Chairman Pascrell Opening Statement at Select Revenue Measures and Oversight Joint Subcommittee Hearing on “Minding the Tax Gap: Improving Tax Administration for the 21st Century”
(As prepared for delivery)
Thank you, Chairman Thompson. I am are pleased to be holding this joint hearing on the pervasive tax gap and improving tax administration to address it.
The tax gap, or the measurement of the difference between what taxpayers owe and what they actually pay has become hugely significant. This gap matters immensely as we come to terms with a tax code that fosters one system for the wealthy and another system for average Americans.
The disclosure this week that some of the wealthiest Americans pay barely any tax was shocking but also not surprising. The revelations should give us greater urgency to address fairness in our tax laws
That is why I am looking forward to the testimony of our witnesses, starting with representatives from the Biden Administration. President Biden has put forward an aggressive agenda to improve compliance. The President’s plan to rebuild the IRS will enable IRS to engage in more effective enforcement, particularly for wealthy scofflaws. I want to hear more details from Assistant Secretary Mazur and Deputy Commissioner O’Donnell.
We are also fortunate to have witnesses who are experts in the academic and private sectors to help us evaluate what Congress should do and can do to produce real results to narrow the tax gap. Any changes we consider, however, must do so in a way that is fair and preserves fledgling taxpayer confidence in our voluntary compliance system.
One way to improve taxpayer confidence is effective taxpayer assistance within the IRS. Taxpayers need guidance in preparing their returns and paying their taxes. Everyone cannot afford accountants and advisors. IRS should do more to help as a matter of fairness. Admittedly, decades of underfunding and the pandemic wreaked havoc on this function, but we must quickly rebuild it.
A corollary of this is ensuring that tax return preparers are qualified to assist taxpayers. I am eager to learn more about how the Biden Administration’s tax return preparer regulation proposal will advance this goal.
Finally, I believe that transparency and accountability are the building blocks of effective tax administration. This Committee continues to wait for the Administration to respond to our legal request under Code section 6103 for the former President’s tax returns.
Additionally, we may have an illegal leak or hack of private citizens’ tax return information. As Oversight Chair, I have asked the IRS to fully investigate. I expect a prompt and transparent response.
I yield back, Mr. Chairman, and look forward to our witnesses’ testimony.