At Hearing, Senator Portman Highlights Need for IRS Reform
WASHINGTON, D.C. – At a Senate Finance Committee hearing this morning, Senator Rob Portman (R-OH) questioned IRS Commissioner, Charles Rettig, on how Congress can assist him in making the IRS more accountable and responsive to taxpayers. Commissioner Rettig agreed with Senator Portman that a functioning and effective IRS Oversight Board is needed to help the agency navigate strategic decisions and bring greater continuity when there are changes in agency personnel.
Portman: “Thank you, Mr. Chairman. Commissioner, thank you for being here and congratulations on the progress so far in the filing season. As you know, I have been one of those people who believes that IRS needs some fundamental reform. You and I have talked a lot about that. Senator Cardin and I have legislation intended to make the IRS more responsive to taxpayers. I also support the legislation that passed the House by voice vote, just this week and I know that Chairman Grassley wants to bring that up in committee. I must say that I am impressed that since you’ve gotten there, we have seen some successes. I think we’re headed in the right direction, although we have a lot to do.
“One I will tell you that I want to point to is combating tax related identity theft. This is something we talked about as you went through the confirmation process. You pointed out in your testimony that the number of reported victims of identity theft fell 71 percent since 2015. I will say that just in the last few months we have seen some success. To put an Ohio spin on this, back a couple of years ago, my staff personally handled almost three dozen cases of tax-related identity theft. Last year, that number fell to just one case. So we’ve seen real progress back home too and we appreciate your doing that. With regard to the IRS reforms, streamlining the critical pay authority for IT employees is something I think you and Senator Cardin just talked about. I think that is really important, reinstating that. I assume from your answer that you agree with that and having to rely on infrastructure that dates back to the Kennedy administration is another problem. This outdated IT infrastructure is costing taxpayers money. It’s costing you to have to go back and correct taxpayer information. Maybe you can talk a little about the need for you to have better IT infrastructure and what’s that going to take in terms of funding.”
The Honorable Charles P. Retting, IRS Commissioner: “It’s the code that goes back the Kennedy administration and the hardware is somewhat newer than that but nevertheless we have systems that need to be updated that they’ve been patched throughout the years and the IRS systems have been asked to take on more and more tasks. We have about 60 different applications. I think we have about 12,000 or 13,000 servers on 12 mainframes. It’s difficult to continually patch. At some point, we need to replace and we’re definitely at that point. We’re as well posed as I think we’ve ever been to – and I was somewhat familiar with this when I was on the outside – but ours is as well posed as it’s ever been to be able to modernize both the infrastructure as well as the language so we’re moving forward with the ability to be agile and flexible as newer technologies come along.”
Portman: “And what do you need in terms of funding? I know you have a budget request in, but what do you personally need in terms of funding to get this IT modernization effort underway?”
Commissioner Rettig: “The funding request in the plan is over a six-year period between $2.3 billion and $2.7 billion and it’s essentially two three-year phases with independent outside appraisers looking at it.”
Portman: “Do you think that’s adequate?”
Commissioner Rettig: “From what I’ve seen I have. I believe it is today. If it changes I would certainly let you know and I’ve been significantly involved in that from day one.”
Portman: “I hope you will continue to talk to this committee and the Ways and Means Committee about specifically what you need. I know you’re sometimes constrained by what’s in the president’s budget but to the extent that you can to tell us what you really need to modernize that IT because that is so essential to taxpayer service and to saving taxpayers money.”
Commissioner Rettig: “Senator, if I might add to that, I was reminded that one of the critical functions as we move forward with modernization is the ability to have multi-year funding so we don’t start and stop and start and stop so that our people can get the job done. So that would also tie in with all of that.”
Portman: “And I support that with regard to infrastructure, with regard to the need to be able to have some certainty on your modernization effort. On the IRS strategic direction, as you know the IRS Oversight Board is one the House took out last year out of their proposal. This year, it’s back in. It does not have all of the provisions of the Portman-Cardin legislation that makes the IRS Oversight Board, in my view, more of a strategic advisory board. It actually decreases the number of individuals. It’s become defunct in essence over the last five or six years. Can you tell us what you think of the IRS Oversight Board? Does it have a role to play in your mind? What’s your view of the House-passed bill?”
Commissioner Rettig: “As you know, previously I participated in the IRS Advisory Council which is not an oversight board but it was an outside board and I thought it was significant for the ability of the agency to bring in outside expertise and put the issues in front of them. I’m in favor of an oversight board, I’m actually in favor of oversight generally also as well for the IRS itself. I think it brings accountability and responsibility to everyone in the agency, including myself. And I think it allows us the opportunity to possibly get some expertise on a basis that we might not otherwise be able to acquire.”
Portman: “Well I appreciate your support of that. Expertise you mentioned, you also mentioned accountability. The third I would mention is sustainability. In other words the IRS has gone back and forth over the years with reforms, depending on who the Commissioner is and who the Treasury Secretary is so this would provide some continuity.”