▶ 0:16:44The committee will come to order. Good morning. I want to welcome um the IRS CEO Bizignano to the Ways and Means Committee. We look forward um to having you back to discuss your great work as commissioner um of the Social Security Administration soon as well. Um thank you for being here with with uh at least from the IRS's hat today.
▶ 0:17:09Under President Trump, the the IRS is putting the American taxpayer first and supporting working families. Look no further than this tax filing season, which shows how the promise of the working families tax cuts we enacted last year is becoming reality. Americans are getting bigger refunds that put more money back into their pockets.
▶ 0:17:35Average tax refunds amounts are 10% higher this filing season than last. No tax on tips. No tax on overtime. No tax on social security. No tax on auto loan interest for cars made in the USA. Trump accounts. A larger child tax credit. A boosted standard deduction. These tax cuts are making life more affordable for working families.
▶ 0:18:06Let's take a family of four with two kids. A family like this making up to $73,000 would owe nothing would owe zero to the federal government thanks to the working famil family's tax cuts. That same family can also expect to have up to more in take-home pay.
▶ 0:18:32That is real money that helps people get ahead. Republicans secured more than 7 million jobs and we're already seeing higher than projected economic growth thanks to these progrowth tax cuts.
▶ 0:18:50Just just in the past week traveling through southeast Missouri, I heard directly from a young lady who's a waitress who had a record refund of nearly because of all the different provisions within the tax cut and jobs act.
▶ 0:19:10That her year-long's rent and also her grocery bills. This makes a difference from people who are just living from paycheck to paycheck trying to put food on their table, clothes on their VAS, and gasoline on their cars. The IRS is where the rubber meets the road for delivering this tax relief.
▶ 0:19:39It is vital that the IRS must deliver timely refunds. This money, a direct result of the working families tax cuts, will make a difference for millions of hardworking Americans, waitresses, linemen, seniors, welders, farmers, and small business owners, just to name a few.
▶ 0:20:03We look forward to hearing what the IRS is doing to quickly issue refunds and we will continue to engage with the agency to deliver relief to working families. This committee also has a duty to ensure that our tax code is not exploited by bad actors.
▶ 0:20:27That is why we are conducting an investigation into taxexempt groups whose activities potentially violate their taxexempt status. Our investigation has uncovered organizations operating in the United States who push Chinese propaganda. They incite violent protest and riots, facilitate foreign interference in our elections, and support terrorism.
▶ 0:20:58Tax exempt status is a privilege, not a right. On behalf of the American people, we will fight to ensure this privilege is not abused. The agency must work to ensure our tax code is not weaponized against the American people to carry out the agenda of foreign actors.
▶ 0:21:24As the IRS carries out President Trump's agenda, it is also using modern technology to become faster, leaner, and more efficient. That work complements the bipartisan legislation passed out of this committee, including four tax administration bills that have now become law to make tax filing easier and more fair for Americans.
▶ 0:21:50The modernized technology being implemented under your leadership stands in stark contrast the approach of the Biden administration's When they had complete control of Washington, Democrats handed the IRS an $80 billion check to hire 87,000 new IRS agents whose purpose we uncovered in this committee was to in fact audit more
▶ 0:22:20middle class families and small businesses. They gave the IRS the power to snoop on the Vinmo or Cash App transactions of Americans buying a couch from their neighbor or paying a neighborhood kid to mow the lawn. This was the wrong approach then. And thanks to this committee's actions, taxpayers can breathe a little easier after the largest tax cut in American history.
▶ 0:22:50I want to thank you for coming to testify about the IRS's progress to better serve taxpayers, the successful filing season, and how you are ensuring Americans get their money back in their pockets faster. I'm pleased to recognize the ranking member, Mr. Neil, for his opening statement.
▶ 0:23:10Thank you, Chairman, and welcome, uh, I think that this administration owes the American people an explanation for the war that has been waged on the IRS over the last year. The chairman referenced 87,000 agents that had been hired, that request came from a Republican commissioner of the IRS. That's where the money came from. The people that I have known who have taken the job that you have, they have served the country with honor.
▶ 0:23:40Last week, we learned that a federal judge found that the Trump administration violated the law not once, not twice, but 42,695 times when improperly sharing confidential taxpayer immigration Think about it. 42,695 abuses of sensitive information that Americans entrusted to their government.
▶ 0:24:05Amazingly consistent that a red flag was raised by our colleagues on the Republican side tasked with overseeing the IRS and the protection of American data is the responsibility of this committee. With the 42,696th violation of the law raise a Republican eyebrow.
▶ 0:24:26What will it take to finally get to the bottom about what is unfolded under their willful blindness towards the danger coming out of this What we all need to be concerned about with the IRS, as was previously referenced, we ought not to adhere to a Trump agenda at the IRS. We follow the letter and spirit of the law at the IRS.
▶ 0:24:50America needs an IRS that serves them reliably, not one that is repurposed as a tool for this president or any other president. But it becomes clear that for our Republican colleagues, a functional, transparent IRS seems not to be a priority.
▶ 0:25:06It won't blink as the president tries to sue the IRS for10 while simultaneously being a champion of slashing the resources that help Americans, cutting direct file programs, which had a substantial approval rating and save taxpayers millions of dollars. More than 20% of the IRS workforce has been cut.
▶ 0:25:28Now the administration is papering over these self-inflicted failures by putting bodies in chairs with little processing experience or how to serve the customer. With poor decisions piling up, wait times climb, calls go unanswer, I know what my congressional office is hearing back home, and Americans know exactly who they should blame.
▶ 0:25:51Meanwhile, wealthy tax evaders are celebrating as investigations into abusive schemes, listen to this number, have plunged by When refunds do come, more fractured, broken promises. The president promised the largest refund season in history.
▶ 0:26:10That's his quote, with increases of But Republicans own data now show that the gains for average Americans are much smaller than promised and are skewed once again to the wealthy, like their tax bill, and non-existent for most households un earning under $100,000. The filing season data is showing increases average just about $350, a far cry from what the majority guaranteed.
▶ 0:26:38and over half million people who have had their refunds delayed by the president are instead receiving an unknown quote letter that Treasury refused to provide to this committee. Not to mention that any modest increases are being wiped out by the tariffs that the president chaotically imposed, costing the American family an average of $1,700.
▶ 0:27:00When Democrats ran the show, we made overdue critical investments that made filing easier, cut weight times, saved Americans money, and recovered more than1 billion dollars from rich tax avoiders. Republicans have wasted no times reversing course in a campaign to dismantle the IRS's ability to function, leaving their friends at the very top and our president himself to be able to take advantage of these filings.
▶ 0:27:29This hearing and what we've watched unfold for the past year serves as a reminder of what Republicans made their permanent tax cuts for billionaires to mean, leaving families with temporary gimmick-filled relief that won't combat soaring costs. People understand this for what it is. Said time and again during my long tenure in this house, the IRS was a challenge. It was still a well- reggarded referee in our tax filing system.
▶ 0:27:57All of a sudden, it became the enemy of the Republican party as it relates to tax collections. A fair, transparent tax collecting agency is essential to a functioning representative democracy. And with that, Mr. Chairman, I yield back my time.
▶ 0:28:13Thank you, ranking member. Um, today's sole witness is the chief executive officer of the Internal Revenue Service, Frank Bizignano. The committee has received your written testimony and it will be made part of the formal hearing record. Um, CEO, you have five minutes to deliver your remarks and you may begin when you're ready.
▶ 0:28:37Thank you, Chairman Smith, Ranking Member Neil, and members of the I appear before you today to discuss the tax filing season and IRS operations. is an honor to be the first chief executive officer of the IRS and it comes at a time of historic tax relief benefiting seniors, working families, and children across America.
▶ 0:29:01I am grateful to President Trump and Secretary Bessant for the opportunity to lead the transformational work at IRS. I am pleased to report to the American people that the 2026 filing season opens on schedule on January 26th and has gone smoothly so far.
▶ 0:29:20Through March 2nd, the IRS received more than 55 million individual federal returns and issued about 37 million refunds totaling about 137 billion. I come from the private sector, having spent four decades leading some of the nation's largest financial institutions.
▶ 0:29:44In every job, we consistently served our customers and navigated challenging times with good processes and plans. I also have deep ties to the federal government. My father was a Treasury employee for 44 years. He did customs enforcement, boarding ships, and making sure our ports were safe. I have great respect for Treasury's work and for the mission of the IRS.
▶ 0:30:12Since becoming CEO in October, I have worked with the management team to shape a clear, focused vision for the IRS. I recently put in place an organizational structure that created greater spans of control and eliminated layers of management to be closer to the excellent workforce. Now more functions report directly to me.
▶ 0:30:37This structure will translate to better accountability, improved performance, and faster service delivery. To execute our vision, I have assembled an outstanding leadership team. I am confident they will help the agency deliver worldclass service to the American people, a pristine control environment, all while driving a high productivity agenda.
▶ 0:31:05As part of our efforts to ensure a successful filing season, the IRS has been implementing the tax benefits of the Working Families Tax Cuts Act. The tax relief enacted under this landmark legislation forms the cornerstone of the administration's growth agenda.
▶ 0:31:26The tax benefit to individuals provided under the working families tax cuts is estimated to be 220 billion. The average American family is already seeing greater benefits than ever before.
▶ 0:31:43This is in thanks to a few of the signature provisions of the Working Families Tax Cuts Act, including no tax on tip, no tax on overtime, no tax on car loan interest, and a special tax deduction for seniors.
▶ 0:32:00I applaud congressional Republicans for having a focus on a key element of the Thanks to your work, critical provisions of the Tax Cuts and Jobs Act were made permanent in the Working Families Tax Cuts, including doubling the standard deduction and increasing the child tax credit, domestic R&D expensing, expensing for capital investments, and the
▶ 0:32:30199A pass through deductions. These provisions are leading to an economic boom for American businesses which directly impacts American workers. Another major provision we're implementing is the Trump accounts, a new t type of individual retirement account that will provide families a financial head start for their children.
▶ 0:32:56The IRS is focused on making it as easy as possible to open and contribute to an account. Demand has been very strong. The IRS has received over 2 million forms 4547 already with more on its way. Along with filing season and other dayto-day operations, we are transforming the agency. We are laser focused on creating a digital IRS.
▶ 0:33:27The transformation is not just an operational need. It's a modernday responsibility. It allows us to better identify and address areas of significant non-compliance. Provide taxpayer with 247 access to their information and safeguard the sensitive financial data entrusted to us.
▶ 0:33:51To date, we have seen visits to IRS.gov increase 43% over last year, coinciding with decreased phone service demand because the American public can do it the way they do many things online when they want to.
▶ 0:34:12Our goal for taxpayers is our transformational efforts to create a seamless customer experience where taxpayers can interact with the IRS with the same ease they expect from the private sector. We are building an IRS that leveraged advanced technology, empowers its workforce with better tools, and delivers secure and easily accessible services. Mr. Chairman, I'm happy to take questions.
▶ 0:34:43Thank you. We'll now proceed to the question and answer session. With birth rates near historic lows, Republicans on this committee wanted to do everything possible to make it more affordable to start a family and the working families tax cuts. The cost of adoption, for example, is estimated to be as high as $60,000, which which is more money than many Americans make in a year.
▶ 0:35:12We cannot accept that cost. It is a true barrier to giving a child their forever home. That's why Republicans gave more families access to the adoption tax credit and the working families tax cuts. working-class families who sacrifice to adopt a child into their home can miss out on the full value of the credit.
▶ 0:35:37So, the working families tax cuts made a portion of the adoption tax credit refundable to ensure adoption is accessible to every family regardless of income. Mr.
▶ 0:35:51Vizignano, with refund season now in full swing, can you speak to how the IRS and Treasury Department are working to implement the refundability of the adoption tax credit for families welcoming a new child into their home?
▶ 0:36:09Thank you uh Mr. Chairman for the question and thank you for your leadership. Um, after reviewing this issue, I am pleased to announce that for tax year 2025, carry forward amounts of the adoption credit for prior years are refundable up to 5,000 per qualifying child.
▶ 0:36:31And the IRS is implementing this policy as expeditiously as possible without disrupting the current filing season. The IRS will publish additional information on this very soon. Taxpayers should continue to claim the credit as directed by the current forms and instructions during tax season since the IRS is pursuing pursuing post filing remedies to resolve this issue. Sir,
▶ 0:37:00that's great to hear. Um, we are currently in the midst of what is projected to be the largest tax refund season on record. Taxpayers are expected to see on average a $1,000 boost in their tax refund. This is putting more money back in the pockets of working families.
▶ 0:37:21It is not just the fact that working families are going to see larger refund checks with refunds already 10% higher than last year. We must also ensure that money gets into the hands of working families as soon as possible. What is your agency doing to make filing smoother for American taxpayers who are set to benefit from these historic tax refunds?
▶ 0:37:50And what, if any, additional efforts do you think are needed to ensure the working families of this country get the tax relief that they
▶ 0:38:04I'm proud to uh update the committee on a set of financial metrics and performance metrics. of 55 million uh returns received to date, 43% of them were with schedule 1A. Schedule 1A are the four big provisions that we talked about.
▶ 0:38:27And when you look at that, the largest filing were for no tax on overtime, right? That's a statement about the Working Families Tax Cut Act. It's actually when we look at the distribution of it, our research and analytics group, which does all the reporting for us right now, if you scheduled a a a schedule 1A, on average, the refund increase is $775.
▶ 0:38:59Now, we had talked about $1,000, but the analytics group has a scale that shows by the end of this, it will be $1,000. bigger refunds faster. If there was a direct deposit, which is in the high right, and increasing, it's 9 days on average for that refund to get to the taxpayer.
▶ 0:39:24So, I think what you're finding is bigger refunds, quicker refunds, and an easier IRS to operate through. Right at this moment we are statistically 40% through filing season 40%. We statistically get 160 mill 140 million during the season and we have 55 million today. It is a very good indicator of how the filing season is going.
▶ 0:39:54Faster returns processed and bigger refunds distributed. That's where we are right now. Chairman
▶ 0:40:02Commissioner, your answer leads to my next question pretty pretty easily. Um, to say the to say the IRS is the least trusted agency in government would be a gross misunder understatement when you talk to my constituents who I represent. If ever there was a part of the bureaucracy that could benefit from some private sector expertise, it is the IRS.
▶ 0:40:28Um, the Ways and Means Committee has made it a priority to make the IRS more efficient to better serve and protect taxpayers. Can you please share how you're applying your extensive private sector experience managing global payment systems to the administration's efforts to to modernize IRS systems and
▶ 0:40:54Yes. Uh I appreciate the question and uh I've many many years 40 years uh whether it was in 911 in lower Manhattan whether it was during the financial crisis or uh my major role in the recovery of the housing market with uh housing secretary Donovan.
▶ 0:41:15I went on to uh Gorun uh one of the largest fintexs uh out there and uh we did 850 million payments a day for $2.5 trillion a day and it was all designed around a technology philosophy to make it easier for our customers.
▶ 0:41:36And what you're seeing right now with the 43% increase we talk about online usage is the technology being applied by a fabulous CIO who reports to me who had been three levels down in this organization and promoted up and is doing an outstanding job. The career people in the agency are feeling highly motivated by something we like to call straight through processing.
▶ 0:42:03comes from the client, gets processed through the system, and ultimately gets an outcome for the client. The ability for our American taxpayers to go online and use a where's my refund function? That function's existing and live. And well, we are creating right now and we we're doing it on a a double-digit percentage of amended returns.
▶ 0:42:29A capability to take a process that took 16 weeks an amended return to less than one and that will be fully implemented by the end of this tax season. And lastly, you would be proud and happy to know what's going on in the department because of all we are getting done is the planning for 27's tax season right now.
▶ 0:42:57Thank you, sir. I now recognize the ranking member for any questions he might have.
▶ 0:43:01Thank you, chairman. Mr. Biziano, do you know when the IRS first entered into its union contract with the NTEU or its predecessor
▶ 0:43:14No, I don't know the initiation of its error or the date.
▶ 0:43:181938. So that means for 90 years, the NTEU has protected hundreds of thousands of employees across the federal government. Without the NTEU, employees collectively lose their ability to negotiate, take legal action, and to advocate for themselves. This administration certainly has declared the IRS to be a battle zone as it cut the workforce by 20%.
▶ 0:43:43By terminating the union contract, it makes it even easier to take apart the IRS. I think we differ over this termination, but I stand by my statement that the Trump administration cannot take away the hard-fought rights of IRS employees to unionize. We have always been and will continue to be an ally of the employees right to organize.
▶ 0:44:11Do you wish to respond to that?
▶ 0:44:12I do, sir. Um, you know, I uh I treat our employees as they're our employees. I'm highly motivated by the work they do. And as I uh would like to remind you, uh my role model was a 44year federal employee in the Treasury Department. He was an orphan and I grew up in a multigenerational household.
▶ 0:44:36uh he was a veteran as was my uh immigrant grandfather who lived with us who joined the US Army to become a citizen. So I understand better than most what it means to grow up in a federal household led by a federal employee. My mom was a working mom also.
▶ 0:45:01Um, and what I like to tell you, having spent my career in the private sector, is that federal employees under statute, under law, have greater benefits than any union in the world can provide for their Their pay is under statute. Their employment is under statute.
▶ 0:45:28Their benefits is under statute, their time off is under statute, their promotions are under statute. I can go on and on. So, I would say that um our employees work for the federal government and they're proud to do it.
▶ 0:45:48They have these federal jobs and I can attest to this being the son of a federal employee because of the benefits provided to them that no private sector union can get for their people. Sir,
▶ 0:46:02So they're losing nothing.
▶ 0:46:04Thanks. So let me lo fairness. I have the same experience with immigrant grandparents who came to a different conclusion. Fair enough.
▶ 0:46:10God bless you, sir. So, since January of 2025, there have been numerous allegations that confidential taxpayer information has been leaked. We've had this discussion. It's substantial. What's the agency undertaking in terms of a response to the issues that have been raised by both sides of this committee?
▶ 0:46:31When I talk about uh larger spans of control and being closer to the workforce, we have functions reporting to me that never had the light of day in the organization. And I'll start with a risk management function which we have a weekly risk management meeting to go through all the issues inclusive of that cyber.
▶ 0:46:59So I think one first and foremost it's the first time in the history of the IRS that reporting into the office of the senior executive is a riskmanagement function. Risk management's a primary job. It allows for preparedness. A thorough review of all cyber is undergoing right now and we are also doing outside having outside reviews.
▶ 0:47:26We will as I have my whole career have private information PII as the foremost responsibility of this agency. It is a responsibility. I take it seriously. I've taken it my whole career seriously for the largest financial institutions of the world.
▶ 0:47:51Mr. Buchanan.
▶ 0:47:54Thank you, Mr. chairman and commissioner, thanks for being here. Uh we have similar backgrounds in a sense that way. I was in business for 30 years, but I also chaired the Florida Chamber. We had 130,000 businesses uh that were in that chamber. And part of my job was to try to work with a lot of midsize and small companies. That's always been my focus coming up here. And people said, "Why are you so focused that way?" And I said, "Because they're the job creators." Most of those 130,000 businesses weren't big companies.
▶ 0:48:23There was quite a few that were most of them 93% were pass through entities and that's why I'm so excited about what we've got done in the tax front and I know you would you'd be feel the same way the corporate rates what it is what it is but I'm excited about the idea of full expensing it's a powerful tool whether you're buying or selling uh and then also 199A is another powerful tool where you get some parody with corporate America in terms of reduction of 20 20% Um,
▶ 0:48:54let me ask you, and you touched on it, but what I'm hearing back home in Florida is on, they're very excited about no tax on tips, no tax on overtime, no tax or 80 minimal tax on social security, 80% reduction. Um, and then no tax on interest on cars or whatever. But the point is, um, give me your thoughts just quickly because I got another question after this. I want to in terms of where that's at.
▶ 0:49:20I know you've hired quite a few people, but the big thing I they want to make sure they get their benefit. A lot of them have, but some of them are a little bit nervous about getting it, and I just want to if you could reassure them, that'd be great.
▶ 0:49:31Well, uh, daily, uh, myself, as have my whole career and the Treasury Secretary reviews of the IRS, and our most important stat is serving the American public, both what comes in and how quick it goes out. Uh and you heard me talk about uh building new technology. So items that took 16 weeks like amended return would be down to a week.
▶ 0:49:59Uh I I uh your passion for small business. Uh through my career I was the largest technology provider to small businesses across America. And uh I understand to me it's the lifeblood of America, right?
▶ 0:50:21Uh and many small businesses are owned by an entrepreneur that in fact really is a risk taker because they're risking their whole family's income on their ability to operate. Our ability to deliver for them is so darn important.
▶ 0:50:36let me just add to it, you know, because we always talk about the billionaires and all that. My wife's here today and we started a company together, two of us, and it's ended up being a billion dollars. So, that's America that I believe in that anything's possible and uh exceptional from that standpoint. One of the questions I get a lot is in in the past is in terms of dealing with the IRS. People have had struggles where they get uh they have a challenge from the IRS and many times that could go on three and four years.
▶ 0:51:04You got legal fees, you got accounting fees, you got everything else. What can we do to expedite or help push to expedite that so people can get back on their feet quicker terms of business people?
▶ 0:51:14I I like to talk about the governance model Sarah that we're running the IRS under which is a pretty consistent governance model and I'm going to hit on one element of it. Obviously the staff and I get together every week two hours once a month all day to go through everything in the agency to ensure we're delivering.
▶ 0:51:32Once a week we look at for two hours, hour and a half to two hours the key operating indicators of the business and we have two levels deep coming in representing their numbers and we now implement aging. How old is the oldest item and you know we talk about beating whatever the best record ever had and then beating it again.
▶ 0:51:57I talked about the weekly risk meeting and we look at every item we procure for over It's a govern model designed to serve the American public. Most of the indicators are about how are we serving the American public? I look at them daily and so does the
▶ 0:52:14Commissioner. One more one more question. Just in terms of uh I think I read something about you looked at hiring 5,000 people or in terms of customer service. Is that what I understand? We uh we we seasonally bring in a few thousand people.
▶ 0:52:30Uh and that that is fundamentally what we do. Uh right now we feel great about the staffing levels. Wait times on the phone are uh single digits. That's uh really good performance. It'll compare with the commercial industry. And in fact, you know, like I said, 43% more transaction queries online everything like where's my refund? So, we've hired staff, built new technology, and deployed other staff in there to serve the American public.
▶ 0:53:01Thanks for your leadership.
▶ 0:53:02Thank you, sir.
▶ 0:53:03I yield back.
▶ 0:53:04Thank you, Mr. Thompson.
▶ 0:53:06Thank you, Mr. Chairman. Mr. Secretary, thank you for uh being here. Um and thank you for the uh work that you're doing. You know, the IRS holds immense power over the American people, as you know. Uh it can take your wages, it can freeze your bank account, ruin your credit. Uh but that power only works in a free country if it's exercised fairly and lawfully. And you know that um Americans are told the law applies equally to everyone.
▶ 0:53:34But that's not what we see right now. They're seeing working families chased over the smallest discrepancies in regard to their taxes. And they see wealthy interest with armies of lawyers slipping through the proverbial cracks. They see speed when the government is owed money and silence when the government owes them money. And they see an agency that demands total compliance while failing to comply with the law itself.
▶ 0:54:03A voluntary tax system depends on trust. And right now I'm concerned that that trust is collapsing with many Americans. The federal law prohibits the disclosure of taxpayer information without statutory authorization. Is that correct, sir?
▶ 0:54:21Yes, sir.
▶ 0:54:22Yet the IRS transmitted tax taxpayer data to ICE without proper authorization. Is that correct? I think I think honestly that's a matter of litigation. Right now, sir,
▶ 0:54:38it is. and a federal court has already found uh that those disclosures were unlawful. Isn't that correct?
▶ 0:54:45Um I actually believe that uh an appeals court actually rendered it.
▶ 0:54:53I'll help you. It is. And I'd like to enter into the record uh this court order showing that the IRS violated the law 42,695
▶ 0:55:05without objection. That's not a typo. times. And it's not a paperwork error. It's a breakdown in leadership. What did you do, sir, to stop it?
▶ 0:55:22We don't we're not going to comment on current litigation. I talked about the risk governance.
▶ 0:55:27Okay. I I'll move off from the from the litigation. Uh, was anybody fired as a result of these 42,000 uh, illegal
▶ 0:55:38No, sir.
▶ 0:55:39Was anyone disciplined?
▶ 0:55:42No, sir.
▶ 0:55:43Was anyone held accountable?
▶ 0:55:46I think everybody's held accountable.
▶ 0:55:49Was anyone held accountable in regard to these 42,695 illegal actions?
▶ 0:55:57I don't want to debate the numbers. I don't want to debate the item. I'm It's a current litigation and I'm not going
▶ 0:56:04We won't We won't debate it, but I just ask that you ask yourself, why should Americans trust an agency that broke the law tens of thousands of times?
▶ 0:56:15Well, yes. Ask yourself. No, I don't I don't I'm not asking for a response. Just, you know, I want you to ponder that the largest portion of the tax gap or the money that is owed versus what is actually paid comes from high income earners. Do you agree with that?
▶ 0:56:33No, sir.
▶ 0:56:34You don't?
▶ 0:56:36Well, you're the largest the largest
▶ 0:56:38you're in a minority because most experts uh do and um and those audits require specialized agents. be we we know that from the past work that this committee is doing. So when you cut staffing, those complex audits uh seem to be the first to go. Isn't that
▶ 0:56:59We just uh settled a $2 billion one, sir. So I don't really think they're the first ones to go, but you could have your opinions.
▶ 0:57:07Looks like we all have our opinions, sir. Um but fewer audits of wealthy tax cheats and more scrutiny of working families. I don't think that builds trust among the American taxpayers. Uh, and I want to enter into the record this uh New York University Tax Law Center report uh documenting uh the shift that I just um mentioned.
▶ 0:57:33Without objection.
▶ 0:57:34Thank you. So, the IRS violated federal law tens of thousands of times. Enforcement resources are moving away from the wealthy. Yet, the agency tells Americans just trust us. Trust is not demanded, it's earned. Right now, the IRS needs to earn the trust of the American people. Credibility and tax administration starts at the top. And I think you have the ability uh to bring trust to the agency.
▶ 0:58:01I would hope that you would work with us to make sure that we can close that trust gap and that gap in money owed and money collected. And I yield back the balance of my time. Thank
▶ 0:58:12Mr. Smith.
▶ 0:58:14Thank you, Mr. Chairman. Thank you uh Mr. Bisano for being here today. These are important issues that we are discussing. Um I think it's uh important to also note as was indicated moments ago that uh federal workers so often work hard to do their job. The most worker friendly thing we can do is pay them for showing up.
▶ 0:58:41And when we have a significant number of federal employees going to work every day to keep us safe, and we're telling them that we'll pay you later while we amass some political leverage here. I think those workers deserve better. The American people deserve better.
▶ 0:59:00And it makes me think about various federal workers who work hard to do the right thing and the bureaucracy stands in the I think we should pay very close attention to hearing from uh various me hearing the messages that can uh oftentimes come from a federal worker who is suggesting better ways of doing things.
▶ 0:59:23And that's why uh a a categorical call it an earmark of $80 billion that would have added more employees that would actually squeeze a lot of dollars sometimes even without authorization out of the middle class with more audits at at the same time when I think there's common agreement that we want taxpayers to have better access to better service and and when the bureaucracy stands in the way we should be concerned.
▶ 0:59:54I'm glad to have led the effort to uh put an end to the direct file pilot program, supposed pilot program. This program was launched without clear statutory authorization. It overran projected costs and created a concerning conflict of interest by placing the IRS in the role of both tax preparer and tax enforcer. We saw troubling indicators that the program was not serving taxpayers as intended.
▶ 1:00:19Uh, for example, individuals who use direct file receive refunds that average roughly $1,600 below the national average. We've even seen recently uh some Democrats acknowledge that the Biden administration launched direct file without the authorization of Congress that we know was required. I was proud to lead the effort to put an end to the pilot program and I certainly appreciate your team's work in helping bring that chapter to a close.
▶ 1:00:46Now moving forward, we know that free file, for example, is an option for the American people. That is an important distinction to make uh between free file and the direct file, the previous direct file, as inefficient as it was.
▶ 1:01:00But looking at free file, I'm wondering if you can reflect a little bit how uh you view taxpayers having access to the free file program and what changes to various options uh you might suggest or are pursuing to expand eligibility or or make make these free file programs easier for taxpayers.
▶ 1:01:19Uh free file free file is uh used. uh well received and uh I think what I am hearing across the board uh asked I asked a question this morning to the national taxpayer advocate uh who actually you know publishes a report at tax season and uh asked a very direct How do you characterize many of the elements
▶ 1:01:49working right now? And uh the national taxpayer advocate who does not report to me uh said it's going smoothly across the board. Uh the outliers will obviously show up in other people's offices and that's why we're here to help them through it.
▶ 1:02:11And um when I talked to the head of taxpayer services, he talked about the uh free file, its utilization, its use, and more uh the amount of trust the American public has in the IRS and their ability to do the right thing for the American public.
▶ 1:02:36We may talk about difficult situations, but by and large, the American public does trust IRS in their matters. By and large, and freight vial and the elimination of direct vial fall in that category, sir.
▶ 1:02:55Well, thank you. I I think you know millions of Americans would concur that your work is important that collecting what is due is important and that with today's technology uh we should be able to see uh a future where taxpayers have more ease in paying their taxes across the board. But uh in the interest of time I must cut my other question short. Thank you.
▶ 1:03:23Thank you Mr. Dogget. Thank you. Uh if you would sir, uh just with a simple yes or no, tell us whether you have received either directly or indirectly any communication from anyone in the Trump regime suggesting that specific taxexempt organizations should be scrutinized because of their political
▶ 1:03:44you have not. Good. And will you commit today that under your leadership the IRS will not initiate audits, investigations, or revocations of tax exempt status based on political
▶ 1:03:58100%. We're here to uh administer the law, app just to be clear what I'm talking about though in that regard. The Wall Street Journal reported, quote, "The Trump administration is preparing sweeping changes at the Internal Revenue Service that would allow the agency to pursue criminal inquiries of some groups more easily." Uh, so are they in era and no such sweeping changes or any changes are being prepared there to use the IRS?
▶ 1:04:27I I I I hope that you understand that every form of the Daily News is not a Bible. That's why I'm asking you about the Bible, sir. Yeah, that that's absolutely right. Uh, and I'm asking you about this.
▶ 1:04:41I've actually never heard that or seen.
▶ 1:04:42You've never You've never heard that the Trump administration was trying to weaponize the IRS?
▶ 1:04:49Then you're not familiar with President Trump's tweet specifically attacking citizens for responsibility and ethics in Washington or crew uh asking that uh its uh tax exempt status should be uh re-evaluated. You you didn't you're not aware of that.
▶ 1:05:05I don't track tweets, sir.
▶ 1:05:07You you don't track truth social. It doesn't have anything to do with your
▶ 1:05:10I didn't find my social media president.
▶ 1:05:12This is the president, of course, is not very interested in ethics. So, I was concerned about that. Let me switch then to the question of audits. Uh, as you know, the audit rates for large corporations have fallen about 70% and of those making over $1 million have fallen by about 50% over the past decade.
▶ 1:05:33Can you uh assure us that you will restore the ability of the Internal Revenue Service uh to ensure that our tax laws are u implemented and applied to those who have the most power in our I've uh heard before a comment about the tax gap. Uh I want to be very clear in general of uh the objectives that both the Treasury Secretary and myself have.
▶ 1:06:02First and foremost, higher service for the American public. Second, higher collections. And then third, privacy. Right? We are here and when I think about the tax gap and why I it's been reported for years the tax gap right
▶ 1:06:21yes sir and
▶ 1:06:21we're doing analysis right now to understand what the reality of the addressibility of the tax question but it's not my question to you and I
▶ 1:06:30well it's all inter interrelated it may not be your question but if you don't do your job on audits then you have a tax gap but my specific question
▶ 1:06:38well if you make compliance easier we have countries countries that have higher compliance rates than my job is to increase compliance and increase
▶ 1:06:47I'm glad you recognize that job and uh my question again just so it will be clear and I think I may get the numbers just right
▶ 1:06:55uh over the last decade the the audits of large corporations have declined by 50% and those earning over a million dollars have declined by 70% and I'm asking you if you're going to restore those audit rates to where they were over the past decade or those people will continue uh to be able to be
▶ 1:07:17We're going to increase compliance. We're going to increase compliance. We're going to have an easier way to operate with us. and we have we have 30,000 people working on compliance and
▶ 1:07:30so as a result of that we'll be able to see that those audit rates rise to the level they were at and that people that are at the top
▶ 1:07:36there's nobody that told me ever including yourself that those were the audit rates that were the standard audit rates. Let us go do our let us go do our work the right way and then we will get the right outcome. You're asking for a commitment to a number that's never been proven out to be the right number. It could be bigger. It could be smaller.
▶ 1:07:58I'm asking you to treat those at the top the way you've treated those at the bottom. And we're not seeing audits.
▶ 1:08:04We're going to have the fair. We believe in fairness.
▶ 1:08:06And that's why we have a tax fairness.
▶ 1:08:09Fairness is equity.
▶ 1:08:11Equity appropriateness going to require dealing with those at the top the same way as those at the bottom. And that's not happening now. And I'm not assured from your answer that you're going to raise those audit rates to a level where we will see the powerful treated as everyone else is treated. Thank you very
▶ 1:08:27Mr. Kelly.
▶ 1:08:27That's the way you wanted to hear my
▶ 1:08:30Thank you, Mr. Chairman. Uh, Mr. K, thanks for being here today. I can't imagine anybody wanted to head up the IRS and head up social security. And as the old saying goes, the beatings, it's an honor.
▶ 1:08:42Yeah. Well, the beatings will continue until morale improves. Um, I can just tell you coming from the private sector, the greatest fear we always had in our business was that we weren't in compliance with something or other. And, uh, and there's a lot of people in and out of the dealership that I don't pay, the taxpayers pay them to come in and do audits on us. So, I understand the the importance of audits.
▶ 1:09:06um if you could because in the beginning when you when you did your introductory so for years we would have commissioners of the IRS come in we never had anybody that had come from the private sector with the experience that you have when you talk about ferf uh the largest financial service and payment technology company I am really glad that somebody you like you decided to step out of the private sector that was much more comfortable and much more profitable, by
▶ 1:09:36the way, and to step into this and try to get it straightened out. There's nothing more feared in this country than not complying with the IRS because they can completely shut you down. In fact, I have a friend of mine who spent over $3 million so far in defending an IRS investigation. He's uh these are legal fees uh which he'll never recover. Uh, but we're still working on it with them and I and I'm and I will work with you on it because I I know I'm I'm I'm glad to talk to somebody from the from the private sector.
▶ 1:10:06I I really believe that nobody should be in public office unless you had experience in the private sector where you worked on commission only and you lost your job at least once through no fault of your own. That's the only thing that really matters. And I and I get the idea that the rich don't pay their fair share, but when you look at the percentages of it, thank God for the rich because they they pay they pay an awful lot. Uh during the financial crisis, what you talked about uh if you could I I just want to go through this.
▶ 1:10:34So earlier this week, the IRS published it schedule 1A and form 1040 instructions for middle class taxpayers can utilize to deduct amounts for tips, overtime, car loans, and enhanced deductions for seniors. This is an incredible boost to the hardest working people in the nation. Uh so this working families tax cut that it helped everybody. Everybody.
▶ 1:10:57Um if you could uh can you just maybe expand on that a little bit more and and the fact that that what people they get to keep more of their own money than they ever have
▶ 1:11:09Yeah. I mean, uh, landmark legislation, uh, and I give I give everybody a ton of credit. Obviously, the president, but you know, obviously everybody here had a role in it. Let's just think about it. No tax on tips, no tax on overtime, no tax on car loan interest, no tax deductions for seniors, uh, Trump accounts.
▶ 1:11:32We have over 2 million forms 4547 and over three million dependent right now right expensing for qualified factories and then I think the permanency matters a real lot domestic R&D expensing expensing for capital right 199A you and I talked about small businesses right pass through you know ibidas standard there.
▶ 1:12:02Double standard deductions, child tax credit expanded and permanent opportunity zones, you know, protecting the 21% rate. It's fueling stimulus.
▶ 1:12:16What what I think everybody has to recognize also is that was dominantly $100,000 and under AGI, but they also have a lower withholding this year and are getting a double benefit.
▶ 1:12:37the benefit of a tax return that wouldn't have happened without the Working Families Tax Cut Act and the benefit of lower deductions right now. Um I think I think we're going to see the long-term effects of this. Uh and I commend you guys for your hard work.
▶ 1:12:56Well, I I will just cover this with you because I'm still in the private sector. gentleman named Thad Gazo runs our service departments and I was saying talking to him and I said, "Hey Thad, we we've got to get the guys to come in on Saturdays. We can pay them time and a half or double time. Uh we've got work in the back that needs to be done." And he said, "Uh, Mike, are you kidding me?" Because when they work overtime, they look at that and say, "You know what? It was better for me if I didn't work overtime.
▶ 1:13:22By the time I get done paying the other costs that are involved in in my family at home, I can't afford to come to work and work overtime because I get taxed so heavily on it. We had the most upside down incentive for people working overtime and it comes down to the seniors that have worked their whole life. They get to keep more of their money. There's so many things in the in this bill, the family tax bill. This is an incredible boost to the morale of the American people. And I will tell you this, I appreciate I looked at your resume.
▶ 1:13:50What in the hell were you thinking to step out of that role and to come into this jungle and you're going to get the living crap beat out of you no matter what you do, good or bad, and we'll go back and we'll drag up things that happened before and say, "Oh my god, this is horrible." And it depends who it is that's sitting in the White House. If we could work together on things that affect the American people, and I'm talking about strong policy that allows hardworking American people to keep more money in their pocket for their families. So, I want to thank you for stepping out of where you stepped out of.
▶ 1:14:20Why in the world you would do that, Social Security and the IRS, my God, uh you're never going to be able to finish the complaints on it. But I appreciate what you're doing and I especially appreciate the staff that works every single day to get this done for the American people. Mr. Chairman, I'm sorry to go on, but I can tell you what, this has never in the life that I have as a private sector person seen the results of this in the incentive now for hardworking American people. They want to work overtime because they get to keep the money. They don't have to pay it to the government.
▶ 1:14:49They're able to to actually put it back with their families. So,
▶ 1:14:52can I make chairman? Can I make one comment about employees?
▶ 1:14:56We're over Yes. Did make your comment.
▶ 1:14:59There was an executive order that gave the 24th and the 26th.
▶ 1:15:03Mr. Chairman, regular order.
▶ 1:15:05We're in regular order. The chairman has the floor.
▶ 1:15:0824th and 26th off. And uh given the fact that we had a shutdown and that that was a hardship for a lot of our people, uh we gave them the opportunity to volunteer and come in.
▶ 1:15:24And in fact, I believe because of what Congressman Kelly said, the change in tax status on overtime, we had volunteers come in and work on the 24th and 26th serving the American public when it never happened before. So that's about the morale of the people and the good work done here.
▶ 1:15:48So, I just think it's important you recognize we have people volunteering to come in, get overtime, and serve the American public on days that were considered holidays.
▶ 1:15:59Mr. Larson.
▶ 1:16:01Well, thank you, uh, Mr. Chairman and Commissioner. Thank you. And, uh, I always like to follow Mr. Kelly. I think a number of the things that he he said have great relevance, including, uh, your integrity and resume, etc. and I appreciated the meeting that the chairman uh organized with me and Mr. Neil and yourself. But I want to pick up where Mr. Pointed, Mr. Neil was making earlier. Before I do that, I'd like to submit for the record, uh, Mr.
▶ 1:16:30Chairman, the Borgous whistleblower report, the DOJ amended court filing and the IRS fiscal service defy judges terminated union contracts, which is where
▶ 1:16:42without objection,
▶ 1:16:44where I want to go. uh starting with that and you seem to in your answer to Mr. Neil say, "Well, they don't need this. It's in statute." So, my question to you are should the uh Social Security Administration, their employees expect that their uh union contracts will be terminated as well?
▶ 1:17:04I'm the uh CEO of the IRS in this hearing and I'm I'm not If you want to have a a meeting on SSA, you know, I'm always willing to have it with you, sir.
▶ 1:17:13All right. I I I I get the answer. And uh well, but my grandfather Nolan as we get close to uh St. Patrick's Day would always say, you know, trust everyone but cut the cards. And uh so I would
▶ 1:17:26I know I know you love that saying, sir. I appreciate it.
▶ 1:17:30And uh and we need a reshuffle in the New Deal, as a matter of fact. and uh FDR would appre appreciate the reference, but also uh I wanted to ask you uh do you will you turn over to this uh the Doge information that they gave to an outside political source to alter Now, I realize it might have happened before your watch, but Social
▶ 1:18:00Security has that information. If you want to talk about social security, I come see you anytime you want to talk about social security. There's an IR.
▶ 1:18:11Okay, that's a no. So, uh, Mr. Chairman, would you commit to subpoening this information? And I would think that everybody on this committee would want to know when your personal data and information is being poured over by outside groups that are unaccountable, have never been vetted and are in these and have this information that they have given to outside sources.
▶ 1:18:42I'd also like, Mr. chairman to get the whistleblower before us as well. My god, we were all upset and we made sure that Hillary Clinton's emails and h Hunter Biden were top of the list. We had to make sure about that.
▶ 1:18:59But when it comes to the American people and the data and that is gone through by Doge employees and then distributed to outside people, does anyone on the other side want to investigate or get to Or is this just something we let fly?
▶ 1:19:23the commissioner is not going to answer because he's going to say, "Well, look, I'm here to discuss the IRS and if you want to meet with me privately, aka uh that's called the Tuscaloosa two-step." He's not going to answer the question. And I understand that. But hey, uh it's not about answering the question. It's about the integrity of this committee. I commend the chairman. He brought them in to talk about these things that have been ignored by the committee, that have been ignored by the agency in not addressing this.
▶ 1:19:51But as members of this committee, we have a responsibility to the American people, especially as it regards to Social Security, the number one anti-poverty program for the elderly and for children. I get calls all the time in my district, from people saying, "What have they done with my information? Who has my information? Is it in a cloud? What does that mean? It's in a cloud. Is it unsecure? What happened?
▶ 1:20:19And why is it that we can't get the names? This was the Trump judicial department that indicated that these people fraudulently gave information, private information of the citizens of the United States to an outside source who was using it to alter elections. That doesn't interest any of you on the other side.
▶ 1:20:48It sure does interest the American people and we need to continue the integrity of this committee by calling forward these individuals. Mr. Chairman, I hope you will subpoena them. I hope we will lift, you know, a resolution of inquir. Are you guys going to suspend that again so that we can't call witnesses before us? Thank God at least the commissioner was here.
▶ 1:21:15Mr. Schwher.
▶ 1:21:17Thank you, Mr. chairman, Mr. Besonado. Um, okay. Going back to 2017, um, when we were working on that, we actually had a data set that basically said simplification was the most powerful thing we could do for taxpayer Um, in that since that time, I cannot tell you how many meetings I've had with your technical staff. Um, because I' I'd love to have the conversation where we're not going to argue tax economics right now, efficiency.
▶ 1:21:46I just want to talk management with you. You know, you have this actually pretty impressive resume of technology, moving money, those things. Um, how do I get how do I help you get the IRS off of its own servers? It's absurd. Um, when you actually still have that audit from a few years ago that your server farm and what is it, West Virginia, the floor is sinking in.
▶ 1:22:14um get, you know, if the Pentagon can use encrypted cloud, why can't you? Um the technology that um grandma can call a phone number, it's actually an AI, but it is beautiful and smooth and stays on the phone with you and will help you fill out your paperwork and text you the the YouTube video of how you do it. The PDF of the form will stay on the phone with you all night. That's not cutting edge technology.
▶ 1:22:43That's three, four years ago. Now, I I appreciate all the statements and the written testimony of you actually for the first time use the word AI and things like that. We're in a time of revolution. If my brothers and sisters up here want compliance from the wealthy all the way down, why can't I have my taxes on my Wh why can't I have something that interacts with me?
▶ 1:23:13This isn't cutting edge technology. Um help me help me understand what I have to do as a policy maker to stop having more meetings with your people that tell me, "Oh, that would be hard. Our union doesn't like hard."
▶ 1:23:28What do I do?
▶ 1:23:30I like hard. Right. I think our job is to make hard look easy. Right. Get great athletes make hard look easy. Great leaders make hard look easy. Um, I'm happy to come visit you because I'm sorry that you spend so much time with people who told you you couldn't. And I will tell you, we will. Um, we're we're five months into me being in the job and you're seeing 43% more queries online. We're talking about 40 million more.
▶ 1:23:58I understand.
▶ 1:23:59Right. And so that's the beginning. And I'm happy to partner with you. I'm happy to do anything in the world to make it easier for the American public to file their taxes and to get served by us and to increase compliance. And the only answer to that that I know through my whole life is technology is the great enabler. It
▶ 1:24:22it look, you just nailed the language. Now we need the execution because I've been making an argument to our fellow members here. It wasn't about sticking bodies in chairs. It was the adoption of the technology that makes taxpayers every American's life easier. And you know, I'm tired of the references saying, you know, we have technology going back to the 50s and 60s. You don't need to go find a forran coder anymore.
▶ 1:24:49You have this things, you know, transl, you know, the translational, you know, bolt-ons of AI can just take the code and put it into whatever the hell you're using. um and you you run them in parallel for tax season and you know you're safe. It's not like it was just two years ago.
▶ 1:25:07Go hire some data scientists that are revolutionaries and bring us into this and and and there's a handful of us up here that believe that's both moral, incredibly efficient, and actually would dramatically raise compliance. And if coming and having another meeting with with our team, great. Um, but maybe I should set up meetings with, you know, AI coders for you.
▶ 1:25:37What do I do?
▶ 1:25:39Sir, I've overseen the largest technology organizations in the world, JP Morgan, City Group, both in times of of number one function we had in my last company was a software developer. What we were we were a third of our employees were software developers and we had thousands of employees.
▶ 1:26:05If you want to give me some resumes, I'm happy to have them, but I know how to recruit technology talent.
▶ 1:26:10My point is, but my point is you and I grew up in a time where we hired a team, you know, um to
▶ 1:26:16Not anymore. I I'm I'm still I'm not done growing up, okay? because I'm transforming. We're not modernizing. We're not modernizing the IRS. It's not a word I use. We're transforming the IRS. And we can only do it through advanced technology. And that will increase compliance and increase simplification. And you should expect 27 to be far better than 26.
▶ 1:26:42And 26 is far better than 25 and 24 by a boatload. Look, I'm a big fan of everything I know about you. Let's let the revolution of making people's lives easier and better and do this better, faster, cheaper, and more accurate. Thank you, Mr. Chairman.
▶ 1:26:59Mr. Davis,
▶ 1:27:02thank you, Mr. Chairman, and uh thank you, Mr. Vignana. I thank you for confirming that the carry forwards qualify as refundable in 2025. So thank you.
▶ 1:27:19I also want to thank Pette Liil with taxpayer services, the office of tax policy, and Robert Chapman in ledge affairs for their careful implementation of the partially refundable adoption tax credit and also the amazing experts at the joint committee for all working to make this possible.
▶ 1:27:45I'm also deeply concerned though that the Internal Revenue Service has delayed over 530,000 refunds this year to date by requiring a bank account, especially knowing that these taxpayers are likely the individuals who need their refunds the most.
▶ 1:28:08So, first could you please provide me and the members of this committee a copy of the C5 CP53 e note being sent to tax filers who do not provide bank account information.
▶ 1:28:26Yes, sir.
▶ 1:28:29Thank you for that. Um, finally, on the IRS website, it states, "If you don't respond to the notice, we will issue a paper check after 6 weeks." So for taxpayers who don't respond to the letter, their paper refunds are delayed at least two and a half months, which is 30 days for the letter plus 6 weeks according to the
▶ 1:28:59website. So for individuals who do respond, when does the six week clock begin to tick for them to receive their paper check?
▶ 1:29:14Well um I will go back and look at the whole process sir right now uh if you have direct deposit which is you know fundamentally more than 98% uh you know we are doing that within 9 uh I'm positive that uh the six week was decided quite some time ago and we will go look at the whole process
▶ 1:29:41thank you very much could I also would like to receive the state bystate data because that helps me and I think it might help other members know where these people are located and how they can be more effective trying to do outreach to them.
▶ 1:30:06So, could we get that state by state?
▶ 1:30:09I'll go find out. I'll go I'll go take a look at it, sir. I'll come back to you.
▶ 1:30:14All right. Thank you very much. And also before closing, I want to praise the work of the Chicago Office of the Taxpayer Advocate Service under the leadership of VZ Olam Bumo, Katrina Britt and Fred Tavarez, who have professionally helped two of my PEO constituents on their ERC claims for three and two years, respectively.
▶ 1:30:44I also want to thank Richard Jones, Andrea Dunlap, Nicole Nandapa, James Grizz, and Anna Alvarez who've all done great work for us in the Chicago region. And Mr. Chairman, I would ask unanimous consent to enter into the record the tax notes article which is an excerpt from the IRS website about the delayed refund.
▶ 1:31:14Without objection.
▶ 1:31:16I thank you, Mr. Chairman, and you're
▶ 1:31:19Thank you, Mr. Le Hood.
▶ 1:31:21Uh thank you, Mr. Chairman, for having this hearing today. Um Mr. Bisnoni, uh great to have you here. Um I've said this before when we've had conversations. Uh grateful for your private sector experience, your business experience um for a lot of years and bringing that to this job I think is immensely beneficial and I would just continue uh to advocate to you to not shy away from your experience in the private sector.
▶ 1:31:48There are plenty of things you could be doing in your career um besides being the CEO of the IRS. And so we're grateful um and I'm sure your wife probably wonders that too on why you're doing this job, but we are grateful uh that you've stepped up and taking on this role um and want to compliment you on that and a very uh a very very difficult job that you have.
▶ 1:32:09Um before I get into my questions, I do just want to acknowledge obviously the important uh the importance of constituent service and the role the IRS plays um for my office, but for every member of Congress. And uh one area particular for my office is the work with on IRS case work. Uh over the last year, we've helped 108 constituents recover over $13 million owed back from the IRS.
▶ 1:32:34Uh, one specific example was the recovery of 3.7 million uh from the IRS uh to one of our service agencies in my district that provides direct care payments to persons with developmental disabilities. Again, um proud of that work and working with the IRS to do that. Um the the title of today's hearing um Mr. CEO is 2026 filing season implementation of the working families tax cuts and the Trump administration's priorities for the IRS.
▶ 1:33:04For most Americans, the clearest sign the system is working for them is the size of their refund. And as of February 14th of the 2026 filing season, the average refund amount is up by an impressive 14.2% over the same point uh as last year. And the average direct deposit refund is up Meaning families are seeing noticeably higher and larger deposits hit their bank accounts compared to 2025.
▶ 1:33:35From your vantage point, what factors are driving these double-digit increases in average refund and average direct deposit refunds amounts so early in the 2026 filing season? And what does that signal about how the working families tax cut and other reforms are reaching middle class households?
▶ 1:33:54Well, today with uh 55 million almost 60 56 million uh returns already submitted and when we uh tax filing season and we decide that's closes on the 15th, we're 40% through the volume and really the systems have held up extraordinarily well and the people are doing outstanding job servicing the American public.
▶ 1:34:19um 43% of those returns have a schedule 1A and therein lies the answer, right? No tax on tip, overtime, no tax, senior deductibility, no tax on car loans.
▶ 1:34:38You know what I find so encouraging and many of you have talked about this already is the fact that the largest filing category is no tax on overtime, right? Congressman Kelly talked about it, I talked about it for our our federal workforce. We're encouraging hard work here also.
▶ 1:35:01Um, and then you know I think you know probably the largest economic benefit at the is the senior deduction, right? The ability for them to have that deduction. But all of this is putting more money into the system, more money in people's pockets. I like to say higher refunds, quicker refunds, and future deductibility.
▶ 1:35:29So they're also seeing the benefit right now in lower uh deductions because of these benefits. So I think you guys have done an outstanding job in in getting uh what is landmark and cornerstone legislation. The American public are feeling it really deeply and uh we're we were really surprised.
▶ 1:35:53Uh, President's Day weekend is supposed to be this huge call volume weekend and it didn't amount to itself because we have 40 million more online queries. We have the ability for everybody to go online to my where's my refund and find out where it is. So, the American public is getting served better while they're having uh quicker refunds and bigger refunds.
▶ 1:36:19And I will tell you at 100K and below you know that's fundamentally today you know uh performing at a level of putting hundreds of dollars into their pocket and at 775 uh as the current uh increase in refund $775 and like I said earlier our research and analytics group trended it out from where it started to where it is and it holds up to a thousand per refund going to be higher this year.
▶ 1:36:48Thank you for your service. I yield back.
▶ 1:36:50Miss Sanchez.
▶ 1:36:52Thank you, Mr. Chairman. Mr. Bizigno, as you sit before us today, President Trump's underst staff, underfunded, and corrupt IRS is already backing down on its promises. Americans won't see the thousand refunds that they were promised. They can no longer use direct file, and they risk having their sensitive data shared illegally with other agencies.
▶ 1:37:16A United States District judge found last week that the Internal Revenue Service violated federal law 42,695 times when it shared confidential taxpayer addresses with immigration enforcement officials last summer. There have been two injunctions by federal courts ruling that the IRS illegally shared private taxpayer information. And I would like to ask you how the IRS is handling this issue.
▶ 1:37:45Is the IRS currently sharing or planning to share any taxpayer data with DHS or Uh first and foremost, uh as I said before, we have current litigation going on and we're not going to comment on current litigation.
▶ 1:38:03Uh I also uh have law that says we have mandatory responsibilities on some of these issues to share data and those are legal
▶ 1:38:18Mr. Are you an attorney?
▶ 1:38:21Are you an attorney?
▶ 1:38:22No, but we have 2000 we have 2,000.
▶ 1:38:26Excuse me. Don't talk over me. Then let me share some information with you because there are three court cases concerning the unlawful sharing of sensitive data from the IRS with DHS and ICE. One of them said facially a memor about a memorandum of understanding that you could share but only in specific cases not a broadbased grant of power for the IRS to share that sensitive information.
▶ 1:38:53And in fact, two courts have upheld injunctions saying that the IRS cannot share in a broad-based manner sensitive taxpayer information. So my question to you is, has any taxpayer data been shared with DHS or ICE since November 21st of 2025?
▶ 1:39:14I uh I don't know of any. And once again, we are in the midst of a litigation, which you keep referring to.
▶ 1:39:22I understand that you're in the midst of litigation, but two court injunctions have been upheld because section 6103 permits data sharing only with law enforcement officers who are directly engaged in a specific criminal investigation. Again, as I've stated, it is not a broad grant of authority to share thousands of people's sensitive information.
▶ 1:39:48The Fitzgerald declaration filed in CEDC versus Bessant in the Massachusetts District Court showed that multiple different ICE employees had access to this data and that they compared addresses against those individuals with removal orders. And last month, the Massachusetts District Court enjoined ICE from acting or even viewing any of this illegal data.
▶ 1:40:14So, can you identify since this data has been shared and the courts have found that it should not have been, can you identify even one individual criminal investigation that was being conducted by the officers who received that data? Was there a specific
▶ 1:40:36I think I was I think I was pretty clear, ma'am, that we have litigation going on and we're not going to comment on litigation.
▶ 1:40:43What about this? Has a single criminal prosecution resulted from the 47,000 records that were shared illegally? Any prosecutions? I think the answer is probably no. A few weeks ago, I led my Democratic colleagues in requesting an investigation into this issue by the Inspector General of Tax Administration, and they are now in the final stages of their investigation.
▶ 1:41:12So, I guess we will find the answers to these questions and those who are responsible for illegal sh illegally sharing this data hopefully will be held accountable because when taxpayers file their tax returns, they don't expect the IRS to take that information and share it with people that they're not authorized to share it with. And with that, I yield back the balance of my time.
▶ 1:41:37Mr. Estus. Well, thank you, Chairman Smith, and welcome, Mr. Miziano. It uh as chairman of Social Security subcommittee, I appreciate our work together on the Social Security side of your portfolio. But, you know, currently we're in the middle of the tax season, uh which is the first one since the working families tax cuts, uh which is a monumental shift for American taxpayers. In Kansas, folks in my district are finally seeing the the the benefits we fought for.
▶ 1:42:02No tax on tips, no tax on overtime, the $6,000 senior tax deduction, and so much more. Thanks to the working family tax cuts, 94% of my constituents in the fourth district of Kansas are having an easier time ever filling out their taxes due to the boosted standard deduction. Average refunds are expected to rise nearly $1,000 compared to last year with the middle class getting the largest relief of any income group.
▶ 1:42:27And the AARP estimates that seniors will get an average refund of $1320 from the senior tax deduction. You know, not too long ago, my Democrat colleagues funded acres of IRS agents through their inflation act. This bottled up tax returns with audits and errors harming working families in Kansas and across the country.
▶ 1:42:47You know, I I continue to get questions about uh why individuals 2022 or 2023 or 2024 returns were so slow in getting back and being processed, which were hampering individuals and businesses in what they were doing. And now under President Trump, the IRS is focused on what matters most to American families. Quick and accurate returns compared with reliable customer service. Critical component of the improved service is modernizing the agency to provide taxpayers with better experience with the IRS.
▶ 1:43:18Specifically, the IRS is enhancing taxpayer services by upgrading technology to modernize systems with AI integration to do more for taxpayers and and by helping staff be more efficient. These changes already shown significant improvements in IRS operations. In 2025 tax year filing statistics, the IRS has been able to process 2.3 million more returns when compared to 2024 under the previous administration's bloated budget.
▶ 1:43:45Early 2026 tax filing data showed that President Trump's IRS is building on last year's success and continuing to improve the taxpayer experience. The provisions in the working family tax cuts have and will continue to provide so many benefits to the American taxpayers and it will be extraordinary for years to come. I'm honored to be part of the committee and to join in on this important conversation of how to celebrate our successes and look at what we can do more in the future to bring affordability back to the kitchen table for so many Americans.
▶ 1:44:15Uh CEO Biziano. Uh for years CEO and others have warned that the IRS has been running the tax system on outdated technology dating back to the 60s and 70s. Maintaining this patchwork is expensive. Independence analysis noted that in 2024 the Biden IRS wasted over $39 million just to keep 34 legacy systems on life support. GAO has repeatedly cautioned that such legacy environments drive security risks, staffing problems, and higher long-term costs.
▶ 1:44:45In sharp contrast under President Trump, the IRS has cut roughly $2 billion from its 2025 IT budget without operational disruptions, just singling how bloated the prior spending has become. Can you walk us through u the process for retiring these decades old legacy system and how are you pri prioritizing modernizing systems so that the biggest risks and most taxpayer visible systems are addressed first.
▶ 1:45:11Um I've had the uh benefit of spending uh fair amount of my career overseeing financial services technology and uh you know I've spent uh a lot of time converting systems. I've could honestly say and my family would attest to it. I never had a three-day weekend because back in the day three-day weekends were times to convert systems and retire systems.
▶ 1:45:42And uh I will tell you our technology leadership our CIO is very very strong and uh we've moved from this concept of modernizing to transformation uh because modernizing will just get us the next legacy system. And so you could think about it in a set of components.
▶ 1:46:02Uh the most important thing is for our our clients, our overseers not to actually know this is going on but get the benefits the benefits of uh what today's technology can afford which is much better than three years ago. So uh there's a 10-part plan.
▶ 1:46:23uh the plans being executed against uh that we will be retiring systems and we will be running more modern modularized systems. The clientf facing elements of this to me are the most important things and those are the ones that we're getting the benefit now of and that's why you hear me talking about our ability to uh do an amended return which took 16 weeks and do it in a week to be able to do 43% more volume and actually
▶ 1:46:54have it cost us less. Uh and that's why you hear me focused on procurement because we buy a lot of technology and we need to be smart. We need better partners. I also uh and I was surprised by this for the first time uh someone called the tax the heads of the tax preparers and said we need you to do a better job for us.
▶ 1:47:21and they said love to uh and this is this is really the our taxpayers deserve a seamless experience from whether they're doing it themselves on free file whether they're using one of the preparers and there are many preparers out there straight through to us and everybody having the same communication so I think that's what you'll see as we talk about preparing for the 27 tax season a completely different approach
▶ 1:47:50well thank you very much for being Here I yield back. Chairman
▶ 1:47:52Miss Soul.
▶ 1:47:56Well, congratulations, sir. I understand that you're before this committee as the chief executive officer of the Internal Revenue Service, which is a newly created position by uh President Trump. Sir, do you believe that the American people deserve a leader of the IRS who has been confirmed with the full trust and confidence of the Senate? Yes or no? Simple yes or no.
▶ 1:48:21Well, the Treasury Secretary
▶ 1:48:23Yes or
▶ 1:48:24fully confirmed.
▶ 1:48:26He's the acting commissioner and in fact my time to serve.
▶ 1:48:32I'm reclaiming my time.
▶ 1:48:34I believe I uh that this is very important. The confirmation by the Senate is very important which is why I asked the question. uh you know it's important because I believe that it goes to the legitimacy oversight uh of the of the role a very important role that you play and so my concern uh uh a role that has been duly created by the president is whether or not that new role uh is uh has authority and is constitutional and so I
▶ 1:49:04think it's really important sir that um that you you be confirmed now having said that I'm going to move on um the White House celebrated the one big bill uh and said that taxpayers could expect refunds to rise by an average of $1,000 or more this year. While we know billionaires and millionaires are very happy with their tax breaks, I have heard from my constituents and they're getting back much, much less.
▶ 1:49:34Right now, the average refund is only uh up by $350, and that's the 14% that my colleague referenced. Uh if you also consider the fact that that Trump has illegal tariffs, and those are taxes on the American people, my constituents have costs that and the average American family has costs that are around $1,700 just because of the tariffs alone.
▶ 1:50:01Now, when you add on that that many of my constituents are on the ACA and we did not extend the ACA tax credits, that's even more money out of their pocket. While Trump and his family are expecting a $10 billion windfall from the IRS uh from their lawsuit, if Trump is successful in his lawsuit, he will take 10 million no billion with the B from taxpayer funds.
▶ 1:50:29Uh sir, do you know how many times larger uh that number is over the average American person who gets a refund of $350? Well, good. I can tell you uh Trump and his family will take home 28.5 million times more than the average American family will get back from the IRS this year.
▶ 1:50:54This corruption is what we are talking about when we tell the American people that this president is on a power trip to achieve more personal wealth than to help the American people. Um I also serve as the ranking member of the subcommittee on oversight and I take that duty very seriously. The the level of quality assistance and the degree of service that my constituents and our American uh public deserve from the IRS is incred incredibly important.
▶ 1:51:23While costs continue to rise and massive staff cuts are occurring at the IRS, I am incredibly concerned by the report that President Trump and his allies are using an already limited resource to weaponize the IRS criminal investigative division uh and to intimidate uh attack American taxpayers. I wanted to follow up on what my colleague uh Lloyd Dogget um initially started.
▶ 1:51:50Um, I I really I'm going to ask the question again because I think it's important. Has the president or anyone from the White House asked the IRS to audit, investigate, prosecute any taxpayer or organization?
▶ 1:52:04No, ma'am.
▶ 1:52:06Has Secretary Bessant or his staff made any similar requests? I know that the IRS has procedures in place to help ensure that politics doesn't improperly influence criminal probes and the and the uh Internal Revenue Manual specifically states that the Chief Counsel's Office should be involved in these cases to reduce the possibility of political influence.
▶ 1:52:34Since President Trump was sworn into office, have there been any attempts by the IR at the IRS to change the Internal Revenue Manual to reduce the power of the chief counsel's involvement in criminal cases? Yes or no?
▶ 1:52:51None I know of.
▶ 1:52:52Sir, you have a very very important role that you play and it does concern me that you not only have that role, but you're also a commissioner of the Social Security Administration. Both are critical roles that so many taxpayers, especially my constituents, depend upon. Whether that's managing the tax code or that is providing benefits for seniors so they can live in dignity. These are important jobs. I want you to be successful. I want you to hear me say that.
▶ 1:53:19But I am concerned that the refunds and the delays on these refunds and the myriad of questions that people get regarding uh their bank accounts has been quite confusing. I can say that the call volume in my office has increased exponentially because of it and therefore delays uh have increased and so um I hope that you can do something about that and as I again I wish you much luck in your role. It does concern me that your role has not been Senate confirmed. Thanks.
▶ 1:53:49I yield back the balance of my time
▶ 1:53:52Mr. Smucker.
▶ 1:53:53Thank you Mr. Chairman for holding this hearing. Thank you Mr. Bizano for testifying today. Thank you for being willing to take on this role and I know others have mentioned it as well. I think you bring exactly the kind of experience we need to an agency that badly was in need of an overhaul and improvement and of transformation as you put it.
▶ 1:54:15You know, I think every excuse me, member here has um constituent service individuals and basically, you know, I have several on my staff whose sole job is to step in when agencies are not doing the work that they should do serving our uh constituents and IRS has always been one of our top agencies. This will be individuals who've been waiting for a refund for years, sometimes thousands of dollars, waiting for years.
▶ 1:54:42uh and I I somehow believe that uh under your leadership we're going to see a big reduction in that. I think we're seeing improvement already and so I'm I'm very grateful uh for your work. I do want to um mention um just highlight and Mr. Justice covered some of what I had intended to say to say in regards to the the one big beautiful bill that we passed.
▶ 1:55:06And I just want to remind folks uh of some of the benefits, but the most important was it would have prevented what would have been the largest tax increase uh in American history. uh roughly 22% uh tax increase for the average uh American uh family would have been the equivalent equivalent of on average about two months worth of groceries. The um child tax credit would have been cut in half.
▶ 1:55:36uh and uh draining dollars from uh budgets and wallets when households were still feeling the impacts of the tremendously high inflation we saw under the previous administration. I also want to remind folks that not one Democrat voted uh for this bill and I appreciate so much the leadership of Chairman Smith in bringing this bill uh keeping Republicans together and passing this bill. I find it really interesting today.
▶ 1:56:04Uh Democrats are complaining that the uh the increase in refunds that we're seeing, I heard Miss Su just say, is average is about $350. They're complaining that it's not as high as maybe it we think it is.
▶ 1:56:24But I want to remind folks that had they had their way, had we not passed this bill, the refunds would have been much, much Individuals, families would have seen a 22% increase if Democrats had accomplished what they wanted to accomplish in killing this bill, resulting in the largest increase in a tax increase in history. Uh so tax refunds up nearly 9%.
▶ 1:56:51uh and your figures I think are showing around $3,800 as of uh on average as of last week. I think your point, Mr. Bisgano about the importance of small business to the health of our communities. And so specifically the provisions in the tax bill that affected small businesses like the 20% deduction on the uh 401k that would have gone or I'm sorry on the K1 that would have gone away.
▶ 1:57:20And then we brought back growth provisions like uh expensing of research and development really important to a lot of businesses in my uh area. the full expensing for capital expenditures, the the full expensing for structures for manufacturing, these were already seeing uh the impact, but I guess I was wondering what are you seeing uh specifically in regards to the reaction to some of those growth provisions in the bill. Wonder if you could talk about that just briefly.
▶ 1:57:48Uh you know, as I I said, I called uh the largest tax preparers CEOs who run them. wanted to know two things you know one uh how are we performing right and interestingly enough they the person said we get a lot of phone calls and we're tell them this is going as good as anyone could have expected remember uh there was a lot of pundits out there saying IRS is going to fail there's a large
▶ 1:58:19implementation there's the Trump accounts there's less and they have old techn technology. Well, we're 40% through the tax season and we hear in every corner that uh it's going well. But the second thing they is how beneficial the new enactment was and the permanency was.
▶ 1:58:46And they say it especially for small businesses and they say it especially for people making under 100k. So I use the taxpayer advocate as a form of input. I use the organization as a form of input. And I use external constituents who are embedded in the daily business of preparing tax returns. And I I I I think uh I think we've done a good job across the board, this committee and the execution.
▶ 1:59:14I'm running out of time and I I I know I talked for a while, but I'm just excited to see the impact on investment on businesses. uh over the next few years as a result of the bill. I'm excited to see how the IRS is going to transform. I know already last year two billion I think it was $2 billion less in your budget because you're leveraging uh technology and you're going to continue to do that. So again, thanks for stepping up. Thank you, Mr. Chairman.
▶ 1:59:41Miss Delben.
▶ 1:59:42Thank you, Mr. Chairman. Um thank you, Mr. Bisnano, for uh joining us today. Um, I'm deeply concerned that you don't take the responsibility to protect Americans taxpayer their sensitive information seriously. Under your leadership, you allowed the IRS to violate taxpayers privacy tens of thousands of times. Has been mentions mentioned before. This is a catastrophic leadership failure.
▶ 2:00:08And it also really is a huge hit on the public's confidence in your AY's integrity. You told ranking member Neil earlier today that you have implemented a riskmanagement function that includes risks management meetings uh that discuss cyber policy. Unfortunately, this issue wasn't caused by a cyber attack. It was caused by your department illegally handing over taxpayer information to the Department of Homeland Security.
▶ 2:00:37So again, um what are you doing to rectify this misconduct? ensure that this doesn't happen again and attempt to earn back the trust of taxpayers.
▶ 2:00:49Um, probably never said this, so I'll say it now. Uh, obviously all these events occurred before my tenure. So, but I take I I oversee the I oversee the organization and it's my responsibility to get right and uh I don't know how often you all have overseen a riskmanagement function.
▶ 2:01:09and understand the depth of a riskmanagement function in what is really a large organization protecting Americans privacy, increasing collections and driving higher service.
▶ 2:01:23But does your risk management do something to make sure that people internal to the agency are not providing illegal information to other agencies? You haven't clearly stated that you are making sure that that does not happen.
▶ 2:01:35One one there's an ongoing litigation on this matter. I
▶ 2:01:40So you are not you are not prepared to say that you are going to make sure that
▶ 2:01:44No, I'm going to make sure. I'm just trying to make a point that your words are not gospel, right? The words you're using, the numbers you're using, there's a litigation and I'm not going to comment on it. I am overseeing,
▶ 2:01:57you know, there's kind of an there's a there's a kind of old uh axiom that uh you can't fix something if you don't know it's broken. Do you acknowledge that this has been broken and needs to be fixed at the IRS to protect taxpayer
▶ 2:02:10I'm I'm fixing more things than you want. So, you don't um in the IRS.
▶ 2:02:15And uh we also need to hear from Homeland Security and the president about this infringement on Americans privacy protections. Um, and I am co-leading a resolution of inquiry with representatives Gomez and Sanchez that would require the executive office of the president, Treasury, and DHS to provide information to Congress uh regarding the IRS's improper disclosure of confidential taxpayer uh data to ICE.
▶ 2:02:40Um, normally we'd be able to debate this kind of privilege resolution rule in committee, but earlier this year, Republicans snuck a provision into a House rule that prevents these kinds of resolutions from receiving any consideration in committee or on the floor. And um, it really is a cowardly attempt to undermine transparency for the American people. Um, and uh, you know, one of our jobs in Congress is to conduct oversight.
▶ 2:03:06Um, in late January, um, the Treasury Inspector General for Tax Administration, um, TIGA, released a memo outlining concerns about the IRS's readiness for the 2026 filing season. Um, similar to the National Taxpayer Advocates Report, they cited concerns related to staffing reductions, growing inventories, and incomplete modernization efforts, whatever you want to call that.
▶ 2:03:32Um and they also highlighted potential customer service delivery challenges related to closed taxpayer assistance centers. Um these centers are responsible for assisting taxpayers in person and during last year's filing c season supported about a million taxpayers. Um so Mr. Bizignano um are you taking any steps to reopen these centers?
▶ 2:03:58spent a lot of time on the taxpayer advocate uh letter and on the inspector general's letter and uh I think the results you're seeing in performance today show are you going to reopen these centers show the mitigation factors that went into we are serving more Americans across the board right now
▶ 2:04:22so you're not going to you're not going to reopen centers because in person is critically important this weekend we get this back in our
▶ 2:04:29this weekend. We serviced in had our taxpayer experience day and saw twice as many people as we did last weekend in our taxpayer centers.
▶ 2:04:42There were taxpayer centers closed before I came on board. I have not closed the taxpayer centers since I've been here and we are serving more Americans than we ever have. you are not going to reopen these. Um, and we hear in from constituents across all of us do, um, folks struggling to get information from the IRS. So, we also know, um, that
▶ 2:05:0240 more million 40 more million Americans access to information.
▶ 2:05:07I I yield back.
▶ 2:05:11Thank you. Thank you very much. Um, I'd call on Mr. Hearn.
▶ 2:05:15Thank you, Madam Chair.
▶ 2:05:17Um, Mr. Bizano, um, thank you so much for being here today. Um, you inherited quite a message from the Biden administration on the ERTC program. Can you inform this committee on specific steps IRS is taking right now to expedite review and issuance of refunds to legitimate legitimate law-abiding claimments who properly have qualified for the credit or are not involved in fraud or promoter schemes?
▶ 2:05:42And how is this being done while protecting the program against improper claims so that compliant small businesses and their employees do not continue to suffer cash flow harm from the unnecessary delays? We had uh what I would consider a backlog of over a million items uh and we uh deployed the appropriate resource both from the compliance enforcement and taxpayer services or it was a weekly brief to myself and the
▶ 2:06:12uh treasury secretary and uh as that million and change it was over a million um is less than 29,000 items today and they are all in the compliance arm being worked on right now. Sir,
▶ 2:06:29thank you. And um I have significant concerns about third party financing of litigation in the United States particularly regarding the tax treatment of the profits derived from it. Currently, these financiers are claiming capital gains treatment, and I think it's highly questionable at best that the unadjudicated assertions of harm constitute capital assets.
▶ 2:06:52Would you be willing, your team, to look into uh how the IRS can work with us on this and on the tax treatment of this practice? You know, it's one thing to participate in our court system. It's another thing to abuse our court system by outside funds that manipulate the system, create partnerships and other forward uh derivatives to take this on as a capital uh tax situation when it should be ordinary income.
▶ 2:07:20I will ensure my staff gets what your staff and we'll report back to you, sir.
▶ 2:07:24I appreciate that. And then one last thing in a testimony to your predecessor and the prior administration. Uh everybody on this dis agreed that their offices were basically a part of the IRS because our offices were being pinged so many times that we might have been well been working for the IRS because there were so many complaints about the I want to applaud you because I have had zero zero people reach out to
▶ 2:07:55me during this tax season about the IRS. We we've come to know you both in this committee and elsewhere that you're sincere about this. You bring your business acumen to this. If anybody on this desk thinks that you don't care about the American people, they don't know who you are. And I just want to say thank you. I want to say thank you on behalf of the American people. As you've adequately said, you're not about passing the buck or casting blame on anybody else. You're here to fix a problem.
▶ 2:08:24If we had more people like you in the administration that in the past and in the current future, this would be an important thing. We need more people in Washington DC that want to solve problems, not create problems. That's all the American people want. They just want problems solved. They don't need more problems created, problems solved. really appreciate all the work you're doing. Madam Chair, I yield back.
▶ 2:08:46Thank you, sir.
▶ 2:08:48Thank you. And uh it is getting a little out loud in the um in the audience area, so if you could please keep your um outside, I would we would really appreciate it. Thank you very much. Um Miss Chu,
▶ 2:09:06Mr. Bman, affordability is the number one issue of Americans. As hundreds of millions of Americans are in the midst of the tax filing season, it's imperative that we focus on common sense solutions to improve this process for all Americans. And I think we can all agree that taxpayers deserve an efficient, clear, and affordable system to file their taxes.
▶ 2:09:31And that's exactly why Democrats and President Biden established Direct File, a pilot program allowing taxpayers in certain states with simple tax returns to file directly and for free with the IRS. And it worked.
▶ 2:09:48In just two filing seasons, Direct File hand it back $90 million in refunds to taxpayers and saved $5.6 6 million in tax preparation fees for just federal returns, lowering the cost of tax filing for hundreds of thousands of this progress was totally squashed when President Trump, the Treasury Department, and your agency eliminated
▶ 2:10:19direct file last year, leaving taxpayers with the so-called free file program where the IRS partners with private tax preparer companies to purportedly provide free services. And the biggest winners from that decision were not t taxpayers.
▶ 2:10:38They were the giant tax preparation companies like in it and H&R Block that had spent years and millions of dollars lobbying to keep the IRS from offering a true free filing option. So I want to be very clear free file is not free because what happens is this.
▶ 2:11:01a tax pier taxpayer logs on to file their taxes thinking it will be free because that's what the program is called. So they start entering their information, clicking through page after page and it's only after they've invested time and effort that they are suddenly told they must pay a fee to continue.
▶ 2:11:24At that point, many people feel they have no choice but to pull out their credit card just to finish filing their fees. The private industries that control Freel have repeatedly been caught steering eligible taxpayers away from free services and toward paid products.
▶ 2:11:47into it even paid $141 million to settle allegations that it charged taxpayers who should have been able to file for So when direct file began proving that the government could offer a simple and actually free alternative. It threatened a very lucrative status quo and the Trump administration pulled the plug. So Mr. Biznano, I only want a yes or no answer.
▶ 2:12:16Will you commit to restoring direct file so that Americans are not forced to pay private companies just to file their taxes?
▶ 2:12:27This is the report.
▶ 2:12:29I I said yes or no.
▶ 2:12:31October 2nd.
▶ 2:12:32Yes or no?
▶ 2:12:34It's not a yes or no question.
▶ 2:12:37Well, um, as I expected, you didn't answer. And that's why I just led over 100 members and senators in introducing the direct file act to restore free tax filing so taxpayers don't waste their savings while corporations profit.
▶ 2:12:54So let me say again free file is not free and we will do what your administration refuses to which is actually lower costs for workingclass Americans by bringing back free file. And Mr. Visano. Uh, last year, C Commerce Secretary Lutnik appeared on Fox News and proudly proclaimed that President Trump planned to abolish the IRS and replace it with an external revenue service.
▶ 2:13:23While the external revenue service never materialized, and Trump's illegal regime certainly did not replace income taxes. Instead, it functioned as a national sales tax, ripping $1,700 out of every American's pocket. And when that rebranding failed, then the Trump fired 28,000 IRS employees. That's 27% of the entire agency.
▶ 2:13:53So, your agency is under attack by the president tasked with overseeing it. The result is exactly what you'd expect. worse service for everyday taxpayers and more opportunities for wealthy tax cheats to game the system. That is not right. The pattern here is unmistakable and that is increasing costs for the American taxpayer. And I yield back.
▶ 2:14:24Thank you. I recognize Mrs. Miller, West
▶ 2:14:28Thank you, Madam Chairwoman. And thank you so much for being here, Mr. Bizigno, so that people can hear what you have accomplished in the short period of time you've been here and what a great job you've been doing. The working families tax cuts is a major win for gig workers who support local economies through their products and services.
▶ 2:14:54And I was so pleased that my legislation, which reverts the 1099K reporting threshold back to the $20,000 and 200 transactions, it was finally signed into law through the working family tax cuts. This will keep the gig workers like hairdressers, Uber drivers, and craftsmen who sell products online from being harassed by the IRS for taxes that they really don't owe. Mr. Mr.
▶ 2:15:22Bizingano, for taxpayers who may not have traditional wage incomes such as those gig workers or small business owners, what guidance and tools is the IRS providing so that they can fully benefit from the working families tax
▶ 2:15:39Appreciate your hard work and I appreciate uh the question. Thank you. Thank you for having me here. Uh obviously the gig economy uh over the past 10 years has uh turned into something that Americans rely on.
▶ 2:15:55Uh and um I'm proud to say that during the course of uh this year we put out more than 900 pieces of policy and guidance and um we will continue doing that. Uh I I I applaud the work that you do. I will ensure that we continue the work on the gig economy, communication of guidance and policy.
▶ 2:16:21We've ensured that tax preparers understood it as well as we communicate it to the American public and uh we'll go back and ensure that it's as good as humanly possible and any recommendations your office may have to improve it, we're happy to hear it.
▶ 2:16:37Thank you so much. For most Americans, the clearest sign that the system is working for them is the size of their refund. As of February 14, in the 2026 filing season, the average refund amount is up by an impressive over the same period last year.
▶ 2:16:58And the average direct deposit refund is up meaning that families are seeing noticeably larger deposits hit their bank accounts compared to this time in This provides Americans with welldeserved financial flexibility and is particularly important in my home state of West Virginia.
▶ 2:17:20What exactly is driving these doubledigit increases in the average refund and average direct deposit refund amounts so early in the 2026 filing season? And what is this signal about how the working families tax cuts and other reforms are reaching middle class households?
▶ 2:17:41uh you know fact that we have 56 as of uh the second we have 56 million uh returns uh and 23 million have schedule 1A and schedule 1A when I think about it is all the hard work that you did for the American public right if you look at the 1A is you know I like saying overtime time filers are
▶ 2:18:11the largest individual category. There's no harder working Americans than over people who work overtime, right? And then you think about the senior deduction, which I know many of you were were very very interested in having happen. Um, and I think that'll probably be the largest form of it.
▶ 2:18:33We also see that people under a 100,000 are fundamentally the largest beneficiaries on a percentage basis. And when you look at it, uh I just think it's important to think about no tax on tips, no tax on overtime, no tax on car loan interest, no new tax deductions for seniors.
▶ 2:18:54Let's not forget 4547 which has two million forms that's the Trump accounts and three million dependents already enrolled right and then expensing qualified factories on top of that you have domestic R&D expensing you have expense for capital investments full expensing 199A pass through and I hesitate because I think about the small businesses the lifeblood of America,
▶ 2:19:26you know, double standard deduction, double debt tax exemption, tile child tax credit, expanded and permanency. These are all permanencies uh and then opportunity zone. So, you know, um and you know, assault extension until 2030.
▶ 2:19:48So the power of it and we talk about fundamentally a thousand and I think that's what our research group shows 775 today and it will trend upward as time goes on. Powerful powerful uh great adherence and hard work by the American public in getting their tax returns in at the rate they are. And we gentlemen we need to wind up. Thank you. I yield back my time. Thank you. Thank
▶ 2:20:18Just exciting.
▶ 2:20:19I recognize Ms. Moore.
▶ 2:20:24Thank you, Madam Chair. And I just want to thank uh our CEO for appearing today. Um you are the CEO. You're the first one as you mentioned. And I'm wondering how your duties or your perception of your duties have changed with being the CEO. Is it because of your tremendous uh and impressive background in data or is it or has it expanded in other areas that you want to share with the committee?
▶ 2:20:54Well, um first of all, I take the uh responsibilities uh with the utmost respect for what the job is. And the job is uh administering the tax code, overseeing the agency that has 5.3 trillion of revenue, uh the 70 plus thousand employees.
▶ 2:21:21Thank you. That's a that's a that's a good answer. Uh and the reason I'm asking that question is because uh there Treasury is planning to issue uh limiting who qualifies for the refunded portion of certain tax credits. And I just wanted to be clear that you don't perceive your duties or responsibilities or authorities to write tax law. I mean do do you agree with my assertion that you do not write tax law?
▶ 2:21:52I agree so much. You heard me define my responsibilities and one of them was not
▶ 2:21:56to write policy. Exactly.
▶ 2:21:59So why is it that the Treasury um so first of all in the 2026 election cycle have you implemented your plans to limit who qualifies for the refunded uh portion of certain tax credits?
▶ 2:22:18Um, currently non-scitizens with work authorized social security numbers who meet other eligibility uh rules can claim several refundable credits. Uh the earned income tax credit, the the uh additional child tax credit, the American opportunity tax credit, the savers match credit uh as examples.
▶ 2:22:42Um now the um uh the implementing legislation to implement the welfare reform the the PRW the priora limits eligibility for federal public benefits to non-citizens but have you overlaid those exclusions from prior onto tax credits?
▶ 2:23:11me p federal public benefits are not tax credits. Have you done that in this cycle?
▶ 2:23:19No, ma'am.
▶ 2:23:20Okay. Thank you. I'm pointing out uh to the committee here that the uh Treasury Department is attempting to uh issue guidance that would uh would disqualify non-citizens, even those who are legally in the country with social security numbers, uh from receiving refundable tax credits.
▶ 2:23:48um even though they uh and you know they're working here, they have work uh and social security numbers and they're not illegal uh aliens. They have there are people with temporary protected statuses uh DACA recipients, pending asylum applications in including those people who have are legitimately working.
▶ 2:24:13Um, can you uh share with us just briefly because I don't want you to consume all my time why you are you are trying to promulgate these rules.
▶ 2:24:26I'm not involved in that at all ma'am. I
▶ 2:24:28you're you're the CEO and and
▶ 2:24:31I implement the law as written. I don't
▶ 2:24:34Okay. So there is no law it says. So So you, so is it, so is it's not true then that Treasury plans to issue regulations to limit who qualifies for the refundable portions of certain tax
▶ 2:24:49I don't have one item in my office telling me of that.
▶ 2:24:52Okay. Well, that's good to hear that you're not going to do it.
▶ 2:24:57I say I I I just want to be very clear. I do not write law. I implement law and uphold law and ensure law is obliged by.
▶ 2:25:07Well, that's very that's very good to hear. I'm going to yield back my time and I just want the committee um the record to reflect that the CEO has said he has no intention of writing tax law and he has no intention of asking us to write law that would limit uh tax credits to eligible uh non-citizens. Thank you madam chair and I yield back.
▶ 2:25:37Gentlewoman has yielded. Pursuant to committee practice, we will now proceed with two to one questioning. I recognize the gentleman from North Carolina, Dr. Murphy.
▶ 2:25:47Thank you, Madam Chairman, and uh thank you for coming and talking with us today, and thank you for helping clarify that we write the law and you enforce the law. That's just what agencies are supposed to do.
▶ 2:25:58Thankfully, we have an administration that does that.
▶ 2:26:00Um I I want to turn back a little bit just to artificial intelligence. I'm a physician surgeon by trade and the world of artificial intelligence is exploding in the field of medicine and it will explode in every every other field. Uh I I wondered if you could talk a little bit about how the agency is dealing with this. You know there's a there's a great crack on the IRS and quote people quote pay their fair share and all this uh all this stuff.
▶ 2:26:26I I want you to if you can talk about AI, how AI is helping go after people who are cheating as this that's a I think a 100% bipartisan thing should be anyway. Um and not be able to affect average Americans. How we're able to use data correctly, not let it misguide things as far as policy and interventions within the IRS, but how you're able to craft this new technology uh to root out fraud and all the other things that the American people want.
▶ 2:26:54I'm uh I'm delighted to hear the question. Um and thank you. And I'm also delighted to hear you call it new technology because I like to remind everybody all the time, you know, uh AI is technology, right? It's not some foreign object.
▶ 2:27:12uh and of course all technologies uh that are going to get the desired outcomes also have humans ultimately responding to it. Uh and you know uh I've I've been heard publicly saying and before I was in uh the the government I was I was uh using AI before it was called AI.
▶ 2:27:42uh you know and and I think I think you know right now we are heads down on implementing things that make it easier for our workforce to get to the answers. Uh I believe AI will be part of increasing the compliance rate 100%. I believe AI will be part of speeding up everything we're doing. The stuff I talked about taking 16 weeks to uh less than one week on amended returns is AI.
▶ 2:28:11But AI has technology around it also and it has people around it. Uh so I have high expectations. I don't uh see a world where an cannot use enough AI and be in and be responsible with AI and responsible has to be that we have overseers of it. We have governance model for it and we also have people that are actually reacting to it.
▶ 2:28:40It will change the way our workforce works in a better way. In a better way.
▶ 2:28:46All right. Well, well, thank you. I I appreciate that because I I was over at HHS yesterday and uh speaking with the secretary. It it was mind-boggling how uh the systems that they have in place there are literally 1970s technology. And nobody has hereto for addressed any of these things. And so I I'm thankful that the administration, very businessmind, very efficiency oriented, is going after the processes that have made government so inefficient in the past.
▶ 2:29:13We want this to be a program that works for taxpayers and for the people who are not abiding by the law be able to u go after them. So I appreciate the uh the the effort being put in by the uh but the by the IRS. Uh I will just say real quickly uh one new implementation I I have a bill passed into law disaster related extension of deadlines act. I live in eastern North Carolina. We get a lot of hurricanes. We have a lot of these issues.
▶ 2:29:39Um and sadly enough people have uh you know have a lot of difficulties coming out of these periods. I just wondered with new implementation of laws how you're able to quickly if I can get a quick answer uh assimilate that into the tax code to make it something that is applicable. you know, we've already we've already responded to that. Uh and you know, it's enacted and uh we actually have cases that we've responded to already, sir.
▶ 2:30:03Great. Well, thank you for being so nimble and making sure that's uh that's good for for my constituents. So, uh thank you, Madam Chairman. I'll yield
▶ 2:30:11Gentleman yields back. I recognize the gentleman from Tennessee, Mr. Kaf.
▶ 2:30:18Thank you, Madam Chair. Thank you, sir, for appearing today. If I could, going back to the one big beautiful bill, one thing that that we worked hard on was restoring the R&D tax credit. I've been hearing from manufacturers back in my district that it's not working the way we intended it to to work.
▶ 2:30:38uh when they do research on the fl factory floor, whether that's improving products or refining processes that the IR what I'm hearing is that the IRS is increasingly treating that work as just manufacturing and that they are disallowing the related cost. and they tell me that that posture is being driven largely by case law rather than anything that we wrote into the statute.
▶ 2:31:09So, we want American manufacturers to be competitive and stay uh top competitive. We want them to integrate new technologies. Uh Dr. Murphy was just asking you about AI and we want them to incorporate that into production. Is that something that you and the IRS can take a look at to uh applying that uh uh so that it's not being pushed out of the R&D credit?
▶ 2:31:33Yeah, first time hearing of it uh sir and uh we will we will talk to your office and we will we will have a rapid response to what may be a misunderstanding or why things are happening the way they are.
▶ 2:31:47Thank you very much. I appreciate you getting back to me on that. If I can also from accountants back in my district in West Tennessee and small businesses, I'd like to ask you about because I think I I hear and I know and I think we all know that sometimes these audits can drag on even when the taxpayer or the small business is cooperating and and sometimes they feel like the goalpost get moved
▶ 2:32:17uh by the by the IRS And I think we know the the approach of the of the prior We know that President Trump has adopted a taxpayer first vision, which which I appreciate. I think we all appreciate.
▶ 2:32:33Can you address what the IRS is doing or can do to make these audits more focused, maybe more timely, maybe more predictable for families and for small Well, you know, uh, in a spirit of productivity, efficiency, and quality, uh, we are measuring everything. And that means how long things take. It's not just how many you have, but how long they took and why they took.
▶ 2:33:03You know, we talk a bunch about AI, but process engineering matters a lot, and it matters in audits. And so you should expect uh closure over the next year to be at greater rates than we've ever seen before because of uh the president's attitude of taxpayer verse of delivering customer service and even in audit there's a customer and and we gota
▶ 2:33:33we need to treat it with the highest dignity and treat our t all taxpayers fairly across the You have a commitment on that, sir.
▶ 2:33:41Thank you. So, you can see those audits being more streamlined, if you will.
▶ 2:33:46Yeah, I think I think we could just see them closing out faster, right? I can't force a taxpayer to do something, but I can ensure we're managing to a set of standards to close items out in a period of time and understanding the outliers and then we'll build process for the
▶ 2:34:04Thank you.
▶ 2:34:05As opposed to think of it as just one big pile. We got to have standards of operating on time.
▶ 2:34:13We do hear from I think we all hear it from our constituents about when they reach out to the IRS that it's difficult to talk to somebody that they get passed from uh representative to representative. Can you talk about uh your vision and and how maybe we can work on addressing and and correcting those deficiencies?
▶ 2:34:34Yeah. Um, I like I like it. Uh, you know, April 15th, uh, will be a declaration of the closing of tax season. Uh, obviously that goes on a lot longer. There's probably 20 plus million returns that come in after that. Um, and I'd like to take a status check with you on what people are saying then.
▶ 2:34:56uh you know there's a you know I I know I keep pontificating at some level 43% more online inquiries 40 million more online more online users than ever uh and then you know the fact that we're answering the phone in in a single in a single digit which is uh equal to equal to commercial business so I think we're in the transformation process uh where there's no vic victory laps
▶ 2:35:26going on here. We'll have a whole another year of of doing better and improving, but uh you know, I be I'll be happy to come back and have my staff and your staff spend time on a recap at the end of the
▶ 2:35:39Thank you. I yield back.
▶ 2:35:41Gentleman yields. I recognize the gentleman from Virginia, Mr. Byer.
▶ 2:35:47Madam Chairman, thank you very much. And Mr. Vinya, CEO, thank you for being with us. Uh, Congresswoman Chu, uh, was trying to get a yes or no question out of you on direct file, and I like to go a little deeper. Um, just because it was overwhelmingly popular. In fact, 94% of users described their experience as excellent or above average. More than 70% said they'd use Direct File if it were eligible.
▶ 2:36:11If the program were fully implemented, was projected to save families up to $23 billion every year in fees, time, and tax credits. And there were recommendations to both the independent government, the GAO and the treasur's inspector general uh that the despite those recommendations that administration chose to end direct file and basically as Miss Chu pointed directly directly into the arms of the forprofit tax preparers. So Mr. Vinana, other than making life more difficult, what did that accomplish?
▶ 2:36:42And if your goal is to provide world-class service to the American people when they file their taxes, why not support a program that was free, overwhelmingly popular, and easy to use? So, why the opposition? And why end it? Well, as I was trying to say before, uh, I've read this report inside and out that was handed to Congress before I was in the job, and I think the most stark important details can be easily summarized,
▶ 2:37:12right? Less than half of 1% of the filers used it. Uh its cost was far above anything we see anywhere else. And there was 41 million extended to this without all the overhead that went around the organization itself.
▶ 2:37:41Um so that's why the Treasury Department suspended it. Um, and I've heard more than once about the overwhelming percentage of successful filers or What we haven't actually articulated is how small that absolute number actually is. Sir,
▶ 2:38:07so let's u you're a businessman. I am too. And one of the things we know is when a program just begins, you get relatively small thing. For example, in Virginia, our governor would not let us use it. There would have been many people in Virginia would have picked it up if that 1 half% would have certainly grown to 2% to 10% to 20% if we're allowed to go. And by the way, the cost per per person would have fallen dramatically as it expanded.
▶ 2:38:32Let me move on though because the tax cut there's a group of us Democrats and Republicans who are very worried about the budget gap. We're what 101% right now, two trillion more this year spending to grow to three trillion per year. by 2036, the long-term risk to the stability of this nation. And we have a massive tax gap um 650 billion, 750, 500 depending on who you listen to. And we know that almost all that is from wealthy taxpayers under reporting.
▶ 2:39:00If you get a n 1099 or W2, 99% of the people were paying their appropriate taxes. But what's greatly concerning to me is how much we are dialing back on that. You know, we just had the 11 billion tax cut or 11 billion cut to the IRS and the CBO estimate that's going to cost $40 billion in government revenue. The IRS's own tax data shows that investigations into abuse of tax schemes dropped by a staggering 63% in the last year.
▶ 2:39:27So, how can we justify constant cuts to the AY's own budget when we know that cutting the IRS will cost three times that in lost And I know you want to use AI to do that. We're very much supportive of that. But um AI alone without the resources, without the sophisticated auditors, without the attention to that huge tax gap.
▶ 2:39:50Yeah. I think um first of all, you know, there was u fundamentally a 100,000 people in IRS. Uh and I've yet to find one piece of paper that explained why that was the right number. So, I understand that we have less people.
▶ 2:40:13Um, but I'm not sure that there's anything that ever said what the right staffing level was ever. The fact of the matter is we are measuring more than we ever had. We're delivering more than we ever had. And in fact, we have a talented workforce that's highly motivated. Right. the tax gap.
▶ 2:40:35Uh the last document produced was on 22 and it t 2022 and uh it talks about um 650 billion dollars. uh I am deep with the team in research of understanding every element of that right uh and in fact I'm not sure we're ever going to find out that more research is going to go on and I'm happy to come in front of you when I'm done with that or come visit
▶ 2:41:05you and talk to you about it I want to understand what the direct access address addressable market is how much of that is actually and how much of that is in our non-compliance and straight the
▶ 2:41:19And part of streamlining the organization is having a better way for simplicity and higher compliance. And I'm happy to come see you, sir.
▶ 2:41:28thank you very much.
▶ 2:41:31Gentleman yields back.
▶ 2:41:32Yes, I yield back.
▶ 2:41:35I recognize the gentleman from Pennsylvania, Mr. Fitzpatrick.
▶ 2:41:40Thank you, Madam Chair. Uh Mr. Bisuno, thank you for joining us today. Uh it goes without saying that for too long um outdated technology at the IRS has created delays and frustration for so many American taxpayers. Our offices across America uh are oftentimes a go-between between those very frustrated taxpayers um and the agency. Uh paper returns can sit for weeks without being processed.
▶ 2:42:05Uh which slow refunds, uh create errors that oftentimes require very time consuming corrections that um many of our um constituent service staff have to help our constituents navigate. With paper filings um you know also being indispensable for many Americans. Uh ensuring technology is up to date to reduce those inefficiencies obviously is very very critical.
▶ 2:42:28um upgrading uh systems to securely and accurately handle filings uh will reduce errors, accelerate refunds, and deliver uh the high quality service that our taxpayers and our constituents deserve. Um sir, uh the IRS in the past has relied heavily on uh what most would agree are outdated processing systems.
▶ 2:42:49uh scanning only small fraction of paper returns and requiring employees to manually key uh key in millions of pieces of information uh even as backlogs and errors risks u mounted. Uh the taxpayer advocate service has described how the IRS uh only recently began scaling up uh scanning technology.
▶ 2:43:11Uh your modernization agenda at the IRS is aimed at streamlining paper processing uh with a plan to cut paper handling costs from roughly 450 million in 2024 to about 20 million in 2029, freeing up hundreds of millions of dollars to improve service and reduce waste. U so if you could uh just take a minute, sir, to um number one, how many paper returns does the IRS estimate uh it will receive this filing season? And if you do have that
▶ 2:43:40uh, you know, it'll be it'll be less than 2%. And if you think about60 million, so uh, you're you're going to get, you know, call it 8 million. Um, you know, uh, I think I think the way we, you know, we have the zero paper initiative and, uh, I know there's a lot of a lot of concerns about that because that includes checks and that includes a whole but by the way, if you think about it, it's on the small tail of
▶ 2:44:10what's being done and why the cost is so absorbent is because, you know, we had housed infrastructure to handle all of this. what you're seeing going on right now. I think uh I I'm my anticipation is uh those numbers are uh completely accurate, but maybe their time frame could be quicker. Um and I think it's better for the American public.
▶ 2:44:33Um I think I think the issue of a lumbering is really about not only technology, it's about process engineering. If you think about the zero paper initiative, it is scanning technology, but it's also process engineering. And when you have a 75,000 person organization, processing engineering everything to get better outcomes, maybe as big a payback as anything.
▶ 2:45:00And when you add technology on top of it, you get you get hyper good outcomes. Uh so we're maniacally focused on it. Uh it is it is in our mainstream set of objectives. You hear us talk about it every week in the Zap meeting and you should expect those outcomes from the American public.
▶ 2:45:19And what are the specific investments in scanning technology and automation that are being implemented that uh hopefully will drive down paper costs, also deliver faster refunds and improve accuracy for the uh taxpayers um who do rely on paper filings?
▶ 2:45:33Well, I I think you go across the board. You know, it's it's the back end is the scanning part, right? uh our ability to help uh that small percentage that is not electronically flying uh filing now is part of really what is our taxpayer experience group that are focused on changing their ability to interact with us.
▶ 2:46:01I also believe that all we've built to give people tools to go online and a large amount of Americans access their data online and would prefer uh to do that. Uh we've invested a lot. We're seeing the returns this year. I think we'll see much better returns in 27. Uh that means in experience.
▶ 2:46:24Uh, I look forward to uh the time when you and I are talking about uh maybe the way one of the other the other congressional leaders said, you know, they're not getting the phone calls anymore because we're getting the job done. Happy to come to your office and talked about any of it.
▶ 2:46:40Thank you, sir. Madam Chair, I yield
▶ 2:46:42Gentleman yields. I recognize the gentleman from Florida, Mr. Stwie.
▶ 2:46:47Thanks, Madam Chair. Uh on December 12th, 2024, my federal disaster t tax relief act of 2023 became law. Uh my bu bill delivered long overdue tax relief to victims of federally declared disasters, especially to flidians who were impacted by the destructive of hurricanes Ian, Debbie, Helen, and Milton. Casualty loss and disaster relief have traditionally been retroactive subsets of our tax code.
▶ 2:47:12Likewise, hurricane victims must file amended returns to reflect a casualty loss the year of the disaster to claim relief. Some taxpayers have faced administrative challenges in claiming this relief. Some upon filing the amended return, the IRS indicated that the adjustment didn't change their taxes or their credits and that no further action was required. Um, other examples of calls that we've gotten to my office from people all over the country, not just my district, was that the claims were being flagged as fraudulent by the IRS.
▶ 2:47:40Survivors are being told their physical addresses were not in designated zones. Claims are being incorrectly routed to the international department. Tax filings are being labeled as frivolous. Receiving letters that it's been paid when it's not been paid. Being told that there are errors, but not giving specifics on what those errors are. Extremely long all day hold times on the phone. Some victims are still waiting for all of those three years, 2021, 2022, and 2023.
▶ 2:48:07Our office has received a number a number of complaints about IRS's inability to adjust its procedures to reflect this newly designated law uh for qualified disasters in taxexempt wildfire settlements. How is your office committed to working with Congress to ensure that amended filers receive their legally entitled relief?
▶ 2:48:26Uh, this matters a boatload to us and getting it right is of the utmost importance and I would love for us to come down and sit down with your staff and seeing where our failures are and fixing it immediately.
▶ 2:48:40So, have you been made aware of any of these failures?
▶ 2:48:43Not at the level you're talking about at all, sir.
▶ 2:48:46Well, I I've seen it personally. So,
▶ 2:48:48I'm I'm not disputing it. I'm prepared to go work on it.
▶ 2:48:52Okay. So, do you haven't the the IRS, as you're aware, hasn't made any changes to ensure that filers that have been affected by disasters are insured that they can get
▶ 2:49:02completely committed to to the disaster relief act. And you know, I don't I'm I'm don't have the information you're giving me is honestly the first time I'm hearing it, sir.
▶ 2:49:13Okay. Well,
▶ 2:49:14the only thing I could actually do is say I'm happy to come and go work on it.
▶ 2:49:18Okay. and do a deep dive analysis so we understand it doesn't happen to anybody
▶ 2:49:22So you're not aware of anything internally that's changed to to to ensure that these people that have been affected by disasters aren't getting these type of responses for the IRS?
▶ 2:49:32Well, what I'm aware of is that we implement the change to execute it, but it's obviously not working right as I'm hearing firsthand from you and my only desire is to go fix it.
▶ 2:49:42Okay. Uh, how does your office plan to work with prepare services and accountants to provide them with the necessary information that would minimize the need for taxpayer advocate
▶ 2:49:52I mean, uh, as I said earlier, uh, I talked to four largest preparers and it's the first time I've ever heard of someone from, uh, the IRS at the senior level calling them and we committed to help them do their job better, to help us do our job better for the American What is the IRS's current estimate of the scale of the problem of ghost preparation, a practice where paid tax preparers do not sign returns or otherwise follow the rules for preparing returns?
▶ 2:50:21And what data gaps could be filled to support a more accurate
▶ 2:50:24Yeah, I mean, there's a uh there's a fair amount of work going on to eliminate and actually, you know, appropriately deal with when that ghost repair occurs. I mean, it is a real issue and it needs to get stopped out.
▶ 2:50:41Okay, I only have a little bit of time left. I would just I I would um
▶ 2:50:46I would encourage whoever in the back bench or whoever needs to contact us to provide you that information that my office has received and um I would highly encourage the IRS to ensure that these people that have been affected by these disasters over these period of years, uh I can speak to Florida. We've we've had six hurricanes in two years in my district. Uh all of the major hurricanes. We passed this bill because it was important not just to my district, but to California and the wildfires and work bipartisan to get this done.
▶ 2:51:16And so when you're hearing from filers, they're being told that this this isn't legitimate and their their claims are being rejected when they file the amended returns is obviously a significant problem. So whatever I can do to assist you guys to ensure that that's not a problem, I would love to work with that. Um because this is a huge issue to districts like mine that have been annihilated by hurricanes and it's the least that we can do as the American people to ensure that the people that have been affected by this have the ability to at least deduct their expenses from their taxes. I yield back.
▶ 2:51:45Gentleman yields. I recognize the gentleman from Pennsylvania, Mr. Evans.
▶ 2:51:51Thank you, Mr. chairman for calling this hearing to highlight the president's failure to to protect the American taxpayer. The president and his billion dollar have continued to make it harder for working families to get tax to get tax credits and refunds.
▶ 2:52:21Instead, the president has been making it easier for to cheat our tax code and make themselves richer. This administration is for the rich and against American workers and families.
▶ 2:52:43in in in my city of Philadelphia, we have an RS center that does great work to assist American workers and it's important that they continue to have that ability. Unfortunately, the has been making it harder for RS employees to do their job.
▶ 2:53:10Just last week, he terminated the union contract for our s employees for no reason. The president is continue to make it harder for the federal government to serve the average American. Democrats will continue to fight against these attacks.
▶ 2:53:35taxpayers depend on efficiency and well-managed government and does not that does not serve the rich. So it is important that we have this opportunity and we make it clear and the reason I don't specifically point to you because I understand you're not really in charge.
▶ 2:53:59the president is in charge and the fact of the matter is you work for him and it's very clear to me that you obviously are not doing what is necessary in the in the benefit for the American public and I say this these comments today to express to you that at least this representative this congressman from the city of Philadelphia where it all started is not satisfied
▶ 2:54:29with what is happening. So I share with you sir that is clear to me that you're not protecting the American taxpayers. We work for the American taxpayers. It is important that we be very guarded about the American taxpayers and their dollars in this very difficult time. So we don't want to take that lightly.
▶ 2:54:59So I only have the opportunity to voice my opinion to you since the president is not sitting in front of me. And I want to express to and hoping that you hear what I say and you will say to the president that you need to do a better job for the benefit of the workers and the people of the state. So, as a result, Madame Chairman, I'd like to yield back my time. Thank you very much.
▶ 2:55:30Gentleman yields. Uh, I recognize the gentleman from Ohio, Mr. Kerry.
▶ 2:55:36Thank you, Madam Chair, and thank you, uh, Misso, uh, for being here this morning. And I want to thank obviously, uh, your staff for preparation for this hearing. First off, I'm going to have a couple questions. I'm going to lay them out so you can have the mindset. First, I'm going to talk a little bit about crypto as it relates to the uh uh staking rewards. Secondly, if we have some time, um I'd like to talk a little bit about some of the AI tools, kind of build upon what some of the other what the other members have talked about.
▶ 2:56:07Um, as you know, uh, when the taxpayer uh, stakes their crypto, the taxpayer produces new tokens through their own computation activity of validating the network's transactions, similar to a farmer who is harvesting crops or a minor who's who's actually extracting some type of mineral or manufacturer producing products.
▶ 2:56:30Now, in 2023, the Biden IRS issued guidance treating newly created tokens as actual income taxed at the time of creation, unlike any other newly created property.
▶ 2:56:47Um, I think you and I have talked about this before, but the White House working group of 2025 digital assets report explicitly recommended to the Treasury and the IRS to review previously issued guidance on the timing of the income from staking and mining and consider whether clarify or whether to modernize or to reverse it.
▶ 2:57:09So a few months ago along me along with several of my colleagues I think 18 in total including five of us that actually sit on this committee inquired about this this this guidance. Uh what is the IRS current timeline for completing that review and is the agency prepared to reverse the previous administration's era guidance if it is found to be inconsistent with how other self-created property is
▶ 2:57:38Yeah. Uh, thank you very much and uh it's a a timely question. Uh, we're in deep review on it. I'm happy to come uh have my staff come and brief your staff
▶ 2:57:49on on our progress and talk about next steps forward if that works for you,
▶ 2:57:54That that works it works great. And and let me just one other thing is and if we're going to get our going to get the the teams together here, one other thing is many of the digital asset foundations that steward blockchain protocols are
▶ 2:58:09outside of the United States and be due to the regulatory uncertainty. I I firmly believe uh that the tax policy should I mean I think we all we all want to you know make sure that we continue to grow um but this tax pay this tax policy should you know we should encourage the onshoring of these digital assets. So it's something that I'd like to uh work with your team on as we get together. We'd like to do that.
▶ 2:58:37Uh the next topic I'll quickly discuss is the IRS implementation of certain AI tools. I know that uh you talked a little bit about that. There was a lot of back and forth. I just want to ask you the question. I'll let you expound upon it in the minute and 40ome seconds. How are the AIdriven tools currently helping taxpayers during the 2026 filing season? For example, by answering those routine questions, guiding people through common issues or easing pressure on call centers. And with that, floor is
▶ 2:59:06Thank you. Um I think first of all uh the natural place I started with AI probably over 10 years ago was in call
▶ 2:59:15and we weren't calling it AI then but it was really how not only to assist the caller but to assist the operator. So our ability now to put the information in front of our service representatives so they can get to it faster where they used to have to traverse multiple systems or try to to go figure out the answer. We're prompting that in a manner.
▶ 2:59:42So that's uh taking both uh calleds out of the queue and also allowing our representatives to answer more calls in a day with more timely information. That would be a very simple application.
▶ 2:59:57The second g set of applications you hear us talking about, you know, is an example of taking everything it took in 16 weeks to get an amended return uh back to uh to the taxpayer and taking it down to single-digit days because it's one of the great tools that we have here throughout the whole process. And you know it will affect the compliance positively over time.
▶ 3:00:26Here also is the ability to gather information, bring it together, give answers that need to be reviewed by a human, give them categorical opportunities or tell them where to search for more. So I'm excited for it.
▶ 3:00:42Thank you for that. With that, Madam Chair, I yield back.
▶ 3:00:45Gentleman yields. I recognize the gentleman from Iowa, Mr. Finster. Uh thank you uh Chairman Fishbach and Ranking Member Neil. I I just want to thank uh Mr. Biziano for all that you've do and how you've really transformed the IRS in less than six to eight months. I mean it's just truly truly incredible. I I think of Ians and Americans, farmers, families, seniors that are filing. I mean you made the process easier. You modernized it and it's more responsive.
▶ 3:01:15I mean this is what customer service is all about. this is what government should stand for. So, I truly applaud you for this. Um, we continue to work with President Trump. I think of the the the Working Family Tax Cut Act, uh, that that, you know, was passed and all the dollars that you noted that are coming back in refunds. Um, you noted that this is the largest tax refund year that we've ever had in US history. That's incredible.
▶ 3:01:43You noted that you modernized the IRS system for 43% increase in those using online services. You've taken it down from 16 weeks to 9 days for returns. All right, that's well done. So, I want to just talk a little bit about I've got a a bill that was introduced.
▶ 3:02:02is called the IRS math act which requires the RA to provide clear itemized explanations because over the last decades math errors were never you know obviously we're human people make errors and and the IRS never really told people you know hey how the error was done or whatever. Can you address how are you working with the taxpayer when they make an error?
▶ 3:02:29uh how do you identify it and and what do you do to give notice to them that says hey heads up we got a concern here
▶ 3:02:36sometimes it happens right in the online submission that we're advising you know we can see something fundamentally wrong in the math and I would say that happens you know uh on on the simple stuff all the time a technical skills capability gives them a prompt or gives a preparer a prompt that says we see a error.
▶ 3:03:00Right. Um, oddly enough, not 100% of the time do they correct it.
▶ 3:03:06Um, but we'll work on that.
▶ 3:03:08But I think and we're building deeper tools. It gets back to why uh I like the idea of thinking about the extension from the taxpayer to the tax preparer or to directly to us as turning into what I would call straight through processing and a seamlessness. We are in business to help the taxpayer.
▶ 3:03:33I know if you stood here and listened, you might not believe that, but that is our job to help them. And you know, everything we're doing is trying to get it right for them so they could they could get on with their life, get their refunds as we've sent out, you know, you heard over 130 billion already and uh prepare for next year.
▶ 3:03:54Yep. Well, I applaud that and and I I thank you for what you're doing and I know a system, a computer system that's, you know, updated and stuff like that can do a lot of these things. Again, more customer service. I got one more thing. you know, the American workers, uh, we want to protect them and government. I'm worried about foreign governments and illegal immigrants siphoning off US tax benefits.
▶ 3:04:17The working families tax cut stopped foreign governments from grabbing US tax revenues and closed the loopholes that allowed taxpayer funded benefits to flow to not flow to illegal immigrants, including social security number protections. Can you just address this a little bit? to me, you know, I think we're always concerned about I've got this big refund coming. I don't want it stolen. I don't want it taken. I don't want foreign adversaries uh, you know, coming after me and things like that. Can you address that just a little bit?
▶ 3:04:44I think I think uh, you know, what we built in where is my refund is actually a defense mechanism and an offense mechanism. You know, uh, it wouldn't be uncommon. We see it. People get up every day and check that and then they know if their direct deposit's going to be there. It's why direct deposit is so powerful. Yes, I understand. I believe there will always be people who need a check.
▶ 3:05:13But that is a larger form of fraud occurring. Yep. Right. We've done a great job across this government with the president's leadership and everybody else's leadership to be able to reduce fraud. And I think one of the most important things we have to do is protect the refunds and make sure they get to their destination. We're putting tools in the taxpayers's hands to know it and they have the tool in seeing it in their account.
▶ 3:05:43And that's the best defense is a good offense.
▶ 3:05:45Absolutely. Thank you. Thanks for all you do. I greatly appreciate all your work and I yield back.
▶ 3:05:50Mr. Petta,
▶ 3:05:51thank you, Mr. Chairman. Thank you, Mr. Biziano, for being here today. Second time you're in front of this committee. Appreciate your time. Appreciate the information that you have to offer and giving us an update on the operations, especially being in the middle of tax season. So, thank you. Um I think as you heard here and there uh if you see through some of the some of the words and emotions um we do share the same goal of ensuring uh that the IRS fulfills its mandate to provide top quality service to our taxpayers to our constituents to all of us.
▶ 3:06:21Obviously, that requires an agency that acts, as I think you'll admit, nonpartisanly, efficiently, and is accessible when our constituents need the help that they deserve, especially when it comes to their taxes. However, it seems that many of the steps that this administration has taken can undermine some of those shared goals.
▶ 3:06:46The very structure of your role, for instance, requires you to oversee the operations of both the IRS and Social Security, with all due respect, uh, of your background. That divides your attention, and I think it could lead to short changing these two very, very important agencies.
▶ 3:07:06Meanwhile, you got the IRS staffing that's been reduced to roughly by by roughly 20% with some of the deepest cuts, hitting frontline roles in accounts management and field assistance. And those are the important positions responsible for processing returns, resolving errors, and assisting taxpayers.
▶ 3:07:24And it seems that that's a recipe for pretty overworked staff, including yourself, uh, based on your roles, but also what I'm seeing and hearing from my constituents, a lot of long lines for assistance, rushed, and some very slow work. And I think you'll agree that the American public, our constituents deserve much better.
▶ 3:07:47Now, we've already seen some results since this administration took over in my district, the 19th congressional district on the central coast of California. Um, it's seen a 45% increase in IRS related casework. Um, none of the tax policy and and the surge has been driven by a lot of refund delays, unfortunately, missing returns, and the inability of constituents to reach an IRS representative. Now, look, don't get me wrong.
▶ 3:08:16Um, that is our job to make bureaucracies work. I always tell my constituents that it's kind of one of the three main things we do besides legislation and federal funding for the district is case work, especially when it comes to the IRS. And let me tell you, my constituents um don't have good things to say about the IRS because a lot of the delays they're dealing with, unfortunately. And so it is nice.
▶ 3:08:40I admit that and I'm sure my colleagues will say say the same thing that we can come in and you have been responses responsive to us and I appreciate that and that we've been actually able to get people the refunds that they've deserved and been waiting on. And so I do appreciate that that you've been able to do that. But it shouldn't take us to call you and to get that stuff going. I think you would agree to that. Um, but don't get me wrong, we will happy to do that and we'll continue to do that when necessary.
▶ 3:09:11Now, I think you'll agree we need a fun fully functional supported IRS to serve the taxpayers and collect revenue that funds government operations and implements the laws that Congress pass. Now, I'm going to go on to one bill that I got I want to talk to you about, and I think we might have talked with your staff about this as well. Look, many taxpayers um turn to paid preparers to help file for the tax season, but I wanted to raise the issue of error rates among paid preparers.
▶ 3:09:41The GAO recently found that paid preparers have an error rate as high as 60% and in some cases performing worse than taxpayers filing on their own. Under current law, the IRS can cannot revoke preparer tax identification number PINS, as you're aware of, even when the preparer has shown clear incompetence or misconduct. Now, I have the bipartisan taxpayer protection and preparer proficiency act with Representative Stewie across the way.
▶ 3:10:12uh that would address the problem by allowing you allowing IRS to revoke the pins of preparers that engage in misconduct or fail to meet pretty straightforward professional standards. My question is to you in the last 30 seconds. Do you think you should be able um that you should be able to obtain a pin and continue preparing returns despite repeated errors that cost taxpayers money? One, and two, will you commit to working with me and Mr.
▶ 3:10:40Stewie on tax on the taxpayer protection and preparer proficiency act. One of the most difficult names to say fast and give IRS the ability to revoke P10 from preparers who harm taxpayers and undermine the tax
▶ 3:10:55Thank you. I'm going to leave it at that. I yield back.
▶ 3:10:59I I would like to have us come visit your open items and work on them jointly. And I know you said it shouldn't come to that, but we use that as a form of root cause analysis. There are no oneoffs and so it'll be usually helpful if we could come do that with
▶ 3:11:16Absolutely. I'd love for that and love to connect with you uh subsequent to this hearing. Thank you again for being here. Thank you, Mr. Chairman. I yield back. Miss Takis,
▶ 3:11:25thank you very much. Good to be here with you again. And I want to first thank you for coming to visit my district. We visited the social security office on Staten Island. Um, and you know, first of all, I commend you in the time that you've been there. The way that we've seen weight times at our call centers uh drop, they were nearly cut in half. Um, disability claims backlog has declined by more than 25%. Americans now have 24/7 online access to social security. You've done such a good job that the president gave you a second role.
▶ 3:11:55And now you're doing the same things at the IRS. We're seeing call time uh go down. call centers uh are better staffed. You've had I think 2,200 more employees now work in the call centers and given that customer service that is so needed. Uh and of course improving the IT so people can do a lot of this stuff online. Uh all fantastic things and I appreciate your efforts. Um I would love to talk to you today about some of the provisions in the working families tax cut package that we passed.
▶ 3:12:25Um obviously uh the big news is that the returns tax returns are higher this year about 10.2% increase over last year. Uh can you can you specifically talk about what is attributing to that? What specific provisions are most Americans taking advantage of? Personally to me obviously the state and local tax deduction was huge for my high taxed New Yorkers.
▶ 3:12:47Um, and this we'll talk about social security as well shortly, but I just want to get your sense on where you think uh the benefits are most being
▶ 3:12:56Well, you know, uh I like saying we're 40% through tax season, so that's a uh that's a fair amount and we kind of got a good trajectory. That means 55 million Americans have filed their returns. 24 million Americans, 43% have had a schedule 1A. And schedule 1A is where the provisions are. No tax on tip, no tax on overtime, no tax on car loan interest, and a new deduction as you well know better than anybody.
▶ 3:13:27Uh for seniors, uh we also have uh the Trump accounts 4547 and we have three million dependents who are enrolled in that already. I think it's important when you take a look at this and we sat yesterday with the research analytics group who produces all the all the data that gets consumed by the public.
▶ 3:13:48Um that if you looked at the refunds for schedule 1A as of now uh they have a $775 increase. And so the logical question is I thought you guys thought it was going to be $1,000. The curve shows that it's grown to 775 and will continue getting to $1,000. And remember that's on right now 23 million uh tax returns.
▶ 3:14:19Uh so that's a a big benefit. We see the largest percentage benefit the largest percentage benefit in the uh 100k and under category. And we see the largest dollar benefit and I know you're gonna like this answer to the seniors
▶ 3:14:39on that on that point
▶ 3:14:40and and that was their hard work their hard work earned money. Um so I think it's I think it's reforming uh as many of our calculations have laid out. I think the American public also if they have a um direct deposit are getting it in an average of nine days from filing.
▶ 3:15:02Fantastic. Well, first of all, let me say again, thank you for your work to make things more efficient. Uh we have in the past had serious concerns about bureaucratic errors, uh poor inter agency communication, uh delays in refunds, as well as stolen checks, which my colleague had brought up. And I see that this administration is really paying attention to those issues and trying to uh correct them so we don't have some of those those issues that we had in years past.
▶ 3:15:28Um with that said, I do want to point out again that the salt relief for my constituents uh increased to $40,000, which is significant. Sadly, my mayor now is talking about increasing property taxes even more, which is, you know, unfortunate. We're giving tax relief on the federal level. they're looking to take it with the other hand away from uh my constituents and um but that will benefit 98% of my um households in my district.
▶ 3:15:54The other big provision which I was proud to author that was included in the working families tax cut package was for senior citizens. 88% of seniors across America, 51 million seniors across America will benefit. Uh and the deduction is large enough where they're basically getting whatever they paid in social security taxes refunded to them, right? if they are income 75,000 uh for individuals or 150,000 for a married couple.
▶ 3:16:20Yeah. And I think a couple things you know you you brought up salt which is out till 2030. We also have permanency that occurred right domestic R&D uh expensing for capital investments uh pass through uh double standard um double death tax exemption child tax credit expanded and permanent
▶ 3:16:51opportunity zones. And I bring that up because we're seeing the benefit in people with faster payments and bigger checks, but we're also seeing the double benefit going forward of lower deductions and it's going to affect American families.
▶ 3:17:08Thank you for your work and thank you to make sure that they get it timely and that their checks aren't being stolen in the mail. We appreciate your efforts.
▶ 3:17:14Thank you,
▶ 3:17:15Mr. Yakam.
▶ 3:17:16Thank you, Mr. Chairman, for holding this important hearing and thank you to Mr. Biznaniano for being here today. It's certainly no secret that Democrats American Rescue Plan was an absolute and total disaster. Uh it certainly supercharged President Biden's generational inflation that saw prices go up by more than 20% by the time he left office. It forced the Fed to dramatically hike interest rates, which led to record lows in home affordability and car affordability.
▶ 3:17:43And it was certainly prone to waste, fraud, and abuse that was so typical during the Biden administration. We were reminded of this in a report from the Treasury Inspector General for Tax Administration or TIGA. In December of 2024, weeks before the Trump administration took office, the Biden IRS pushed out American Rescue Plan stimulus checks to 1.2 million people who had over 3 years to claim those checks, but hadn't yet done so.
▶ 3:18:12Then IRS Commissioner Danny Warfl said the IRS had looked through the internal data and quote, "We realized that 1 million taxpayers overlooked claiming this complex credit when they were actually eligible." So they decided to just pay them out automatically. These payments, quote, are an example of our commitment to go the extra miles for taxpayer. Warfl added, "One problem. A quarter of those people who were paid were actually not eligible.
▶ 3:18:43million went to non-resident aliens. $17 million went to people who had already received a check. The Biden administration and the IRS went the extra mile in the wrong direction. All told, 301,000 improper payments totaling nearly 450 million taxpayer dollars were given to people who weren't eligible and the IRS has only been able to recover 29,000 of them. Mr.
▶ 3:19:11Bizaniano, can you please provide an update as to how the IRS plans to recover this money, particularly from non-resident aliens who may not still be in the United States?
▶ 3:19:21Well, uh, that was not very good set of facts. And uh you know when we talk about stamping out fraud, waste and uh there's a prime prime example of things that uh we maniacally check and doublech check to ensure.
▶ 3:19:46Uh we have a powerful collections arm and that powerful collections arm is engaged in this set of efforts. Uh I'm happy to give you updates over time on what's going on there. Uh but clearly, you know, in the in the category of uh getting back what we're owed, those errors clearly sit at the top of the
▶ 3:20:09Thank you, Mr. Bizagno. I certainly appreciate the followup because the Biden administration improperly cut checks to foreign workers in the United States on temporary visas and we don't, it appears, have a great way of recovering that money. So, your continued follow-up and engagement on that would certainly be appreciated. Over and over again, the Biden administration promised the moon but delivered boondoggles.
▶ 3:20:32A $42 billion broadband program that connected zero people, a $7.5 billion electric vehicle charging program that only connected 50 vehicle charging stations. There were splashy press releases announcing infrastructure grants that immediately got kneecapped by red tape.
▶ 3:20:49And we also had an IRS with billions at its disposable for an IT modernization program that continued to blow past Both the Treasury Inspector General for the Tax Administration or TIGA uh and the Government Accountability Office have warned that IRS modernization efforts are behind schedule and over budget while the agency relies on outdated legacy systems. Mr. Biziano, Democrats uh gave the IRS billions of dollars to spend on monetization.
▶ 3:21:16Can you walk through how much of that was obligated and spent before your arrival on true modernization work as opposed to day-to-day operations as well as other unrelated priorities and will you provide this committee with a detailed
▶ 3:21:29Yeah. Um I think first of all uh I have a uh philosophy which is uh going backwards is not what my job is about. It's about going forwards. Uh as you know uh we rescended a fair amount of that money.
▶ 3:21:45Um, a lot of that money was originally allocated to increase staffing to proportions that were Um, but the more important thing right now is, uh, all runners on base are ours. They're all charged out, earned run average, as I'd like to say, and we are committed to the modernization program, and that's you see it happen during this tax season. Uh, any any further breakdowns you want?
▶ 3:22:15uh we're happy to give to your office, but I'm maniacally focused on having a great tax season this year and we're in the process of it in a manner that we're already planning 27s and we know the technology map that will be delivered in
▶ 3:22:29Thank you, sir. And finally, a simple yes or no would suffice. Uh would you call the Biden administration's IRS IT modern effort modernization efforts a
▶ 3:22:39I don't I didn't really see much happen.
▶ 3:22:41Thank you, sir.
▶ 3:22:42I didn't give you a note.
▶ 3:22:43Mr. Chairman, I yield back. Mr.
▶ 3:22:46Thank you, Chairman Smith, and to the ranking member, Mr. Vizik Nano. It's a a pleasure to have you here today. I appreciate you taking some time off from your other job as a Social Security Administrator, to talk to us about the operations of the Internal Revenue Service. Uh this weekend, I met with just over a hundred members of the Culinary Workers Union, Local 226, uh to discuss the implications of no tax on tips.
▶ 3:23:12While there, I had a chance uh to talk with Lesie, who's a bartender on the Las Vegas strip. Um her husband also works in hospitality. Like many couples uh who work in Nevada's hospitality and tourism sector, they both earn tips for a living and they filed their taxes jointly. And when they heard no tax on tips, they thought, great, Washington is finally listening. But then they read the details and learned that the deduction is temporary.
▶ 3:23:43Married couples face a filing penalty and automatic gratuitities may not qualify. And Lesie asked me a question that cuts right to the heart of this hearing. If this was supposed to help workers like us, why wasn't it written with workers like us in mind? So, with Leslie's story top of mind, I'm going to ask you just a few yes or no questions.
▶ 3:24:09The promise of no tax on tips should apply to every worker who earns tips and pays taxes, right? Yes or no?
▶ 3:24:18No tax on tips.
▶ 3:24:19Yes or no, sir?
▶ 3:24:20No tax on tips.
▶ 3:24:22Can you please answer my question? Is is the promise of no tax on tips, should it apply to every worker who earns tips and pays taxes? Yes or no?
▶ 3:24:33I think it should.
▶ 3:24:34Thank you. As the deduction is currently structured, some married tip workers face a marriage penalty. Is that
▶ 3:24:42I'm sorry.
▶ 3:24:43As the deduction is currently structured, some married tip workers face a marriage penalty. Is that
▶ 3:24:49I don't know that fact.
▶ 3:24:51It it is. Unlike the tax breaks provided for billionaires and corporations, the relief provided to working families via the no tax on tips deduction is temporary. Is that correct?
▶ 3:25:02Yes or no?
▶ 3:25:03Oh, that's a temporary deduction. Yes.
▶ 3:25:06If an employer shifts from tips to service charges or automatic gratuitities, that income may not qualify under the deduction. Is that correct? Yes or no?
▶ 3:25:15It may not. So, under federal law, tip workers can still be paid as little as for their work. Is that correct?
▶ 3:25:26I don't know that number.
▶ 3:25:27That is the current subminimum wage, as sad as it is. So, what I'm hearing is that the promise of no tax on tips and frankly the other so-called working family tax cuts that are in the so-called one big betrayal of a bill does not fully match or respond to the realities that workers and their families are experiencing. The promise on no tax on tips does not fully work for workers like Lesie and her husband.
▶ 3:25:54That's exactly why I've introduced the TIPS Improvement Act to make TIP tax relief permanent, inclusive for all workers, and protected from employer manipulation. Because if we're going to say no tax on tips, it should actually work for the people who live on tips. And that includes workers like Lesie in Las Vegas. Congress also passed the no tax on overtime last year.
▶ 3:26:21But like no tax on tips, the devil is always in the details. So again, yes or no? Do airline employees, railroad workers, and school bus drivers qualify for no tax on overtime? Yes or no?
▶ 3:26:35I don't know.
▶ 3:26:36You do not know. Okay. The answer is no. They do not. Three million workers who typically work overtime are currently ineligible for no tax on overtime. That's why I've worked with Representative Malatakus to introduce the No Tax on Overtime for All Workers Act to ensure that this program is expanded to include these essential workers.
▶ 3:27:01Would you be willing to work with uh my colleague and I to support this no tax on overtime for the 3 million workers who are missing out on that provision?
▶ 3:27:11I'm more than happy to.
▶ 3:27:12Great. I look forward to working with you on that as well. Let me conclude by touching on the issue you didn't want to talk about at the beginning of the hearing, but it does fall within the IRS. Uh, as you know, the IRS holds the most sensitive financial data in the federal government. We're talking about social security numbers, banking information, and income records for over 160 million taxpayers.
▶ 3:27:40The expectation for the American people is that the IRS will protect their personal information. And as you also know, under President Trump's watch, Doge shared the Social Security data without agency officials knowledge and in violation of security protocols.
▶ 3:28:00So, with your IRS hat on, why should the taxpayer trust you to protect their most sensitive information when you weren't able to do it over the
▶ 3:28:13First and foremost, uh, I've spent my career protecting PII and I've protected it in any job I've ever had, including my current responsibilities. I don't think your facts are accurate. So, it's not accurate that millions of Americans identifiable information, including social security information uh and other vital information was leaked by Doge.
▶ 3:28:44Yes or no?
▶ 3:28:46it was not. despite the fact that the Trump administration's own council in court uh records had to admit to that fact. You still won't take responsibility for that information on behalf of millions of Americans. It it's the biggest data breach in US history in my estimation.
▶ 3:29:10Your estimation is inaccurate, but thank you. Well, what's not inaccurate is that people do not feel that their information is being protected by this administration and it is something that you in both of your hats as IRS CEO and as the administrator of social security should take more seriously. With that, I back is way more seriously than you can
▶ 3:29:32Mr. Miller,
▶ 3:29:35thank you, Mr. Chairman. Um, right now, and thanks for coming. I want to focus on the uh tax modernization and really want to focus on digital assets. I believe digital assets represent one of the most significant economic opportunities in the global economy right now. The United States can lead in this space, but leadership requires clear, workable tax rules that promote compliance without stifling innovation. The IRS plays a critical role in getting this right.
▶ 3:30:01Clear rules, smart reporting thresholds, and administerable standards will strengthen compliance while ensuring that innovation and capital it attracts remains here in the United CEO Bizano, the IRS recently issued revenue procedure 2025-31 allowing digital asset ETPs structured as grantor trust to participate in staking. This updated guidance provided a first step toward meaningful certainty and demonstrated that IRS can adapt as markets evolve.
▶ 3:30:31However, important interpretive questions remain about the scope and mechanics of safe harbor. Will the IRS issue additional clarifying guidance such as FAQs orformational guidance to ensure taxpayers can comply with confidence? And what support from Congress would help you deliver that clarity efficiently?
▶ 3:30:49Uh first of all, 100% we uh we're deep in it. uh would be good to come talk to you about it and and make sure that for everything you're thinking about, we understand it and have it covered in that guidance. I'd say that'd be fabulous support.
▶ 3:31:04Thank you. In regard to digital asset reporting, we expect form 1099-DA implementation will generate a significant volume of information returns. Many of these may involve regulated payment stable coins that are designed to maintain a stable value, often resulting in minimal or no economic gain on routine transactions. Compliance is crucial, but it must be practical and strategically focused.
▶ 3:31:28Has the IRS evaluated whether processing extremely high volumes of low dollar digital asset transactions will materially improve compliance relative to the administr administrative burden and what legislative solutions will help the IRS concentrate resources where they deliver the greatest ROI?
▶ 3:31:44That that analysis is in process right now with uh some preliminary, but um I think we probably got a little more time to really have directly where where the sweet spots are and where the issues Yeah, I I really appreciate your time here today and I know I haven't been in my seat for that long, but I I have to say I am disappointed.
▶ 3:32:06I really would You guys and his team, you need to do a better job of educating the IRS commissioner about the questions that he's coming here to answer. I mean, I I I'm very embarrassed right now uh from my side, and you're doing the best you can, sir. I know you're coming into this with an amazing background and what I'm saying is going to get me in a lot of trouble, but this is unacceptable.
▶ 3:32:27Um, you really need to come in here and answer the questions that these members ask you directly and saying, "I'll come see you in your office, even to me on very basic questions that I'm asking you is really upsetting. And I don't actually think it's you who's letting us down. I'm going to look at your team right behind you." Because if I was working for a principal, I would never let them walk into a hearing like this if they worked for me. Mr. Chairman, I yield back. Miss Plask.
▶ 3:32:58Thank you very much, Mr. Chairman, and good afternoon, Mr. Bizignano. Is that correct?
▶ 3:33:06Yes, ma'am.
▶ 3:33:07Okay, great. Thank you. um wanted to have a I I represent the Virgin Islands and we have a very unique tax system as you're well aware where we have a mirror code of tax administration. Our residents of course as you know pay income taxes to the Virgin Islands Bureau of Internal Revenue, not the IRS, but their liability is calculated using federal tax rates.
▶ 3:33:34Um, and this distinction is foundational on how our territory functions. In 2025, many Virgin Islanders received notices from the IRS claiming non-payment of federal taxes. And these notices were alarming and confusing to a lot of constituents who had dutifully paid their taxes through the territorial system as they always had were legally required to do so.
▶ 3:33:59Um, our office contacted the IRS about the problem and your team responded promptly and effectively and we're really grateful to that. I learned that before the recent restructuring, the IRS system automatically generated notice letters for all non-filers and then previously you had employees who would manually review and then remove letters scheduled for Virgin Islanders um because they recognize the mirror tax system.
▶ 3:34:29However, with the restructure structuring, uh, this led to this disruption and letters went out when they should not. I understand that your team is working with the Virgin Islands Bureau of Internal Revenue to address the problem. Um, and just wanted to make sure that I have your assurance that they will continue to do that as we come into the new tax season.
▶ 3:34:50100% and any other help you need, we're 100% available.
▶ 3:34:55Thank you. Um, the other issue I wanted to raise to you is one that is a fundamental inequity affecting territorial residents, not just Virgin Islanders, but all of the US territories. In your role as commissioner of Social Security, you oversee federal benefits intended to provide a safety net for elderly, blind, and disabled Americans.
▶ 3:35:20Um the I want to direct the committee's attention to a significant gap in the safety net, the exclusion of United States citizens residing in US territories from supplemental security income eligibility. Now, this committee has looked at this issue previously and has tried to make congressional fixes to it in previous legislation which went through the committee passed in the House but was not taken up in the Senate.
▶ 3:35:50I wanted to know, sir, if you would commit to working with my office to seek a solution to the problem that would provide SSI eligibility to people living in the territories. Although I've answered multiple times, uh, this is not an SSA hearing. Yes, ma'am, I will.
▶ 3:36:07Okay. I appreciate that. And I want to thank you again for working with us, uh, and the unique tax structure that we have with a mirror code. That means that additional attention needs to be paid sometimes to how we are paying into the Virgin Island system rather than the federal system. and of course want to thank you again and hopeful that yourself or someone from your team would work with us on the SSI issue.
▶ 3:36:35I recognize that the Supreme Court has said that this is a congressional issue, but I'm sure that having the support of your office would go a long way and convincing other Americans that in fact there is benefit to this rather than keeping these individuals out and then in some ways becoming an an greater financial burden because of illness and other issues that they may have by not having this support of SSI.
▶ 3:37:05um that in fact something can be done to fix it. And with that, I'm going to yield back the balance of my time, which I do have. And um thank you for the opportunity to speak with you.
▶ 3:37:17That is truly yielding time. So, thank you, Mr. Maran.
▶ 3:37:23Thank you, Mr. Chairman. CEO Bisgano, thank you for being here this morning. I'm really excited that we're getting to talk about how your work at the IRS is making lasting impact for the good of the American taxpayer. We talk a lot in this committee about the amount of money that the taxpayers are getting back because of the substantive decisions that we've made, but I think it's also important for us to talk about a lot of the processoriented matters that your uh that your office is taking advantage of to make the process better for taxpayers and to
▶ 3:37:53provide better service for them. So, thank you for that. As you know, congressional uh Republicans are working to modernize all of the tax enforcement and dispute resolution matters. But I'd like to specifically talk about uh the latter part of that process.
▶ 3:38:06My bill with Miss Su HR5349, the Tax Court improvement act passed out of the House last December and it gives the tax court clearer authority to sign subpoenas, obtain discovery evidence before a hearing, streamline judicial review, and hold tax court judges to the same disqualifi disqualification standards as other federal judges, all whilst improving security and civility in court proceedings. From your vantage point, here's my question.
▶ 3:38:34As IRS CEO, how can these improvements in tax court procedures and standards help the IRS conduct more efficient, fair, and timely enforcement and a audit operations? And are you aligning your modernization efforts such as case management systems and litigation support tools to take full advantage of these needed changes?
▶ 3:38:54Thank you for the question and uh you know I think the tax law changes are a big deal for us. I think you know this is all end to end process and our ability to in every step of the end to end process make improvement uh both with your help uh and technically we'll get better outcomes you know we're maniacally focused on taking time down you know and I appreciate your comments earlier because the fact of the matter is uh we've been
▶ 3:39:25able to give the American public time back with all the modernization we talked about or transformation information of allowing them to do 40 million more queries online this year than last year and it all it's all part of the same equation uh helping the American taxpayer.
▶ 3:39:40Yeah, there's lots of improvements to be made and your office under your leadership is doing that. So, thank you. I want to shift focus to a more specific tax enforcement issue that has plagued the IRS the last 5 years, the employee retention tax credit. A recent report from the GAO published this month confirms the massive scale of the crisis that you inherited, noting that the IRS has processed nearly 5 million ERTC claims totaling approximately 283 billion as of June 2025.
▶ 3:40:10Shockingly, the GAO found that 83% of those refunds, roughly 235 billion, were not even issued until years after the pandemic ended, primarily because the Biden administration was so unprepared to assess improper payment risks or process the surge in claims. Here's my question.
▶ 3:40:29The GAO report specifically criticized the IRS back then for not allowing key risk management principles and for failing to even produce an estimate of improper payments as required by law. As CEO, how are you using your new staff redirection and modernization tools to finally quantify these improper payments and claw back the billions of dollars that GAO suggests were paid out to bad actors and ineligible claimants?
▶ 3:40:56Yeah. uh you know we had about 1.5 million outstanding uh that's down to 29,000 so that was uh the ability to clear it all out and accurately earlier I talked about a riskmanagement meeting and uh that discipline is to go at all GAO comments all IG comments and solve the problem uh and so you know as we get together on Fridays this is on a
▶ 3:41:26to-do list of things that have to uh look back and there's fraud, waste, and abuse in here, and our job is to deal with it.
▶ 3:41:34One other thing I'd like for you to put on the to-do list to end my time today. I want to reiterate on behalf of a number of companies in my district, the importance of the factory floor research that's routinely excluded from qualifying for the R&D tax credit. something that my colleague Congressman Kustoff raised with you. This along with the compliance burdens uh burdens companies uh face due to inconsistent interpretations each year are stifling innovation and that's not what we want. It's not what you want. It's not what I want.
▶ 3:42:04I know it's not what um what this committee wants. So I would just urge you to look into that matter that factory floor research and its inclusion into the R&D tax credit. So thank you for your time. Thank you again for being serviceoriented and oriented towards the taxpayer bringing more value and efficiency uh to the taxpayer themselves through uh everything that you're doing. So thank you. I yield back.
▶ 3:42:26Mr. Suazi.
▶ 3:42:28Thank you Mr. Chairman, Mr. Bizigno. Thank you so much for being here today. I know it's been a a long hearing and I appreciate your service to the country. Uh we're grateful to you for the hard work that you put in on behalf of the American people. Uh we got a big problem in our country with massive deficits. It's a major major problem and there's only two things you can do. You can either increase revenues or decrease expenses. That's the only choices you have. Increase revenues or decrease expenses.
▶ 3:42:56And that's a very big part of where your job comes in. When it comes to the decrease expenses, they tried earlier on before you were in this position to use Doge to try and cut expenses in different departments. And Doge, especially at the time that Mr. Musk was was running the whole thing. I don't think did a very effective job. In fact, I think it may have cost us money in the process. And we've heard today about the release of some private information. Do you think that Doge when it was under Mr.
▶ 3:43:25Musk did a good job here for the country? You know, uh I like to say when I came in, uh really Mr. Musk was gone. Uh, and so I said earlier about looking back, it's not really where I spend my time. I spend my time looking forward. I think we're driving a client service agenda.
▶ 3:43:46No, no, I know that. I was just saying because this whole thing about the release of people's private data and I know privacy is a very big issue for you both in your private sector career before this and now if you said many times today, I've been listening to you how important it is to you. But they did release private data back then. And so I'm just asking, do you think that they did a good job under Mr. Musk in their efforts to try and reduce expenses and also releasing this information? Did they do a good job?
▶ 3:44:11I I it's they covered a whole
▶ 3:44:14Okay, let let's not talk about it then. Okay, so you said earlier that there are three things that are your priorities. Number one is service, number two is collections, and number three is privacy. Privacy we're not going to discuss any further because we think there's some been some real privacy violations that took place under the Doge leadership that was there before you took this position. Number two is service. I know service is really important to you. It was important to you in your private sector career before you came here.
▶ 3:44:42You're trying to work on service, but we heard a lot of complaints about delays and things like that today which have always existed at the IRS, but there's cons some concerns that it's gotten worse. One of the things that happened before you got there, before the Trump administration took over, is they increased the size of the number of employees in the IRS dramatically. They increased it to a 100,000 employees and then at the beginning of this year it was down to like 80,000 employees. So that's where the 20% reduction comes from. Has there been what do you think is the right number of employees for the IRS?
▶ 3:45:12Well, you know, I've uh committed to have the right number of employees.
▶ 3:45:16What do you think that is? Well, I think right now, you know, I I heard your comment about delays, but if you look at the data, it's getting the we're getting the best performance for our client
▶ 3:45:26Okay. Let's say you're doing a better job. I just want to say, what do you think the number of employees for the IR you you know this number? I'm sure you
▶ 3:45:32I feel about the number of employees I have right now.
▶ 3:45:34So, it's about 80,000 right now.
▶ 3:45:36It's 70 call 7 a little less than 75.
▶ 3:45:40So, there's been a 25,000 person reduction in the number of employees. How does it stand as far as the customer service employees? How many employees do you have in customer service?
▶ 3:45:50Uh, you know, I mean, that's the largest component of the place. Uh, and in fact, you know, right now we're answering the phones in single digits, which is
▶ 3:45:59Okay, I just want to try and get the actual numbers.
▶ 3:46:02Okay, let me move on to the last part because I'm running out of time. Is collections. Collections is really the big big thing. Do you think that the idea of the tax gap is a real thing? bunch of people out there that are not paying their taxes and should be paying their taxes. They're not, you know, there there's been testimony before this committee by previous IRS commissioners and others about how big the tax gap is. Do you think the tax gap is a real thing that there's money out there that we could be collecting that we're not collecting? And number two, how big do you think the tax gap is?
▶ 3:46:30That's a it's it's it's like a really great question and uh I've I've talked a couple times say about it. You know, the last report out says the tax cap is $650 million. That's 2022. historically, it appears that uh the tax cap was not an attacked item if you look at it, right?
▶ 3:46:54Not attacked.
▶ 3:46:55Not I mean,
▶ 3:46:56yeah. So, we need to attack the tax gap and try to get that $650 billion. work the work going underway right now is to understand what's the real addressable market of the tax gap and I think and I said I'd happy to come back when you think appropriate right after that analysis is done to understand it better
▶ 3:47:17well I'd like to meet with you personally because my impression right
▶ 3:47:20or come to Long Island whenever you want
▶ 3:47:22no I we'll be here in Washington that's fine but Long Island would love to have you too but I think that right now the tax gap is the result of some of the you said before you didn't think this was the case. I still think it's the case. I'm willing to be educated by you, but I think it's wealthier people and corporations that have had less audits than they've had. Like it's I think it's something like 30% less than they used to be 10 years ago.
▶ 3:47:46And so we need to figure out how we can collect the money from the people that owe us money that are not paying their taxes to make sure we're getting our what the US government deserves pursuant to the existing tax
▶ 3:47:59Happy to work on it with you.
▶ 3:48:00Thank you, Mr. Biznado. I yield back,
▶ 3:48:03Mr. Moore.
▶ 3:48:04Thank you, Chairman. Mr. Bisnano, like sir, really appreciate you today. Uh appreciate it. our closed door meetings. Anytime you're in in public, one of the most forthright officials that I've had a chance to interact with. Um you you you communicate reality. Uh you're about the numbers. Um and it's it's very much appreciated. I'm lucky representing the Ogden, Utah to represent over 7,000 IRS employees in Ogden.
▶ 3:48:32It's clear to me these employees are hardworking, dedicated people who they're they're excited to be part of the technological innovation that that you want to bring to um ultimately increase their efficiency and their ability to do their job. And I love that we're seeing good numbers on this and uh it's something that you know we'll always be willing to work closely with you. Happy that the IRS is prioritizing customer service and timeliness in the process of returns this season.
▶ 3:49:00Can you speak to how you are simultaneously incentivizing the number of claims processed and ensuring the accuracy of those claims being
▶ 3:49:10Well, the only way to do more is with technology, right? And uh I mean uh direct deposit which we're huge advocates for for both eliminating fraud and also improving timeliness is really allowing us to get more more money in Americans pockets better. Um and then you know the accuracy is the job right? There's nothing more important than timeliness and accuracy.
▶ 3:49:39And you know, we continue to build systems that allow us to be able to react quickly to the data in front of us. Like I said earlier, simple math error is a lot of times are immediately prompted to the filer to know.
▶ 3:49:53Um so I think you know uh we implemented uh a pretty big set of rules uh that uh you know there was lots of reports out whether it be the inspector general or GAO uh you know uh or the uh national taxpayer advocate wondering how we could get this done. But the good, hardworking people of IRS were highly motivated to execute on this.
▶ 3:50:23And I can't say enough about having a good dedicated workforce and career leadership that's getting the job done.
▶ 3:50:30Yeah. And we see it too. Um in my
▶ 3:50:32new sorum in Ogden.
▶ 3:50:34Yeah. Well, you're welcome out to Ogden anytime. Uh the working families tax cuts last summer. We prioritize setting families up for success with larger and permanent child tax credit, increased standard deduction, and of course, one of my priorities was making investment accounts available to every American child. Um, over the next four years, every every baby born will have a seated account in Trump accounts.
▶ 3:50:59Plus, you have philanthropy stepping in and doing an just like a mind-boggling amount of of contribution to enabling children under 10 basically to be able to start this concept of investing for their future at the youngest age possible. Um, I think it's a gamecher. I know you're aware of it. Uh, these are you've done IRS has done a great job of making this easy to sign up for.
▶ 3:51:24We've already had I believe 3 million um 3 million children have already signed up for this and so making form 4547 available is huge and it's an it's an operational goal as well as an aspirational one as well. Uh you've had an extensive background in financial services. Can you share how you would approach this new opportunity um in you know in one of your say former roles in that sector? How would these accounts set up a new generation of Americans for success?
▶ 3:51:52Well, I mean, uh, you know, you've seen the math on it. You see what it's worth. Uh, I think it's, uh, innovative, creative, and I think it's being wellreceived. Uh, I think it will become explosive.
▶ 3:52:06uh you know it's uh obviously uh it's it's July of uh 26 where it's fully enacted but the fact we have uh 3 million enrolled one and a half per family almost a million newborns getting the thousand deduction the thousand benefit um and I think you know we're going to have what I call plenty of distribution partners right all types of financial
▶ 3:52:36advisors are going to advise families. It will be it will be a natural adjunct as the IRA was. It's just a different form of IRA. It's uh innovative, creative. I give everybody a ton of credit for what they've done and uh I think we've only just begun on it
▶ 3:52:56and I can't express my appreciation as simple as we can make this for people to recognize this is a good program. that gets signed up and they get set up for success. Companies consider contributing at grandparents as well as philanthropy. Uh it's going to be an awesome opportunity. So, thank you so much, sir. I appreciate it. And thank you to your
▶ 3:53:14Thanks for having me.
▶ 3:53:16Um I want to thank you CEO um Bizignano for appearing before our committee this afternoon. Um please be advised that members have two weeks to submit written questions to be answered later in writing. writing those questions and your answers will be made part of the the formal hearing record. And with that, the committee stands adjourned.
▶ 3:53:40Thank you.