Statements on Introduced Bills and Joint Resolutions

Floor Speech

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Mr. GRASSLEY. Mr. President, I am pleased that my colleague, Finance Committee Ranking Member Wyden, will be joining me in introducing the Taxpayer First Act of 2019 later today. This legislation seeks to modernize the Internal Revenue Service, improve taxpayers' services, and strengthen taxpayer protections.

The package of IRS reforms we will introduce today is the culmination of years of work by both the Senate Finance Committee and the House Ways and Means Committee. It is truly a bipartisan package that adopts provisions authored by committee members on both sides of the aisle of the House and the Senate.

Former Chairman Hatch of Utah deserves a lot of credit for working to reach a bipartisan, bicameral agreement at the end of the last Congress, which is reflected in the legislation we will be introducing this afternoon.

I know Senator Hatch put a lot of work into trying to get this legislation across the finish line last year. Unfortunately, it wasn't meant to be, due to both political realities and, maybe, time constraints--even more so.

However, his work helped us get to where we are today. In other words, we are advancing a great deal of what Senator Hatch worked on, and our hope is that it will allow us to move quickly this year and finally get these commonsense reforms of the Internal Revenue Service enacted into law.

Some of the IRS reforms in this legislation include establishing a truly independent Office of Appeals within the Internal Revenue Service. This will help ensure the playing field is not tilted against taxpayers when those taxpayers are in dispute with the Internal Revenue Service.

To help bring the Internal Revenue Service into the 21st century, the legislation also would require the IRS to submit to Congress a plan to redesign the structure of the Agency to improve efficiency, enhance cyber security, and better meet taxpayer needs.

It also includes a number of provisions to protect the taxpayers better from tax ID theft and improve taxpayer interaction with the IRS, should they become a victim of that crime. This includes creating a single point of contact in the IRS to help the taxpayers navigate the bureaucracy and resolve their issues as quickly as possible.

To provide taxpayers with better protection against becoming such a victim in the first place, the legislation will expand to all taxpayers an IRS program that currently allows victims--and only victims--of tax ID theft to obtain a personalized PIN that better secures the identity of any taxpayer who asks for it.

The legislation also puts in place new safeguards to protect taxpayers against recent IRS enforcement abuses of so-called structuring laws. On several occasions, the IRS used these laws to seize bank accounts of small business owners when no underlying criminal activity was present. This includes seizing $33,000 from a small business owner who operated a small restaurant in Arnolds Park, IA, for nearly 40 years. The IRS--on a whim, taking $33,000 from that small business--caused the business to close, and the owner did nothing wrong in the end. Provisions in our bill will help ensure these types of abuses never occur again.

I would also like to note the improvements to the IRS whistleblower program that are contained in the bill.

In 2006, I authored legislation establishing a mandatory Internal Revenue Service whistleblower program. Since it was established, the IRS whistleblower program has turned into one of the most effective programs addressing tax evasion, leading to the recovery of more than $5 billion in taxes that otherwise would have been lost to fraud.

Unfortunately, too many IRS whistleblowers continue to be treated like a skunk at a picnic. They often wait for years, and while they are waiting for years, it is in the dark, with no indication of whether the information they provided to the IRS would ever lead to a successful recovery or whether their reward is even being processed.

Moreover, they are often putting their careers on the line, exposing corporate tax shelters with no protection should their employer decide to retaliate.

Provisions in our bill will help to address these issues by authorizing the IRS to communicate with whistleblowers, in certain instances, while protecting taxpayer privacy.

What we are really saying is this: You ought to let these whistleblowers, who are patriotic people, trying to help the Federal Government collect money that wouldn't otherwise be collected--treat them like the patriotic citizens they are.

The bill would also extend anti-retaliation provisions to IRS whistleblowers that are presently afforded to whistleblowers under other whistleblower laws--the False Claims Act, which I authored in 1986, as well as the more recent Sarbanes-Oxley Act, which came out of another committee that I didn't serve on.

Finally, the bill includes modifications to the private debt collection program. I have long been a proponent of this program as a way to tackle the tax gap and to promote tax fairness. It works by assigning certain tax debts, which the IRS otherwise would not attempt to collect, to an outside contractor to pursue.

In other words, if the IRS isn't going to go after all the money that is owed to the taxpayers--and we don't want $1 more than what people owe, but we want every dollar that people do owe--if they aren't going to go after it, we ought to find some way to go after it. That is why we have outside contractors pursuing some of these issues that the IRS isn't going to pursue.

Recent quarterly revenue reports demonstrate the program has the potential to bring in hundreds of millions of dollars in revenue on an annual basis.

I understand some of my colleagues, particularly on the House Ways and Means Committee, have been concerned that the program has been too heavily focused on lower income taxpayers. We listened to these concerns, and we worked to develop a sensible compromise while yet strengthening the long-term viability of this program.

These are just a few of the provisions in this bill. There are many others that will go a long way toward making the IRS work better for taxpayers.

I also know that some of my colleagues have additional ideas that we were unable to include in this package. I want them to know that I see this legislation as a first step toward reforming the IRS and strengthening taxpayers' protections.

I agree there is more that we can do. I am committed to evaluating additional proposals with input from all of our colleagues on reforms that could be included in a package of additional IRS reforms later this Congress.

But first things first. Companion legislation is being introduced in the House, which I hope the Senate will receive in the near future.

I ask all of my colleagues to join me and Ranking Member Wyden in supporting this bipartisan bill.

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