and how widespread was it? In fact, this report suggests you haven't even asked anyone those questions.

Additionally, the report fails to address some of the most egregious offenses by the IRS. I'm specifically talking about the intentional leaking of confidential taxpayer information and the IRS threatening conservative donors with additional taxes.

The review notes that it is important that TIGTA continues to identify inappropriate actions, but where is the internal oversight? Where are the checks to prevent this behavior in the first place? How will the IRS learn from these inexcusable actions and provide the American taxpayer with real proof and evidence that it will not happen again?

It will be necessary to provide concrete reforms and assurances to begin rebuilding the trust this agency has lost with the American people. Instead, all we get is a glaring recommendation in this report that Congress fulfill the agency's budget request of an additional $1 billion.

Frankly, it is insulting to taxpayers that the IRS would ask for an additional $1 billion right after we find out that the IRS was targeting taxpayers for their beliefs, spent millions of taxpayer dollars on frivolous conferences, produced ridiculous and completely useless Star Trek parody videos (among others), and put expensive dinners and alcohol on IRS credit cards. Mr. Werfel, let me be clear, until the IRS proves that it can responsibly manage its current funds, the IRS will not see one more dime in taxpayer funding.

We need real reforms, and they must be implemented so the American people can have a restored faith that they have a government that works for them -- not against them. That begins with instituting long-term and meaningful changes, changes to both how the agency operates and to the tax code the agency is trying to enforce.

As I have stated before, I often hear from constituents about their fear of being audited by the IRS. That fear used to stem from the fact that the tax code was so complicated, nobody knew what was really in it or if they had filed their taxes correctly. Even when people paid someone else to do their taxes, they would sign their return not knowing what was in it and hoping the preparer got it right. That is something this Committee must, and will, fix.

However, today, Americans fear an audit not just because the tax code is too complex, but because we have an agency that is out of control. We have managers in Washington sitting on cases for years, directing intrusive and inappropriate questions to be asked. And, after a month-long internal review, all you can tell this Committee is that a few people have been removed from their old jobs, but you cannot even assure us that they have been removed from the agency. It is my understanding that they either continue to be paid or are receiving full retirement benefits. On top of those salaries and benefits, those employees have received over a quarter of a million dollars in bonuses over the past few years. And, you have not identified any structural changes within the IRS that would prevent these abuses of power from happening again.

If there is anything this report shows, it is just how much more work must be done. Congress will continue the investigation into the IRS's actions and get to the bottom of this so we can ensure no American is targeted again.


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