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tv   Key Capitol Hill Hearings  CSPAN  January 27, 2015 1:00am-3:01am EST

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screeria -- nigeria. - a look at the
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financial influence that outside groups have in today's elections. next, a look at irs operations and how budget cuts have impacted the agency's ability to provided equate customer service. from washington journal this is an hour. at the time table nina olson the national taxpayer advocate here to join us to talk about budget cuts and customer service.
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related issues. remind us what your job is. what does a national taxpayer advocate do? >> the national taxpayer advocate leads an organization within the irs that is charged with helping taxpayers solve problem's with the irs and make administrative and legislative recommendations to congress about how to improve how the irs treats taxpayers and protect taxpayer rights. >> how long have you been doing this job? >> since march, 2001. >> your office put out this annual report to congress so we can take a look at it here. one of the headlines that came from it is from the new york times. need help from the irs? it may take more patients this year. what does it tell us about the conditions this year in the tax season? >> what we have tried to identify is the impact on funding cuts to the irs on the taxpayer service side.
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the way that most taxpayers communicate with the irs is by phone or correspondence. what the irs is projecting this year is that it will not be able to answer about half of the phone calls they are trying to get through to talk to a live person and they are so far behind in answering their correspond. if they get through on the phones they are likely to have a 30 minute wait, >> did you expect it to be this severe. >> i did because i have been projecting this for years seeing the trend that was happening on the taxpayer side. there isn't an answer to the phones or correspond other than having more human beings to answer the volume of the calls. the irs gets about 100 million calls per year on average and 10 million pieces of correspondence a year. that's a lot of stuff to
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process. >> the piece points out that comes from the report, points out that callers who get through are expected to be on hold for an average of 30 minutes that is a decline of 61% average waiting time 18 minutes in the 2013 fiscal year. when the wait is too long, the agency offers what is called a courtesy disconnect, otherwise known as hanging up. >> in our report we have a flowchart, we try to make a phone call and get through to a particular part in the irs after six minutes and nine seconds my staff received one of those courtesy disconnects. which is polite saying we are unable to handle your call at this time, please call back. i think the diagram shows the craziness of what you have to go through to try to find your way around. >> our guest will be with us for about 15 minutes. she's nina son-in-law the
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national taxpayer advocate. we have phone lines at the bottom of the screen. i'm sure we will have lots of calls coming in here but tell us more of the takeaways from the report. >> some of the things we have been trying to say is that i do recognize that congress is very unhappy with the irs and the taxpayers have a high distrust with the irs. i think not giving them sufficient funding actually harms the taxpayers themselves. i don't think people recognized -- when i say taxpayer service it is not just answers to tax law questions which the irs is no longer doing in any significant fashion. also people getting notices from the irs that says you owe money, the same number you are calling and the same people are
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answering to help you unwind that notice to stop something bad happen to you. you want a penalty abated, you have a notice saying the social security number for your child is incorrect, you are to give them the correct number and you cannot get through and the irs will disallow your dependency exemption or any refundable credits. that is harm to the taxpayers, tangible harm. >> here is a picture from one of the business publications. difficult tax season lies ahead. it has a picture of the current irs chief. it talks a little bit about how difficult the season will be. it makes me ask about collections and enforcement. what do your customers know? >> i think people need to not
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if the irs sends you a letter saying you owe money. the irs says they won't be able to do as many audits or as much collection. this is where i make a distinction between taxpayer service or enforcement. i spent my life examining the irs and that is my job. for years, i have been critiquing the way the irs conducts audits and collection activities. i view this as an opportunity to see how we are doing it and get revision and some very taxpayer friendly burden off the taxpayer on the enforcement side. on the service side there is no substitute for having more people to answer the phone.
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last year, the irs limited the scope of tax law questions it was willing to answer. it said it would only answer simple tax law questions. it would no longer answer a question like, my child has a bank account, how should i report the interest income? on my return on my child's return? that is too complex for the irs to answer. when you get to that level, that is just absurd. to ask taxpayers to continue to comply with the laws when we are not giving them that kind of assistance you have to rethink what you're asking. >> what has the head of the irs said about dealing with the service? >> he has said, be patient. i think he has said this is where we are.
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i am concerned the message is to go out and pay for assistance. we have a lot of qualified return preparers but there are a lot of unqualified preparers. i am concerned that what will happen as a result of these cuts and the consequences, is that taxpayers will go to people who are not qualified to give them advice and they will do things wrong. then bad things will happen to taxpayers. >> before we get to calls, one big thing we are talking about is the affordable care act. how will this complicate tax filing season? first of all, what will happen and what does it mean? >> this year is the first year that people who have got the advanced premium tax credit, the subsidy to help pay for health insurance will have to file and reconcile the advance payments they get with the actual payments they should have gotten based on their actual income.
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if you recall when they qualified for these advance payments we were really using old income information from their 2012 income tax return updated with whatever information they had for their current year. you really don't know until the end of the year when you file your taxes what you should have gotten. that is a complicated process for taxpayers and the irs. this is also the year where we will be issuing the first individual shared responsibility payment, taxpayers who should have got health insurance and did not or who may have had an exemption but didn't claim texas elmtion in advance and this is happening in the crunch of the filing season where we're short staffed as it is. it will take a lot of patience to get through the filing season. >> nina olson takes calls now, first from bob. from el paso texas. a democrat. hi, bob. >> good morning.
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>> good morning. >> bob, if you can turn the sound down on your set we'll hear you a lot better. >> i got you. >> this is bob from el paso. >> are you ready for my question >> yes, sir. go ahead. >> i would like to know when president obama says if you have medicare you don't have to worry about anything involving extra payments. et cetera. and my friends alltel me no you still have to go out and buy extra insurance policy and i said well, you know, i got a state policy that's supposedly my back up like the state told me but i would like for her to clarify the fact that now that i'm on medicare period do i have to worry about my income tax forms that are coming down. >> if you're covered by medicare no you don't have to do any
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reconciliation or anything like that. and, you know, coverage by medicare/medicaid, other state funded programs means you wouldn't be subject to the individual shared responsibility payment either. so you don't have to worry about that. >> jeff from rockville, maryland outside of d.c. >> good morning, i just want to say i think you do very good work and i read your report year every year, but i'm curious with the recent budget cuts that have occurred, i see their funding keep going down. generally every year i see reports that x number of billions of dollars are lost through fraudulent returns. what is your take on that as far as the resources being used to combat fraud with tax returns? >> there has been an explosion in two areas. in terms of refund fraud. let me say that one of the reasons why that is occurring is
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because the government enacts laws that run a lot of social programs through the internal revenue code programs. like the earned income tax credit a refundable credit for the working poor. a number of credits on the business side. that makes it very attractive target for organized crime or even random criminals who think they can try to game the system. and get some of these credits. there is that aspect of fraud and then there is identity theft which we have seen an explosion of in the last few years. the irs has spent a lot of time building filters in their filing seasons, filing systems so that every return that comes in asking for a refund moves through that system and tries to identify characteristics of fraud. i think over the years it has
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done a good job identifying fraud. having said that, criminals are very clever and are able to move very quickly and there always be stuff going through the system. what i am concerned about is, there will always be some false positives, when you free up refunds and the taxpayer is entitled to that refund or there is a legitimate taxpayer whose refund has been frozen. if you don't have the right staffing to help those victims, then you are re-victimizing those victims and they have to wait up to six months or even longer to get their issues revolved. we have seen that in my own organization, refund fraud is the fastest growing category of cases that we have for helping taxpayers with significant hardship. identity theft cases make up 20% of my 240,000 case receipts per year. it's a major issue. >> what can people do to prevent fraud?
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there's a tweet here. stolen social security numbers are used to file fraudulent tax returns, how can folks protect themselves. >> first of all, checking your credit report on a regular basis is very important. secondly the irs -- if you have been a victim of identity theft, once you get through the irs process the irs will give you what they call an ip pin which is a separate norm social security number that you can put on entrepreneur come tax return in addition to your social security number and that willett your return move through quickly. even if an identity thief tries to file another return, we won't hold up your return. they're doing a pilot this year and several locations including the district of columbia offering people the opportunity to come in and get an ip pin. they have to go through a
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validation process. that may be the future not just your social security number but also this unique number that you can put on that the identity thief would not know. >> payback from the irs. a budget cut means poor service and she writes as the irs screams about not issuing your refunding a timely manner or answer phones or provide easy access for the elderly there's another answer. they can stop wasting billions of dollars every year. in 2013 the newspaper reported that the irs paid $13.6 billion in bogus claims, the income tax credit and as much as 132.6 billion over the past decade. an internal audit has some members of congress questioning how the agency can administer obamacare. >> i will talk about the income tax credit but i will say that i do not scream, i am a moderate voice and i try to make clear what the impact is.
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i'm not involved in the politics of it. let me say something about the earned income tax credit. it was enacted in 1975 as an off set for the working poor against the regressive effect of social security which comes out of the very first dollar that you earn. over the years, with both bipartisan support, it has been expanded to the major anti-poverty program for the working poor in the united states and, again it's run through the internal revenue code. the idea of running it through the code if you were low-income but worked and had family members, children that you would get money back -- even if you didn't pay anything in and that would raise you above the federal poverty line and ensure that people below the federal poverty line didn't pay income taxes. now the issue is there is a lot
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of overclaim. a very complicated law. i'm a tax lawyer with several advanced degrees in taxation and i taught courses on the earned income tax credit. it is right up there with advanced trade for pricing. it deals with language, mobility, trans and see, that population is -- transiency, that population is unregulated. a lot of it dealing with preparers who are facilitating errors in fraud. let me make one other point which is that the earned income credit, as a benefits program that is administered through the internal revenue code, the inspector general has estimated that it really only has about 1% cost in administrative cost. it has a 22% error rate.
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it has between 75% and 80% participation rate. you compare that to other programs like welfare or food stamps or children's health insurance and you will see very high administrative overhead costs because they are dealt with in appointments and person to person. some fraud and very low participation rates. if you look at it in a holistic way it's an incredibly successful program. i would suggest we not just look at the over claims but the cost of administering it. >> let's get back to calls. kathy has been waiting from columbus, ohio. a republican. good morning. >> good morning, thank you for taking my call. miss olson, i commend you for the job you have been trying to do sincerely. i must tell you that all of this makes a strong case, a really strong case for radical tax reform in this country.
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specifically the flat tax which would eliminate the irs and you could retire. [laughter] just a staggering number of calls. just that millions of calls annually and correspond that remain pretty much unaddressed and the frustration and aggravation to taxpayers who really want to do the right thing. and are unable to. that is my comment. i wish you well. >> i agree with you 100% that the need for comprehensive tax reform. in past annual reports that has been the number one most serious problem for taxpayers. i have testified before any number of panels, president bush's panel on tax reform and on and on about the need.
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on my website, we have a place where people can make tax reform suggestions because i felt taxpayers themselves really have a sense of what -- we asked them what benefit tax benefit would you be willing to give up in exchange for a more simple tax code and what do you think is really unfair of the tax code? sort of two questions that get to the heart of it. i would make a comment about the flat tax. i don't think it gets rid of the irs, with the flat tax someone will have to collect it. there has to be a collection mechanism so there is someone or some agency that will be around whether you replace it with value added tax or just have a flat rate proportional -- i will note that most of the provisions really are not flat because they give an exemption -- they might say the first $20,000, a first $50,000. the minute you have entered
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an exemption rate you have something that's not a flat tax. there are two rates in that at least. but something that is far simpler and i think what most people are saying is get rid of the deductions and exemptions in the code. once you do that, you have to be willing to give up your mortgage deduction and local sales and use tax deduction or property tax deduction or have your health insurance premiums that are paid by your employer taxed or have your tax sheltered retirement savings taxed. those are big questions that so far there has not been any political will to address. >> we have howard from new jersey on the independent line. hey, howard. >> hi. i have a solution to your problem. you can hire all the people you
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want in the irs reduce the compensation that all public employees get. especially their benefits, their -- they are way out of line what the private sector gets. nothing like the private sector, you get in trouble and cannot provide services, you reduce pay -- that is here in new jersey which is a very high tax state it would solve your problems and have all the people you need to answer the phones and i wonder what the woman's background on the show today, i wonder -- does she work for the government? did she come up in the private sector? i wonder what these lobbyists backgrounds are? >> two pieces. howard's ideas. >> federal employees are paid on a government pay scale that
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congress and office of personnel management have designed and tlfb many many panels and commissions that have looked at the pay of civil service employees. i think that the findings are varying. they find that at the lower pay scale, grade levels of the federal workforce that the benefits are much higher and the pay is higher than at the higher levels of the pay scale compared to the private sector. i would also say that for every study that says that there is another one that says the opposite so i personally do not have a position. those decisions are made by congress and the executive branch. as far as my background, i started preparing tax returns as a soul proprietor in 1975. and my clients were small business and, you know
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individuals. i did return preparation for about 18 years while going to law school at night and raised my son and kept my tax preparation business afloat. in 1992 i created a nonprofit that was the first low income taxpayer front in the country serving low income taxpayers who had disputes with the irs. the first nonprofit low taxpayer. it wasn't affiliated with the law school and i funded that nonprofit and volunteered my own time until he could get on my own two feet. i worked there for eight years continuing my private practice until i was appointed as a secretary of treasury. as the national taxpayer advocate. i'm not a lobbyist. the internal revenue code charges me to speak up and be the voice inside the irs. i am inside the irs. my agency by law is separate
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and independent from the irs. i also need to make this point. by law, the person who serves as a national taxpayer advocate cannot serve or work for the irs for two for years before taking the position and five years after taking. i have no career path inside the irs. once i finish this job, i am out of their. i try to maintain my independence and i think i do a fairly good job. >> when does your term of service end? >> i have no term of service, i serve at the pleasure of the secretary, i served the democratic and republican administrations. >> we have about half an hour left. maybe a little bit more with our guest nina olson. the annual report to congress is right here and folks can get
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this where? >> they can get it online, there is a whole page dedicated to it. it is a lengthy volume. we have an executive summary that summarizes >> you dedicated the report to dave camp who retired from congress. tell us why. >> congressman camp, from the very beginnings, announced that tax reform would be a major focus. what he put forward this year and his tax reform bill was really a movement for the need for comprehensive tax reform. it had legislative language. it was a starting point in a conversation that should've been picked up by democrats and republicans. any bill that comes out first is going to be modified. i really viewed chairman camp's the equivalent of something that
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happened in 1984 1985 when treasury put out the blueprint for tax reform which came after several years of going back and forth in revisioning. the 1986 tax reform act -- that was really the last tax reform act that brought some publication to the code. we are in desperate need of that. i thought it was a heroic effort on his part to start the dialogue running. >> quincy from chicago, illinois. democrat. >> hi there. >> fine. how are you doing >> i'm fine. >> the reason i'm calling is because i'm 70 years old. i worked for 40 years. the irs has been taking -- all i receive is a social security check each month which is not a whole lot. they've been taking $300 a month from my checks in the past three years. i'm really upset about that. this is all i have to live on. i can barely make it.
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i'm waiting and waiting and waiting on the phone. it is because of some kind of tax conflict i have three years ago. $300 a month from my social security check. i paid in a lot of money in my 40 years of work. i worked no iv years before i retired. >> your story breaks my heart. i'm going to give you some advice in a way to get some help. here's what you need to do. you need to call my organization -- the taxpayer advocate service. we have an office -- at least one office in every single state. that is required by law. my employees are there to help you. this $300 a month coming out of your check is causing a significant hardship.
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the phone number is 1-877-ask-tas1. 1-877-ask-tas1. you will get someone from my office who will take the canes. we will assign a case advocate to help you and you will have that one person's direct line on their desk to get through to them. let me tell you what this program is which i've really disagreed with for years and have written a lot of about. i tried to get congress to act on it. congress authorized the irs to take 15% of social security benefits monthly if a person has a tax debt. i am trying to institute a low
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income filter so that persons who rely primarily on social security will not have this 15% taken away from them. if you have a back tax debt, you may not. your case advocate when you call that number will help you figure out what that is. the background problem. you also get a release of the levy because it is causing you economic hardship in getting your $300 back. what you may also try -- if you have been trying to talk to the irs all this time, we can look at the records and see if we can get some of the money that has been levied on you already. that has caused you and economic hardship back to you. this is a very serious problem and i very serious concerns about this program. i've written about it for the last seven or eight years and made legislative recommendations to fix it. so far have not been able to get purchase on this. >> we have brenda. thank you for waiting.
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from tallahassee, florida. >> yes. this is brenda. my question s-illegal aliens will be made legal by obama as long as they pay their tax. these people more than likely will earn less than 25,000 annually. will they qualify for tax credits? also how can this ever work since it's other taxpayers who pay for these credits? i'll take your answer off the air. >> thanks, brenda. >> undocumented people -- or i'm going to say it this way. anyone who resides in the united states for over 365 days on average over the last three years -- it is a very complex formula. or if they have a green card and are committed to reside in the united states is taxable under
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the internal revenue code under worldwide income. we are the only country -- there may be one other in the entire world that has that approach to taxation. whether you are here legally or illegally, you have an obligation to file and pay your taxes. that is a bedrock of the internal revenue code as the congress wrote it and the irs administers it. they can get and i-10 so they can file their income tax returns today. if they have and i-10, they are not eligible for the earned income tax credit and they are generally not eligible for a lot of other credits because those are limited to persons who have social security numbers. it is not clear to me under the administration's proposal whether folks who come in under the new program, the program
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that the administration is proposing would they get a social security number or not. if they got a social security number and authorized to work then they would be eligible for the various credits unless congress acted to bar that. in terms of who is paying for what -- all the social programs that are run through the code are no different than direct spending programs. they are no different from welfare or food stamps or military authorizations or grants to communities for floods or disasters or infrastructure or anything like that. they are the equivalent of direct spending programs. they are called "tax expenditures." for any spending, it is for all the taxpayers who are paying for it. you really do not want the irs in that conversation. that is a conversation between you and the administration and
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congress to decide what as a populist you want tax dollars ascribed to. you do not what the irs ignoring it and picking and choosing what it chooses to administer. >> one tweet for nina olson. do you see evidence that the irs is acting to further the political agenda of the obama administration or any politician? >> it is hard not to have the appearance of being politically involved. congress passed the affordable care act and we have a duty to administer it as best as we can. some may view that as furthering the obama administration agenda. i would say it is in the internal revenue code so we have to administer it. there has been controversy of the irs' scrutiny of political organizations.
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i am not conducting an investigation of it. there are six congressional investigations going on and they have subpoena power and they will publish their reports about what their findings are. >> this question points out that congress cut irs funding in december. does that mean irs will go after people fraud but not the complicated nonprofit and for-profit fraud? >> i do think the irs will do whatever it can through automation. that means that we will probably miss a lot of things. i am very concerned about that. i will also say that it would be very hard for people to be able to communicate with the irs during audits. we do a lot by correspondence and that is not the best way to do an audit. you often get wrong answers.
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taxpayers have to appeal it and go to tax court to get the right answer. that is a burden on the taxpayer. i do think that there is a lot that the irs can do to identify the right places to audit and have the most indirect effect of those audits. it needs to really improve its auditing. >> let us hear from trudy now. somerville, south carolina. trudy is a democratic caller. welcome. >> thank you. speaking of political lines, it seems to me that the cut in the irs funds is a result of the republican congress due to the loud squawking of the tea party. that stands for taxed enough already. if i were irs agent, i would take a look at people's tax reforms of members of the tea party. thank you.
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>> some of these cuts -- the irs budget increased from 2005 to 2010. decline since 2010. some of that has been directly attributable to the sequestration that impacted the entire government. the problem has been that on top of sequestration, we have had these cuts. it is very clear that a lot of what has driven the most recent cuts is the distrust of the irs on the part of many people in congress and certainly many people in the united states as far as what happened. i think it is a very difficult one. the law is very unclear. the law says that these organizations have to be exclusively organized through social welfare which would imply
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that they can do nothing else except social welfare. the united states supreme court said that you could basically have an insubstantial not exempt purpose. so clearly something less than 100%. it is not really clear what is that threshold amount of political activity that you can do and still qualify as a tax-exempt social welfare organization. because folks have been organizing, which is their right and i and encourage that, the irs has had to look closely. the problem as i see it is that employees were not given guidance over a year and a half about how they were supposed to look at these organizations and they held these entities for very long periods of time. they didn't get the scrutiny because they did have the
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guidance -- did not have the guidance. i think that stinks to high heaven. i understand the outrage. my point is that it is a small part of the work of the irs does. it affects the 150 million taxpayers and enforcement on a day-to-day basis. that is being harmed because of where we are and that budget. >> if you missed the earlier part of that segment, we read from the report talking about budget cuts and delays in service. this report says that 35.6% of phone calls went unanswered by customer service representatives. 50% of pieces of correspondence were not handled timely. virtually, zero tax returns were prepared by irs walk-in sites. on and on lots of other statistics.
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i meant to ask you are some parts of the country more affected than others by these cuts? >> one of the things that we did in this report was took a look at the irs local presence. they have been accumulating people to several large service centers that are scattered throughout the country. the actual physical presence of irs employees in a geographical accounts has shrunk enormously. there are today 13 states that have no human being responsible for reaching out to the small business and self-employed population and educating them and helping them not get into trouble on the enforcement side. that is a quarter of the states in the united states. that is astonishing to me. there are 12 states that do not have appeals officers or appeals officer that deals with
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collection issues in the state. why that is important is because every state is different and its economy. some states have an economic downturn attributable to another's kind of disaster. other states -- the commodity that they are working with the most has gone under. like coal goes under. each states have their own culture. taxpayers will not be served and the people that are trying to help them may not understand the economic and geographic conditions that they are facing and why they won't be able to pay their tax bills. that is why congress said as a taxpayer advocate service, my 1900 employees have to have at least one office in each state. there's at least some office that understands. and my report, we pointed out
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that the irs has to get back to a geographic presence to understand the taxpayers. that in the long run is much more effective. we highlighted the report wyoming, which is not a populous state, but a large state geographically. then we looked at the city of the number of tax papers -- taxpayers and those locales increased significantly i doubled agents. -- by double digits. in one instance, irs presence decreased, and one instance, by 15%. that is a recipe for disaster going forward. he will not have people understand conditions on the ground. >> we go to fort lauderdale,
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florida now. independent caller, mark. hi there. >> hi. good morning to both of you. >> i've seen miss olson a couple of times on your show. i guess she shows up there once a year during tax season. what seems to be not focused on enough is her actual office of taxpayer advocate. at the turn of the millennia, i had problems with the irs. due to a crummy employer i had that didn't send in the tax like they were supposed to. the irs held up a sizable chunk of refund for me. the taxpayer advocate got that money back for me with interest. it took several years. i think it's a shame when this lady shows up she gets all these political questions, people
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saying how much they hate the irs and we have to have a flat tax. this is an opportunity to learn about her particular department and what it can do for people like us. it is unfortunate in a situation where they cut the budget. maybe i wouldn't have the same experience i had 12, 15 years. i hope that's not the case. i do not know if you can screen the calls better or people should realize not to look at this lady as just being a general representative of the irs when she is on your show. she has a really useful office and a useful purpose there. i owe them thanks. so, basically that is what i wanted to do. >> thank you for calling. what is the job? >> i really appreciate the caller calling in and saying that. and i run the taxpayer advocate service. we have about 1900 employees. we have 74 offices around the
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united states, at least one in every state. and some of the most populace states, more than one. they have spared my office is some of the budget cuts. we have helped taxpayers who have had significant hardship. that means, if the irs is not doing something, like in the gentleman's case where the irs was not getting his refund, something that the iris is not doing -- we tried a work through the process and get the issue resolved. that is a systemic problem. we assign a case advocate and have a toll-free advocate extension to call. we get up to 3000 cases a year.
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you do get one person who sticks with you through the whole process. as the caller said, it sometimes takes years to get things resolved. we also have issues that involve multiple parts of the irs. i do have a very important tool that congress gave us which is a taxpayer assistance order. that allows me to order the irs to stop doing something, do something, or not do something that it is about to do. we can order them to do it within a certain amount of time. if they do not agree, they can appeal it. once it is appealed all the way to the commissioner and it lands on my desk --, only the deputy commissioner can overturn it. even there i get the last word. congress mandated in my annual reports to congress i tell them
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about any taxpayer assistance order that i've issued that the irs has not complied with. if congress doesn't like the results they can intervene. what we are seeing is that some of these issues are very difficult. my own employees are having a hard time finding the right irs employee. irs training has been cut by 83% since 2010. whereas in 2000 -- 2010 or so, they were spending $1700 on training per employee, they are now spending $373 or something in that range. we're finding people in the irs saying that this needs to be done and that we do not know how to do it. i'm seeing more and more of that. >> we have a few more calls in here.
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carrie from arlington, virginia. >> i think there's more to tell of of the irs does and how people complicate things by filing papers for foundations. there's 29 categories of nonprofits that people qualify under. the people at the irs rely on the documents that they are given and they are considered truthful until someone comes along and says it is not a real foundation. the irs has a program for which people can provide information on. for all these false foundations or these foundations that have failed to file, that are pulled away from the system, that frees up manpower. there are good people working at the irs. >> thanks. nina olson?
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>> i thoroughly agree. and some ways, what is sad about that sample is that there is a very's mall unit of the irs and that there are very few and flurries involved in it. there are 82,000 other employees that are working on lots of things that impact taxpayers every single day, including trying to get to taxpayers even in this environment. >> we have mark from huntsville, alabama. independent caller. hey, mark. >> good morning. i've two questions real quick. i think. in 2014 i was working but never had insurance. my employer didn't provide insurance. i went through a navigator for and they walked me through it.
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i cannot find a plan that i could afford. i didn't have health insurance in 2014. >> until the exchange is dwen, it's an evaluation of whether you do have a harsh effect. the plan that was available to you, you know, was above your ability to afford. and so that was built into the law.
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and you really should look into that today or this week and that gives your application for march. and when you go to file your return, you can go and right that on and it will be adequate. >> >>. >> how do programs like turbo tax affect it? >> it has affected the change. we used to have to do coding of the paper returns. now, all of the electronic filing, the more we get electronic filing, fewer people are reviewing the answers for mistakes and things like that. we do have a vast majority of people filing electronically. and one thing about turbotax, there's a ritlelittle unintended consequences that mayke filing easy.
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we've lost the reality of just how complex. >> democratic caller, hi, there. >> caller: good morning. i'm pleased with the work she does. i would think if she really wants to advocate for us poox e taxpayers, what we should do is make it so we could call them. i had a problem with irs and i could not reach them by phone. i'm a disabled person and it took almost 7 hours to see someone. when it went in i told the irs that this was fraudulent. i did not file it. i've been disabled since '97. they said okay, and would take
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it under advisemented. in three weeks, got a check from them for the full amount plus the interest, which i returned. i went down and told these people it was fraud proved with three different kinds of identification that it was me and they told me to disz regard it. they gave me the interest due on i wanted, as well. the fact that you have people that are just incompetent and we can find find them, maybe the others would actually do their work. and i'd like to see you add voevocate for that and tell people the good work that you do. >> first of all, i'm really sorry that you had to go through that experience. again, that's a good opportunity to call the taxpayer add voevocate services if something like that happens because then we can -- your case add voevocate is supposed to monitor the acount and make
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sure fraudulent refunds don't go out. a lot of people are trifling to solve the problem. i have felt for a long time, and in this annual report, i actually recommend it the irs thinks it's more efficient to let things go. like the next available assister will help you. and there's just some areas -- every time you talk, you actually get a different person. and there's just some areas where you need to assign work to one person and hold them acountable. that would be the kind of thing you've got there. it's very much one of the first things you should do is basically put a marker on the acount when you've come in to make sure that no erroneous refunds go out. that you just stop that right then and there. and it would be very hard to trace back who is the person who intake -- took in your concern and didn't e didn't do that. i can point the finger in my own organization because people are assigned to a case and i know who's doing what on what. and i've encouraged the irs and recommended it.
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and? this year's report asked congress to hold ifthe irs accountable for doing that. hey, you're waiting so long right now already, what's a little bit longer if you've got somebody who's accountable for the decisions that are being made? >> one more caller. >> caller: hello. >> good morning. >> caller: good morning. i need to report someone who has not filed a tax form. a tax -- you know what i'm talking about. >> right. please don't give that person's name out online. >> caller: right. >> okay. >> caller: i need a person that i can contact in the office. >> okay. so you can call our 877 number that we gave out, ask 877-askt 877-askpask1. we can refer you to the criminal
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investigation unit. tell them you called c-span and i told you to call them, and, for everybody who's calling, you can say you heard me on c-span and that will help. >> our guest has been nina olson, the national taxpayer advocate. appreciate your time this morning. >> thank you. >> on the next kwt wa"washington journal" discusses his bill to change the process of investigating any death of a citizen by the police. then, generalny beth martin is here to disz cuss the influence of the tea party heading into the 2016 president shl e lebss. washington washington washington washington george journal is live every morning.
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>> as a result of the winter storm that's occurring in the north east region of the country, world e roll call votes were postponed today in the house on a series of bills aimed at limiting human trafficking. the schedule change has also led to a border security bill being pulled from the agenda later this week. instead, members will consider more bills on human trafficking and legislation that would expedite natural gas exports. the senate today went forward. senators will continue debate on the legislation when they return tomorrow at 11:00 a.m.'s tern. the senate you can see live on c-span2.
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>> here are a few of the comments we recently received on the state of the union address. >> caller: i heard a lot of great things talking about science and nasa. and, as a scientist myself i can really aappreciate the president's decision on expanding nasa's role. i know there's a lot of really good people who do siechx. i'm excited to look at the future instead of the past. >> caller: a couple points i wanted to raise tonight. i thought the comment to the republicans was really, really spectacular. i haven't seen a state of the union be so imp ro veezised for a really, really long time. we're finally getting our act together in opening trade with a nation that's been really important in our hemisphere within inception. but the same thing that can be linked to foreign policy is the fact that we've been doing the
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same thing in afghanistan and iraq. every ten years, we go into a country and then, you know there's a repercussion, so kind of blow back, the c.i.a. talks about it. he even mentioned how he was using drones responsibly and the idea he's killed hundreds, if not thousands of people, without congressional authority. >> caller: i've got a few things. i've seen a few things about the president's state of the union address. some of the stuff that's been leading up to it, i've got to argue the opposite. they've said unemployment has gone down, the economy is improving. i don't think that's the case. people have to remember, with unemployment, you can only have your extension for so long then you don't qualify for unemployment benefits. so when those people get dropped from unemployment, then they're no longer counted as unemployed. that's not really an indicator of the economy going up.
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that's just people falling through the cracks and being forgot about. if you look at it from that perspective, the rate of unemployment in this country is probably 10 point something higher than what it's actually beingest mated as as far as the figures of what they're showing. >> continue to let us know what you think about the programs you're watching. call us at 202-626-3400. e-mail us at join the c-span conversation like us on facebook, follow us on twitter. >> next, a look at the budget scoring process with economists and tax policy experts. they disz cusscuss the government's procedure for drafting a budget and the steps taken to make budget figures and other information easy to access. this was hosted by the brookings institution. it's just over two hours.
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>> for those of us who have been in washington for a while feels a little bit like this person will say this and then this person will say the predictable thing and then marty sul van will say this and bob mcintyre will say that. so we'll probably have a little of that today. but our goal today was to move a little bit beyond the conversation about whether dynamic scoring is either the best thing to ever happen to washington or the worst thing to ever happen to washington.
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and, instead, to focus a little more on what is it actually mean and how do you do it. what we're going to focus on today is skpaktly how it would be done. what assumptions you'd have to make. what are the challenges that the jct and the cbo staff face in doing it. how can it be best presented so
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that members of congress and the rest of us have a clue as to what the analysis does. so this is a bit of an experiment. and, moving beyond the basic pissing context in washington to look at a little bit of facts and information. let's look at how we're going to do this today. i'm going to start i'm going to moderate a conversation about the big picture len is now the director of the tax policy center. and he also was the -- deputy assistant secretary for tax analysis in the treasury in the late clinton years and has also worked at cbo. doug holtz heaken was the director of cbo from february,2003 to december, 2005. so both of them have grappled with these issues, firsthand. following that, we're going to turn to something we're very pleased to have a presentation by the staff of the joint tax committee on how they actually
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look at how they do this and the mechanics, followed by a discussion that my colleague, bill gail, who's one of the co-directors, who is the co-director will moderate. and then, following that, and you can't leave before the last event, we're going to talk -- i'm going to talk with donald maren and steve mcmillen about the application of dynamic scoring to bills other than tax bills, which is also required in certain circumstances by the new house rool. so, with that let me invite len and doug to come up and we'll get started. >> i should mention if we can keep this on time, we're going to have questions after each of the three panels. and, in case you didn't notice there's tv cameras in the back. one is for our web cast, there's
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people watching this live and it will be archive on our web site. and the other is c-span. and we also have on our web site a little annotated bibliography that my colleague made that has references to the official documents of the act and cbo on this as well as things that have been written by each of the people who we have as panelists today. thank you for being here. doug, i want to start with you. i wonder if you could describe to us a little what was going through your mind when you were at cbo and you decided it was appropriate to do a dynamic skeer, that is to factor in the economic effects of the president's budget and what did you learn from the exercise? >> so it started actually prior to my arrival at cbo. it became pretty clear during the selection process that this was spg that was important to the members both sides of the aisle. both sides of the congress.
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as a matter of principles, you want to look br e before and after and everything in between. it seemed to me that the president's budget was the ideal place to do it because it's the most fully specified single set of policy initiatives. so that seemed like the right thing to do. it also gave you the right comparison. every president's budget is dynamically scored. if you read them, this president, bush, clinton, it always says these numbers are contingent on the president's plan.
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so that was comparison in my view. that was something that was pretty uncharted. i don't think you should think of those as anything other than guidance. you have to use the models for some help. but you never have anything in the model that the congress or the president imposes. those things are incredibly clever. how do you present the results? how do you communicate on them? there, i thought, you know we got a really, really solid f. at that time there were some tax cuts that had some fairly straight forward supply growths.
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and then there was the medicare prescription drug bill. i thought the con would conclude that, gee it's not a good idea to offset growth policy with this big, new spending program instead of the we did it wrong. that was it. >> so it seems obvious that congress should consider the macroeconomic effects when it's considering a major piece of tax legislation or spending legislation. so one of the pros and cons that are folding the official score, whether it's the particular piece of legislation that will come ply with some reconciliation or some other target. the con is that there's so many cases that actually have no idea.
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a lot of the cases don't even know the sign of the effect. there's the models, themselves are these kind of stylize edd general equilibrium models which means basically, they're trying to account in a very kind of aggregate way how, say capital and labor affect the economy and how taxes on capital labor affect investment and work effort. those are always bassed on estimate e mats that are themselves, very uncertain.
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we have data compiled by consumer finances on how much assets, how much capital gains have in their portfolios. we can calculate ruffly what the revenue might be. first of all, we know it would raise revenue at least before -- in that case i think it would raise revenue certainly before including any kind of macroeconomic effects. and then if you were to apply dynamic scoring to that that issue, they're in the models. they'll say we're cutting the tax rate -- we're raising the tax rate on capital. there will be less saving, less investment. that would hurt economic growth. in the real world, what we're doing is we're raising the tax rate on capital. but we're also removing the
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single biggest loophole in the individual income tax which results in a huge amount of unproductive tax sheltering. we don't have a good idea of how important that is. in this case, there are people who believe really, really fervently that is going to be one answer or the other answer that there will be an enormous pressure on estimators in that case. they did an analysis after it was done. that was a policy which all 06 us working on tax reform are convinced that it's good for growth.
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the net effect was probably zero but it's really hard to tell. >> presume fwli, that gives jct the right and responseblety to say we don't know. if we had to wait until we have perfect knowledge before we use these things,that seems like an unreasonable standard. i just looked down at my notes.


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