[House Report 114-501]
[From the U.S. Government Publishing Office]
114th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 114-501
======================================================================
TO IMPOSE A BAN ON THE PAYMENT OF BONUSES TO EMPLOYEES OF THE INTERNAL
REVENUE SERVICE UNTIL THE SECRETARY OF THE TREASURY DEVELOPS AND
IMPLEMENTS A COMPREHENSIVE CUSTOMER SERVICE STRATEGY
_______
April 18, 2016.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Brady of Texas, from the Committee on Ways and Means, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 4890]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 4890) to impose a ban on the payment of bonuses to
employees of the Internal Revenue Service until the Secretary
of the Treasury develops and implements a comprehensive
customer service strategy, having considered the same, report
favorably thereon with an amendment and recommend that the bill
as amended do pass.
CONTENTS
Page
I. SUMMARY AND BACKGROUND...........................................2
A. Purpose and Summary................................. 2
B. Background and Need for Legislation................. 2
C. Legislative History................................. 3
II. EXPLANATION OF THE BILL..........................................3
III. VOTES OF THE COMMITTEE...........................................4
IV. BUDGET EFFECTS OF THE BILL.......................................5
A. Committee Estimate of Budgetary Effects............. 5
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority...................... 5
C. Cost Estimate Prepared by the Congressional Budget
Office............................................. 6
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE.......7
A. Committee Oversight Findings and Recommendations.... 7
B. Statement of General Performance Goals and
Objectives......................................... 7
C. Information Relating to Unfunded Mandates........... 7
D. Applicability of House Rule XXI 5(b)................ 7
E. Tax Complexity Analysis............................. 7
F. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits............................ 8
G. Duplication of Federal Programs..................... 8
H. Disclosure of Directed Rule Makings................. 8
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED............8
VII. DISSENTING VIEWS.................................................9
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. BAN ON IRS BONUSES UNTIL IRS DEVELOPS COMPREHENSIVE CUSTOMER
SERVICE STRATEGY.
(a) In General.--The Secretary of the Treasury, and the Secretary's
delegate, may not pay a bonus, award, or similar cash payment to any
employee of the Internal Revenue Service until the Secretary, or the
Secretary's delegate, develops and submits to Congress a comprehensive
customer service strategy that has been reviewed and approved by the
Treasury Inspector General for Tax Administration. Such strategy shall
include--
(1) appropriate telephone and correspondence levels of
service, which shall be based on service provided by the best
in business and customer expectations;
(2) a thorough assessment of which services the Internal
Revenue Service can shift to self-service options; and
(3) proposals to improve customer service in the short term
(the current and following fiscal year), medium term
(approximately three to five fiscal years), and long term
(approximately ten fiscal years).
(b) Progress Reports.--The Secretary of the Treasury, or the
Secretary's delegate, shall submit reports to the Congress on the
status of its customer service strategy and actions taken to improve
customer service. Such reports shall be submitted on a semiannual basis
until the comprehensive customer service strategy under subsection (a)
is fully implemented.
SEC. 2. NO ADDITIONAL FUNDS AUTHORIZED.
No additional funds are authorized to be appropriated or otherwise
made available to carry out the requirements of this Act. Such
requirements shall be carried out using amounts otherwise authorized to
be appropriated or made available.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
H.R. 4890, reported by the Committee on Ways and Means,
prohibits the Internal Revenue Service (IRS) from paying
bonuses to any employee until the agency creates and submits to
Congress a comprehensive strategy to improve customer service.
The bill also requires the IRS to submit semiannual reports to
Congress on its progress in implementing the strategy.
B. Background and Need for Legislation
The IRS has a responsibility to provide assistance to
taxpayers who endeavor to meet their tax filing obligations.
The U.S. Government Accountability Office (GAO), however, has
reported that the IRS does not have a comprehensive customer-
service strategy to ensure that the agency is providing
effective and efficient service to American taxpayers.\1\ The
IRS' mission statement is to ``provide America's taxpayers top
quality service by helping them understand and meet their tax
responsibilities.'' Since Federal tax administration relies on
voluntary compliance, it is extremely important that all
Americans have access to competent assistance from the IRS.
However, the IRS' level of service for fiscal year 2015 was
unacceptably low. In a review conducted by the U.S. Government
Accountability Office (GAO), the IRS' level of telephone
service in fiscal year 2015 was the lowest in years, with only
38 percent of callers wanting to speak to an IRS representative
able to reach one.\2\ Additionally, the GAO found that wait
times were more than 30 minutes, more than ten minutes longer
than in fiscal year 2014.\3\ H.R. 4890 requires the IRS to
develop and submit to Congress the comprehensive customer-
service strategy to determine appropriate levels of service as
recommended by the GAO.
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\1\2015 Tax Filing Season: Deteriorating Taxpayer Service
Underscores Need for a Comprehensive Strategy and Process Efficiencies.
GAO-16-151, available at: http://www.gao.gov/assets/680/674248.pdf.
\2\Ibid.
\3\Ibid.
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C. Legislative History
Background
H.R. 4890 was introduced on April 11, 2016, and was
referred to the Committee on Ways and Means.
Committee action
The Committee on Ways and Means marked up H.R. 4890, To
impose a ban on the payment of bonuses to employees of the
Internal Revenue Service until the Secretary of the Treasury
develops and implements a comprehensive customer service
strategy, on April 13, 2016, and ordered the bill, as amended,
favorably reported (with a quorum being present).
Committee hearings
The need for improved taxpayer service by the IRS was
discussed at an Oversight Subcommittee hearing on the 2015 Tax
Filing Season (April 22, 2015).
II. EXPLANATION OF THE BILL
A. Ban on Payment of Bonuses to Employees of the Internal Revenue
Service Until the Secretary of the Treasury Develops and Implements a
Comprehensive Customer Service Strategy
PRESENT LAW
The Code\4\ provides that the Commissioner of the Internal
Revenue Service (``the Commissioner'') has such duties and
powers as prescribed by the Secretary. Unless otherwise
specified by the Secretary, such duties and powers include the
power to administer, manage, conduct, direct, and supervise the
execution and application of the internal revenue laws or
related statutes. In executing these duties, the Commissioner
depends upon strategic plans that prioritize goals and manage
its resources. In the current strategic plan, the delivery of
high quality and timely service to reduce taxpayer burden and
encourage compliance is identified as Goal I.\5\
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\4\Sec. 7803(a).
\5\See Internal Revenue Service Strategic Plan FY2014-2017,
Publication 3744 (Rev. 6-2014), available at https://www.irs.gov/pub/
irs-pdf/p3744.pdf.
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The Commissioner is also authorized to employ such persons
as the Commissioner deems proper for the administration and
enforcement of the internal revenue laws and is required to
issue all necessary directions, instructions, orders, and rules
applicable to such persons,\6\ including determination and
designation of posts of duty. Compensation to employees of the
Internal Revenue Service is generally paid in accordance with
the rules governing Federal employment generally.\7\
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\6\Sec. 7804.
\7\Part III of Title 5 of the United States Code prescribes rules
for Federal employment, including employment, retention, and management
and employee issues.
---------------------------------------------------------------------------
REASONS FOR CHANGE
During recent tax filing seasons, the level of IRS customer
service has resulted in few taxpayers able to obtain telephone
assistance when needed, often waiting over one-half hour to
speak with a customer service representative. During the same
years, the IRS devoted substantial amounts of its budget to
employee awards and bonuses. The Committee believes that the
IRS must develop a long-term strategic plan for identifying the
types of service the public needs and for implementing such
plan before additional spending on bonuses and employee awards
is permitted.
EXPLANATION OF PROVISION
The provision bars payment of any bonus, award or other
similar cash payment to any employee of the Internal Revenue
Service until the Secretary or his delegate develops a
comprehensive strategy for customer service and submits such
plan to Congress. The plan must determine appropriate levels of
telephone and correspondence service, based on best practices
of businesses and customer expectations. In addition, the
provision requires that all services be assessed to determine
those which may be provided by offering self-service operations
to taxpayers. The plan must include proposals for long-term
improvements over the next ten fiscal years, with appropriate
short-term and mid-term goals.
The ban on employee bonuses remains in effect until a plan
is developed, reviewed and approved by the Treasury Inspector
General for Tax Administration, and submitted to Congress.
Until such plan for a comprehensive strategy for customer
service has been submitted to Congress and fully implemented,
the Secretary or his delegate is required to submit semiannual
reports on the status of efforts to develop and implement such
a plan.
No additional funds are authorized to be appropriated or
otherwise made available for development and implementation of
the plan.
EFFECTIVE DATE
The provision is effective on the date of enactment.
III. VOTES OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the vote of the Committee on Ways and Means in its
consideration of H.R. 4890, a bill to impose a ban on the
payment of bonuses to employees of the IRS until the Secretary
of the Treasury develops and implements a comprehensive
customer service strategy.
The Chairman's amendment in the nature of a substitute was
adopted by a voice vote (with a quorum being present).
The bill, H.R. 4890, as amended, was ordered favorably
reported to the House of Representatives by a roll call vote of
24 yeas to 15 nays (with a quorum being present).
----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Brady........................ X ....... ......... Mr. Levin.......... ....... X .........
Mr. Johnson...................... X ....... ......... Mr. Rangel......... ....... X .........
Mr. Nunes........................ X ....... ......... Mr. McDermott...... ....... X .........
Mr. Tiberi....................... X ....... ......... Mr. Lewis.......... ....... X .........
Mr. Reichert..................... X ....... ......... Mr. Neal........... ....... X .........
Mr. Boustany..................... X ....... ......... Mr. Becerra........ ....... X .........
Mr. Roskam....................... X ....... ......... Mr. Doggett........ ....... X .........
Mr. Price........................ X ....... ......... Mr. Thompson....... ....... X .........
Mr. Buchanan..................... X ....... ......... Mr. Larson......... ....... X .........
Mr. Smith (NE)................... X ....... ......... Mr. Blumenauer..... ....... X .........
Ms. Jenkins...................... X ....... ......... Mr. Kind........... ....... X .........
Mr. Paulsen...................... X ....... ......... Mr. Pascrell....... ....... X .........
Mr. Marchant..................... X ....... ......... Mr. Crowley........ ....... X .........
Mrs. Black....................... X ....... ......... Mr. Davis.......... ....... X .........
Mr. Reed......................... X ....... ......... Ms. Sanchez........ ....... X .........
Mr. Young........................ X
Mr. Kelly........................ X
Mr. Renacci...................... X
Mr. Meehan....................... X
Mrs. Noem........................ X
Mr. Holding...................... X
Mr. Smith (MO)................... X
Mr. Dold......................... X
Mr. Rice......................... X
----------------------------------------------------------------------------------------------------------------
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the effects on the budget of the bill, H.R. 4890, as
reported: The bill, as reported, is estimated to have no effect
on Federal fiscal year budget receipts for the period 2016-
2026.
Pursuant to clause 8 of rule XIII of the Rules of the House
of Representatives, the following statement is made by the
Joint Committee on Taxation with respect to the provisions of
the bill amending the Internal Revenue Code of 1986: The gross
budgetary effect (before incorporating macroeconomic effects)
in any fiscal year is less than 0.25 percent of the current
projected gross domestic product of the United States for that
fiscal year; therefore, the bill is not ``major legislation''
for purposes of requiring that the estimate include the
budgetary effects of changes in economic output, employment,
capital stock and other macroeconomic variables.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority. The
Committee further states that there are no new or increased tax
expenditures.
C. Cost Estimate Prepared by the Congressional Budget Office
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the CBO, the following statement by CBO is
provided.
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 18, 2016.
Hon. Kevin Brady,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 4890, a bill to
impose a ban on the payment of bonuses to employees of the
Internal Revenue Service until the Secretary of the Treasury
develops and implements a comprehensive customer service
strategy.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Keith Hall.
Enclosure.
H.R. 4890--A bill to impose a ban on the payment of bonuses to
employees of the Internal Revenue Service until the Secretary
of the Treasury develops and implements a comprehensive
customer service strategy
H.R. 4890 would prohibit the Internal Revenue Service (IRS)
from paying a bonus or cash award to any employee until the
agency develops and submits a comprehensive customer service
strategy to the Congress that has been reviewed and approved by
the Treasury Inspector General for Tax Administration (TIGTA).
The bill also would require the IRS to submit semiannual
reports to the Congress on its progress to complete the
strategy.
The current strategic plan for the IRS identifies as a
priority the delivery of quality and timely service to reduce
taxpayer burden and encourage tax compliance. However, CBO is
unaware of a comprehensive customer service strategy for the
IRS. Based on the cost of similar efforts, CBO estimates that
implementing H.R. 4890 would cost about $2 million in 2017 for
additional administrative and personnel costs to prepare the
required strategy; such spending would be subject to the
availability of appropriated funds.
CBO expects that TIGTA and the IRS would come to an
agreement about the comprehensive strategy that would allow the
IRS to continue to pay bonuses and cash awards. However, given
the independent relationship between TIGTA and the IRS the
timing of such an agreement is unclear. If the two agencies did
not come to an agreement personnel costs, which are subject to
appropriation, could be reduced by tens of millions of dollars
in 2017--less than 1 percent of projected spending for the IRS.
(The longer a prohibition on paying cash awards exists, the
more likely it becomes that decreased spending for such awards
would be offset by additional IRS spending for other
activities.)
Because enacting the bill would not affect direct spending
or revenues, pay-as-you-go procedures do not apply. CBO and the
staff of the Joint Committee on Taxation (JCT) estimate that
enacting H.R. 4890 would not increase net direct spending or
on-budget deficits in any of the four consecutive 10-year
periods beginning in 2027.
CBO and JCT have determined that the bill contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act.
The CBO staff contact for this estimate is Matthew
Pickford. The estimate was approved by H. Samuel Papenfuss,
Deputy Assistant Director for Budget Analysis.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives (relating to oversight findings),
the Committee advises that it was as a result of the
Committee's review of the provisions of H.R. 4890 that the
Committee concluded that it is appropriate to report the bill,
as amended, favorably to the House of Representatives with the
recommendation that the bill do pass.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill contains no measure that authorizes funding, so no
statement of general performance goals and objectives for which
any measure authorizes funding is required.
C. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
The Committee has determined that the bill contains no
unfunded mandate on the private sector, nor does it impose a
Federal intergovernmental mandate on State, local, or tribal
governments.
D. Applicability of House Rule XXI 5(b)
Rule XXI 5(b) of the Rules of the House of Representatives
provides, in part, that ``A bill or joint resolution,
amendment, or conference report carrying a Federal income tax
rate increase may not be considered as passed or agreed to
unless so determined by a vote of not less than three-fifths of
the Members voting, a quorum being present.'' The Committee has
carefully reviewed the bill and states that the bill does not
involve any Federal income tax rate increases within the
meaning of the rule.
E. Tax Complexity Analysis
Section 4022(b) of the Internal Revenue Service
Restructuring and Reform Act of 1998 (``IRS Reform Act'')
requires the staff of the Joint Committee on Taxation (in
consultation with the Internal Revenue Service and the Treasury
Department) to provide a tax complexity analysis. The
complexity analysis is required for all legislation reported by
the Senate Committee on Finance, the House Committee on Ways
and Means, or any committee of conference if the legislation
includes a provision that directly or indirectly amends the
Internal Revenue Code of 1986 and has widespread applicability
to individuals or small businesses.
Pursuant to clause 3(h)(1) of rule XIII of the Rules of the
House of Representatives, the staff of the Joint Committee on
Taxation has determined that a complexity analysis is not
required under section 4022(b) of the IRS Reform Act because
the bill contains no provisions that amend the Internal Revenue
Code of 1986 and that have ``widespread applicability'' to
individuals or small businesses, within the meaning of the
rule.
F. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
G. Duplication of Federal Programs
In compliance with Sec. 3(g)(2) of H. Res. 5 (114th
Congress), the Committee states that no provision of the bill
establishes or reauthorizes: (1) a program of the Federal
Government known to be duplicative of another Federal program,
(2) a program included in any report from the Government
Accountability Office to Congress pursuant to section 21 of
Public Law 111-139, or (3) a program related to a program
identified in the most recent Catalog of Federal Domestic
Assistance, published pursuant to the Federal Program
Information Act (Public Law 95-220, as amended by Public Law
98-169).
H. Disclosure of Directed Rule Makings
In compliance with Sec. 3(i) of H. Res. 5 (114th Congress),
the following statement is made concerning directed rule
makings: The Committee estimates that the bill requires no
directed rule makings within the meaning of such section.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
With respect to clause 3(e) of rule XIII of the Rules of
the House of Representatives, the bill, as reported, includes
no provisions proposing to repeal or amend an existing statute
or part thereof. Therefore, no additional materials otherwise
required to be included in this report or an accompanying
document under that clause are required to be included with
respect to this bill.
VII. DISSENTING VIEWS
We oppose H.R. 4890, which would impose a ban on the
payment of bonuses to IRS employees until the Secretary of the
Treasury develops and implements a comprehensive customer
service strategy.
It is true that IRS customer service levels have been poor
for the last several years. For example, only 38% of taxpayers
who tried to call the agency during FY15 were actually able to
reach a live IRS employee--and those who were able to get
through faced average wait times of over 30 minutes.
However, this abysmal customer service is a direct
consequence of the Majority's efforts to defund the IRS. IRS
funding has declined by approximately $1 billion since 2010. As
a result, the agency has been forced to cut 12,000 full-time
jobs, has reduced employee training, and has delayed critical
upgrades to information technology. Furthermore, the agency is
auditing fewer and fewer taxpayers, with less than 1% of
taxpayers being audited--the lowest level in a decade.
This is a dangerous level of underfunding for a critical
government agency that ensures our government has enough
revenue to function. We all benefit from the services and
revenue provided by a well-funded tax collection agency.
If the Majority would like improved customer service from
the IRS, then they should fully fund the agency. It is no
surprise that providing the IRS with an additional $290 million
for FY 2016 for customer service has led, thus far, to reduced
telephone wait times during this year's tax filing season. The
percentage of callers seeking and receiving live assistance
during this year's filing season has increased by 33 percentage
points to 76 percent--compared to 43 percent during the same
period last year.
H.R. 4890 is not the solution to the Majority's self-
created IRS customer service problem.
Sander M. Levin.
[all]