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Senate Finance Committee Hearing with IRS Commissioner Charles Rettig

Senate Finance Committee

“2020 Filing Season and IRS COVID-19 Recovery”

Wednesday, June 30, 2020

Witnesses

Opening Statements                   

Chairman Chuck Grassley (R-Iowa)

In his opening statement, Grassley praised the work of the Internal Revenue Service (IRS) throughout the COVID-19 pandemic, specifically noting the effort needed to distribute the economic impact payments. He stated that he is interested in learning more about the IRS’s progress in reopening physical facilities, clearing the backlog of taxpayer correspondence, and instituting the reforms laid out in the Taxpayer First Act.

Ranking Member Ron Wyden (D-Ore)

In his opening statement, Wyden repeatedly referenced the Commission on Treasury Inspector General for Tax Administration’s (TIGTA) report on auditing levels of wealthy individuals. He highlighted the fact that, according to the report, over a three-year period, the IRS failed to audit almost 900,000 wealthy taxpayers who did not file tax returns. He criticized budget cuts to the IRS and cited the importance of ensuring the IRS has adequate resources for enforcement personnel.

Testimony

The Honorable Charles Rettig, Commissioner, Internal Revenue Service

In his testimony, Rettig began by thanking all IRS employees for their work in facilitating critical financial assistance to millions of deserving Americans throughout the COVID-19 pandemic. He summarized the IRS’s modernization efforts as well as the implementation of the Taxpayer First Act and the IRS Integrated Business Modernization plan. He also provided an overview of the IRS’s efforts to provide relief to taxpayers, specifically noting the benefits of both the ongoing collaboration with the Social Security Administration and the Department of Veterans Affairs as well as the creation of the Non-Filer tool and Get My Payment tool in facilitating the prompt delivery of the economic impact payments. He concluded with a statement reinforcing that adequate funding is a prerequisite for building an IRS capable of fulfilling the requirements outlined under the Taxpayer First Act.

Question & Answer

Remote and Mobile Workforce Relief Act

Sen. John Thune (R-S.D.) took the opportunity to emphasize the importance of this bipartisan legislation stating that it would help address possible tax complications that remote workers could face as a result of the pandemic, including state withholding and nexus issues. In response, Rettig stated that he believes the IRS itself is having to confront many of these state tax withholding issues due to remote work.

Employer Retention Tax Credit (ERTC)

Sen. Mark Warner (D-Va.) advocated for his Paycheck Security Act while Sen. Steve Daines (R-Mont.) expressed support for expanding the credit. Sen. Ben Cardin (D-Md.) also commented in support of the ERTC and inquired as to what else the Senate can do to assist the IRS in this process. Rettig welcomed Senate collaboration and input.

Earned Income Tax Credit (EITC)

Sens. Michael Bennet (D-Colo.), Maria Cantwell (D-Wash.), Sherrod Brown (D-Ohio) and Grassley all discussed issues related to the EITC. Rettig emphasized that the processing of EITC claims is a priority, especially so as it relates to paper correspondence.

State and Local Funding & SMART Act

Sens. Bill Cassidy (R-La.) and Bob Menendez (D-N.J.) highlighted their SMART Act and the challenges currently facing local governments as a result of the COVID-19 pandemic.

U.S. Employees Overseas

Cassidy requested that the IRS issue formal guidance addressing issues facing U.S. employees who work for foreign corporations overseas. Rettig responded that this guidance would have to be a U.S. Treasury decision but that he would pass along the request.

Economic Impact Payments

Sens. Debbie Stabenow (D-Mich.), Rob Portman (R-Ohio), Maggie Hassan (D-N.H.), Catherine Cortez Masto (D-Nev.), Cardin and Grassley asked about those who failed to receive their correct owed amount, with certain senators noting that many Americans did not receive the additional $500 allocated for dependents. In response to a variety of questions on this subject, Rettig reiterated that the IRS has prioritized this issue and is looking to reissue the additional economic impact money this summer, possibly even in July.

For more information on this hearing, please click here.

For an archive of past SIFMA hearing coverage, please click here.