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Chairman Smith Opening Statement: Hearing on IRS Accountability & Transparency

April 27, 2023

As prepared for delivery.

“Commissioner Werfel, thank you for being here today.

“I first want to address an issue that has been widely reported. Last week, a whistleblower came forward with troubling claims about abuses of power. We are conducting a review of this matter and will go wherever the facts lead us. I expect full cooperation from the IRS, particularly with regard to ensuring this whistleblower is protected from retaliation.

“We value the importance and the role of whistleblowers in ensuring the integrity of our governing institutions – which is why we established an online portal providing IRS employees a direct avenue to provide information regarding any wrongdoing they may witness or believe to be occurring.

“Commissioner, while I know you are new on the job, it would be irresponsible not to put you on notice about the various concerns the American people have about your agency. Over the past two years, the IRS has:

  • Leaked private tax information of Americans at the same time the Biden Administration was pushing tax increases on those very individuals.
  • Accidently posted online the private taxpayer information of thousands of retirees…apologized…took it down…said it wouldn’t happen again….and did the very same thing four months later.
  • Destroyed over 30 million tax returns due to the backlog.
  • Tried and then delayed for a year a new paperwork nightmare for gig economy workers under new 1099k reporting requirements.
  • Promised to release a spend plan for the $80 billion pay raise Democrats gave the agency only to fail to explain whether low-income taxpayers will be protected from increased audits, and failed to show how many bureaucrats in total you plan to bring on payroll.
  • Repurposed $3.9 billion of the $80 billion to support costly green corporate handouts.
  • Requested an additional $43 billion for your agency last month – on top of that $80 billion from last August.
  • Concocted plans to become the tax preparer, tax filer, and government auditor of the American people.

“I was surprised that after receiving the greatest windfall in agency history, the President’s FY24 budget requested an additional $43 billion – 91 percent of which is targeted toward enforcement and operations, like further increasing audits on middle-class families. Meanwhile, the IRS cannot tell us in total, beyond the next two years, how many people it plans to hire with its new funding.

“Statements from you and from Secretary Yellen make clear that audit rates will rise for Americans earning less than $400,000 – the only question left is how fast those rates will rise.

“When I asked for a plan, I was not looking for assurances, I was looking for concrete proposals of how the Treasury Department and your agency will protect lower- and middle-income Americans. I look forward to you making good on your commitment from last week to follow up with far more detail about how your agency plans to spend these funds over the next ten years.

“Democrats supercharged the IRS with the hope of raising billions to pay for special interest tax breaks for the wealthy that are now projected to cost three times that amount. Now the IRS is dedicating billions to support these green corporate handouts. It’s clear Democrats are all about subsidizing the low-emission lifestyles of the wealthy.

“It’s not only new audits Americans have to worry about. The Inflation Reduction Act includes new reporting requirements for any Venmo or PayPal transaction over $600. Is it really a top priority for tax collectors to know whether someone is selling a used couch, unused concert tickets, or paying their neighbor’s kid to mow the lawn?

“This gives your agency far too much power and in effect creates a surveillance network that will invade Americans’ privacy and squeeze them out of more of their hard-earned dollars.

“The IRS has a lot of work to do to repair the trust it has broken with the public over the last decade. I hope we can begin the conversation to do that in today’s hearing.”