“The Biden Administration has its priorities all wrong,” said Republican Leader on the Ways and Means Oversight Subcommittee Rep. Tom Rice (R-SC) at a hearing, urging the agency to serve American taxpayers and to resolve the backlog instead of pushing for an expansion of the agency.

CLICK HERE to watch Rep. Rice’s remarks.

Key Excerpts:

“Now, this tax return backlog crisis began with pandemic closures in March 2020 that impacted all of society.”

 

[…]

 

“But President Biden didn’t propose a plan to resolve the backlog and fix the customer service crisis at the agency.

 

“Instead, he proposed doubling the size of the IRS by hiring 87,000 new agents to conduct tax enforcement, not to process the backlog or provide customer service to taxpayers. 

 

“As part of that plan, the Biden Administration also wanted local banks to report details of nearly every American’s bank account to the IRS in a massive surveillance effort.”

 

[…]

 

“When it comes to the IRS, the Biden Administration has its priorities all wrong.

 

“The idea that we would double the size of the IRS by focusing entirely on enforcement without first fixing the agency’s ability to provide basic services to taxpayers is laughable.

 

“It wasn’t that long ago that Republicans and Democrats on this committee came together to draft and pass the Taxpayer First Act.

 

“Part of the purpose of that bill was to reform the IRS to make it work better for taxpayers. To put taxpayer service at the heart of the agency’s mission.

 

“The Biden Administration’s plan would undo that work and turn the agency into an aggressive enforcement agency that is adverse to taxpayers rather than one that serves the taxpayers.

 

“When it comes to a long-term vision of the IRS, we need to come together to fix the customer service problems at the IRS and modernize IRS technology so that the agency can operate effectively in the 21st century. We can do it and I know there are members on both sides of the aisle dedicated to working together on those issues.”

Key Background:

• After months of Republican pressure to take action on the more than 20 million tax return backlog, the IRS announced steps to use money in its existing budget to hire 10,000 workers to address the crisis. IRS officials do not expect to resolve the backlog until the end of 2022.
• The Biden Administration and Congressional Democrats ignored the historic tax return backlog, instead demanding Congress create a dangerous bank surveillance scheme and fund 80,000 new IRS agents to unleash on American taxpayers.
• Republicans have introduced the Tax Gap Reform and Internal Revenue Service (IRS) Enforcement Act, which allows for a better understanding of the tax gap, provides smarter enforcement, ensures the IRS uses all of the resources at its disposal, and addresses the expertise gap at the IRS.

Rep. Rice’s full remarks as prepared for delivery appear below.

Thank you, Madam Chair, and I want to commend Chairman Pascrell for holding this hearing today.

 

Thank you to Commissioner Rettig for being here as well.

 

And before I begin, I want to say a thank you to the thousands of IRS employees that have worked very hard and have worked overtime in many cases during a pandemic.

 

We have many policy debates here and many concerns about management decisions at the IRS. But your work is important and not easy. So, we thank you for it. 

 

Now, this tax return backlog crisis began with pandemic closures in March 2020 that impacted all of society.

 

The IRS was closed for months due to the virus.

 

While electronically filed tax returns could be processed remotely, paper returns and mail piled up at IRS facilities with no one in the office to open them.   

 

I recognize that during the pandemic, Congress assigned the IRS significant new responsibilities such as sending Economic Impact Payments and Advanced Child Tax Credit payments to millions of Americans.

 

There is no doubt that the pandemic created a significant challenge for the IRS just as it did for families and businesses.  

 

And the IRS certainly has had some successes along the way.

 

Developing a process for sending out economic impact payments to millions of Americans and executing those payments in a timely fashion was clearly one such success.  

 

But not all actions taken at the IRS have been successful during the pandemic.

 

Republican members of this committee have been sounding the alarm about the backlog crisis for well over a year now.

 

When President Biden took office, the return backlog and customer service at the IRS were at crisis levels.

 

Customer service levels have been low at the IRS for some time, but things got much worse as the pandemic dragged on.

 

The agency was receiving millions more calls than in previous years and phone call answer rates fell to even lower levels.  

 

This information was known when President Biden took office.

 

But President Biden didn’t propose a plan to resolve the backlog and fix the customer service crisis at the agency.

 

Instead, he proposed doubling the size of the IRS by hiring 87,000 new agents to conduct tax enforcement, not to process the backlog or provide customer service to taxpayers.

 

As part of that plan, the Biden Administration also wanted local banks to report details of nearly every American’s bank account to the IRS in a massive surveillance effort.

 

So far, these bad ideas have been blocked from becoming law, but unfortunately, we know the administration is still pursuing them.

 

When it comes to the IRS, the Biden Administration has its priorities all wrong.

 

The idea that we would double the size of the IRS by focusing entirely on enforcement without first fixing the agency’s ability to provide basic services to taxpayers is laughable.

 

It wasn’t that long ago that Republicans and Democrats on this committee came together to draft and pass the Taxpayer First Act.

 

Part of the purpose of that bill was to reform the IRS to make it work better for taxpayers. To put taxpayer service at the heart of the agency’s mission.

 

The Biden Administration’s plan would undo that work and turn the agency into an aggressive enforcement agency that is adverse to taxpayers rather than one that serves the taxpayers.

 

When it comes to a long-term vision of the IRS, we need to come together to fix the customer service problems at the IRS and modernize IRS technology so that the agency can operate effectively in the 21st century. We can do it and I know there are members on both sides of the aisle dedicated to working together on those issues.

 

Now, let me transition back to the short-term problems we are facing.

 

Just last week the IRS and Treasury put out what they called an “Aggressive Plan to End Pandemic Inventory Backlog This Year.”

 

That plan highlights several initiates we’ve heard about previously combined with a few new initiatives.

 

Commissioner Rettig, while I wish this aggressive approach had been implemented a year ago, I am very happy to see that the agency has put together a serious plan that matches the seriousness of the problem.

 

I want to highlight a couple key points from the plan and how we got here.  

 

In January of this year, we learned that the IRS was sitting on over $1 billion that it received in early 2021 while at the same time arguing that it needed additional funding to deal with the backlog.

 

I urged the IRS multiple times in January and February to use those funds to address the backlog.

 

It appears that the agency may now be choosing to use those dollars to hire 5,000 workers dedicated to working through the backlog this year.

 

After our calls for drastic action, the IRS also announced that it would create surge teams to address the backlog.

 

I understand that this involves temporarily moving IRS employees from other parts of the agency over to submissions processing to help get through the backlog.

 

This strikes me as a good idea given the scope of the problem and I’d like to hear more from you Commissioner Rettig about how this process will work. 

 

I also noticed in your plan that you are evaluating options for pursuing additional contractor assistance. I’d like to hear more from you on that effort as well.

 

Finally, you have a number of items in the plan regarding communication with taxpayers. I want to know from you what we are going to do in the short term to help taxpayers who are contacting the IRS actually get the answers they need. This problem is massive and inability to contact the agency feeds the ongoing backlog problem.

 

Commissioner Rettig, I think you for developing an aggressive plan. That is a very good thing.

 

But a plan is just a plan. It is an idea. A first step.

 

Now we need to see real action.

 

And we need to see tangible results.

 

We are counting on it and millions of American families are counting on it too.

 

I look forward to hearing more about your plan and discussing how we can work together to help you and the IRS achieve the goal of resolving this backlog crisis this year.

 

Thank you and I yield back.