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Quigley Questions IRS Commissioner on LGBT Tax Filings

February 27, 2014

WASHINGTON – Today, U.S. Representative Mike Quigley (IL-05) used his time in the Appropriations Committee hearing to question Commissioner John Koskinen on the steps the Internal Revenue Service (IRS) is taking to help same-sex married couples file federal taxes.

"This tax season is historic for married same-sex couples in Illinois and across the country. Since the Defense of Marriage Act was overturned last year, this is the first time these couples are eligible to file federal taxes together. I want to ensure that IRS is prepared to assist LGBT couples with targeted information and resources to make the tax filing process as smooth as possible," said Rep. Quigley.

Transcript:

Rep. Mike Quigley: Welcome, Commissioner. In addition to everything else you have going with the IRS, this is a historic filing period. The Defense of Marriage Act was struck down last June by the Supreme Court, and so for the first time same-sex couples will be filing federal tax returns together. This is the first filing period where that will be taking place. What education within the IRS and outside of the IRS is taking place? How are you helping to educate the public and making resources available to people, particularly with some of the complexities involved? As you know, different states have different laws, and I have residents in my district and in my state who were married in Iowa, for example. Illinois is just now beginning to recognize same-sex marriages. So, what is the IRS doing to deal with these complexities?

IRS Commissioner Koskinen: Well, I think it's important. One of the things that did surprise me back there, Congressman Serrano's question, is the amount of outreach the IRS does as a general matter to taxpayers. We have a website, which if you look at it today, is a very different website than it was a year ago in the sense of trying to be more user friendly, provide information taxpayers need directly. We have wonderful relationships with tax preparers who actually advise, we give them information, we share information about what information their clients will need. We have a YouTube channel with over 100 instructional videos about what you should worry about. We just put out our first advice to taxpayers this week, about starting to look forward to how to deal with the Affordable Care Act, particularly advising taxpayers if their circumstances change during the year. They need to adjust whatever premium tax credit they're getting. So in the Defense of Marriage Act, we have been putting out reminders to people. We remind people when it's time to pay your estimated taxes. So there's a tremendous amount of time spent reaching out to taxpayers, trying to educate them as much as we can about the tax code, as I somewhat facetiously said, may take a while before I can convince people that we're from the IRS and we're here to help you, but we do spend a significant amount of time doing just what you're talking about, which is prior to the filing season, and during the filing season, to give people as much information as they can get. This year, for instance, we're advising people that, don't call if you need to find out about where your refund is. Go to the website, push the tab, and last year 250 million people got information about, quote, "Where's my refund?" This year for the first time you can go to the website, authenticate who you are, and you can get transcripts of your previous filings, and you can print them out at home. You don't have to come to an assistance center. You don't have to call. So it goes partially to the Chairman's concern, which I have, which is, we can't just sit around as say "Gee, what will we do?" We've spent a lot of time trying to say "What information do taxpayers need? What do they call about? How much of that could we give them in some other channel of communication?" And so, we have tweets, we do things that I don't know how to do.

Rep. Quigley: I mean, so you recognize these are unique circumstances. This is the first time in history this is taking place, and a lot of taxpayers need additional assistance. All the resources you are talking about are helping these new filings?

Comm. Koskinen: Right, and the people who are the phones have information about that, so if taxpayers call and get through, they will be able to get that kind of information. But it's on the website. We've tried proactively, in all of these areas, to get information out to taxpayers before they fill out returns, and even before they feel they have to call.

Rep. Quigley: We appreciate that. Your predecessor talked about the cases of identity theft. He said that there were nearly 250,000 reported to your agency in 2011, and 816,000 in 2012. Obviously this is an alarming increase. What are you attributing this to, and what is the agency doing?

Comm. Koskinen: It's been an explosion, since 2010, through actually last filing season, in terms of people either borrowing, stealing, going to the death master files, getting social security numbers, and filing false returns, and trying to get refunds early. We have spent time, I was talking to the Chairman earlier, spent time in Jacksonville, where the wonderful tax force that jointly between the IRS Criminal Investigation and state and local law enforcement in Jacksonville, and in Florida, have become much more aggressive at pursuing this. We've had last year 1,500 investigations up from 300 the year before. We have a substantially increased, sophisticated filter system that identifies suspicious returns as they're filed electronically. Last year we actually saw plateauing in the number of returns that came through that we were able to tax. So we think that between, we had 1000 indictments recommended last year, up from 165 2 years earlier, we think we're getting some of the people off the street. We're, I think, getting the message out that this is not a free game; it's not a free good, that you can't simply buy or steal a social security number and get a refund without being prosecuted for that. But it is a significant problem. We had in the budget proposed $100 million of IT work that was not included in the budget, but we're figuring in some other ways, and part of the $92 million additional funding provided was for just this purpose, and we're spending it that way. But it's going to be a problem we think we have under control. As I noted, we're able to resolve for taxpayers the identity theft problem much faster than we used to. But it's one of the 3 or 4 highest priorities we have in tax administration.