▶ 0:08:00The committee will come to order. Um, before I begin, I want to recognize that another one of our members will be leaving us at the end of this Congress. he is apparently seeking a a more deliberative, uh, slower slower pace of life, um, over in the Senate.
▶ 0:08:21And before you leave, we hope, uh, hope to remind you, um, and your future colleagues that all tax policy starts in this committee. Um, and so, Kevin Hern has been a valued member of this committee, um, a great friend. He's always bringing the values he learned growing up in the Ozarks, and as a businessman to the important work that we do.
▶ 0:08:51Um, we will we will definitely miss you and your McDonald's, greatly whenever you go to the other side of the building, but we know that we'll have an ally there as well. Thank you, Mr. Chairman. Thank you. Yeah. Thanks, uh, Chairman.
▶ 0:09:08I want to wish Kevin well, uh, in addition to, uh, what you've already offered, and, uh, I always recall that President Bush senior did point out that the US Senate was the only place that could actually slow down the aging process, as well. So, take take note of that. Uh, Kevin Kevin Hern has been always nice to talk on our side, even when we have sharp disagreements, always a decent guy. Thank you, Richie. I really appreciate Thank you, sir.
▶ 0:09:39Our Our entire agenda on the Ways and Means Committee has been to help the working men and women of America. And this bipartisan markup builds on that The tax legislation we will consider helps some of the most vulnerable and overlooked people in our country, preschool teachers, natural disaster victims, and domestic violence Our first bill ensures that sexual assault survivors who have already experienced unimaginable
▶ 0:10:09horror are not taxed on actual damages that they received for their suffering. Rebuilding one's life after abuse can be very expensive. Many survivors have to find new housing, move, change jobs, or enter therapy to begin healing from the abuse that they have suffered.
▶ 0:10:30I'm glad this bill from Representative Smucker and Gwen Moore ensures survivors don't have to give a portion of those damages to the IRS when their own need is so great. The bill also provides parity in the treatment of sexual assault victims in the tax code with the same treatment of physical assault victims who already receive the tax treatment tax-free treatment um for their damages.
▶ 0:10:59Our second bill helps victims of natural disasters, including wildfires. This bill introduced by Representative Steube, Thompson, and Panetta will be named in honor of our late colleague Doug LaMalfa, who never gave up the fight to help the people he represented in California recover from natural We could go down this dais and recall the devastation we have seen in our communities after a natural disaster We can all agree
▶ 0:11:29that Americans hit by a disaster shouldn't be hit by a financial disaster of a high tax bill. This bill allows Americans to deduct disaster-related losses and exclude wildfire compensatory payments from taxable income. Disaster victims should help should keep more of their own money to rebuild, restore, and reclaim their life. And this policy moves the tax tax code closer to this principle.
▶ 0:12:00Our next bill gives the same tax treatment to preschool teachers as their colleagues. K-12 teachers currently receive a tax deduction for buying classroom supplies out of their own pocket. The deduction can be as high as and preschool teachers on average have lower incomes than their K-12 counterparts.
▶ 0:12:25Yet do not enjoy the same benefit even though many buy classroom supplies out of their own pocket. This bill from Representatives Panetta and Fitzpatrick makes preschool teachers and other early childhood educators eligible for the classroom supplies tax deduction. Pre-K teachers who claim the standard deduction will be able to layer this on top as additional tax relief.
▶ 0:12:51Ultimately, this policy invests not only in teachers, but the students who will who will have access to necessary classroom materials. Next, we will consider two bills that push the IRS to better serve taxpayers. Our first makes the most feared agency in government more taxpayer-friendly. Given the advancement of AI and other modern technologies, engaging with the IRS should be made as seamless as possible for taxpayers.
▶ 0:13:19This bill introduced by Oversight Subcommittee Chairman Schweikert and Representative Beyer pushes the IRS to provide more modern customer service, like tracking the status of a tax refund the same way that Americans already track track packages shipped by private companies. The agency will also be required to improve online accounts and build a user-friendly dashboard on the IRS website to provide information on a call volume and wait times in real time.
▶ 0:13:50The last bill from the chair and ranking member of our tax subcommittee, Representatives Kelly and Thompson, strengthens the IRS whistleblower program. Whistleblowers serve an important role in identifying tax evasion that undermines the integrity of our tax code. Improving whistleblower protections, ensuring fair judicial review, and incentivizing timely program administration will go a long way in combating fraud, something that has been a key priority of this committee.
▶ 0:14:20I want to thank my colleagues on both sides of the aisle for introducing these taxpayer first policies on behalf of the people you represent and the millions of Americans who will benefit from them. I'm now pleased to recognize the ranking member from Massachusetts, Mr. Neal, for his opening statement.
▶ 0:14:36Thank you, Mr. Chairman. It's been more than a year of the Republican trifecta in Washington, and people are still left when Republicans will finally come to the table ready to achieve something that might make the lives of the American people a bit more affordable and indeed better. Once promising relief, no new wars, and a stronger economy along with low the president has delivered the exact opposite.
▶ 0:15:02Soaring costs, growing conflicts abroad without congressional assent, and an economy increasingly unsteady and further out of reach for working families. On the Republican watch, gas is now nearing $4 a gallon, up 34% in just a month. Coffee has turned into a luxury item with prices surging 26% and Americans wanting to treat their to a steak tonight can add 13% to the bill because of the president's economic policies.
▶ 0:15:32Yet instead of tackling the costs that they've driven up, they're once again filling the House floor with busy work or as President Trump has said, he is the president and Speaker of the House. What's being marked up today won't bring down costs or unlock opportunity. Any impact of this legislation starts with some risk of an ongoing rampage against taxpayer services. We understand and support the merit of the legislation in front of us this but also to understand the following.
▶ 0:16:02The American people are owed a functional, transparent IRS that administers tax policy diligently and But in order to achieve that, the IRS needs to be adequately staffed, funded, and supported, set up to succeed and uphold the law. A reminder, the request for expenditure increases at the IRS came from a Republican IRS Commissioner who asked for the additional money. That was not a made-up policy that Democrats invented.
▶ 0:16:31We understand, and that's why when we're in charge, we when we were in charge, we made investments that lowered wait times, saved people money, collected billions in owed taxes from evaders, and better positioned the IRS for the future. Unfortunately, our colleagues in the Trump administration seem not to share that vision.
▶ 0:16:49Their purge of dedicated workers, 25% cutback in IRS employees, those who process tax returns and answer customer service lines, are leading to delays, service interruptions, and indeed more headaches. Added bureaucracy by the president is currently holding the tax refunds of 1.4 million taxpayers currently hostage.
▶ 0:17:11Our colleagues' failure to act is costing families money at a time when letting the ultra rich off the This is where our attention should be President's willingness to extend his campaign political retribution to families in need undermines any effort to expand that disaster relief today. Earlier this week political reported that under President Trump states with Democratic governors only had their disaster funding requests approved 23% of the time.
▶ 0:17:40That defies what is known as the national principle that is part of the glue that holds this nation For states with Republican governors, that number nearly quadruples to 89%. Would Republicans like to put anything on the table that ensures that the president can't choose favorites when it comes to who gets help when their homes burn to the ground.
▶ 0:18:02The people deserve more than cosmetic that are not interested in changing They need policies that will reverse the president's harm and make their lives easier and fairer. Republican's records, it's indeed been carefully etched but not satisfactorily so. The people are reminded of it every time they go to the checkout line, they look at a medical bill, they fill up their gas tank, or indeed even going to the More of the same failed playbook is not going to fix that.
▶ 0:18:31Democrats are the ones in Washington that are fighting for a different path that brings fairness back, ends the cruelty from the administration, and delivers sustained relief for working families. With that, Mr. Chairman, I yield back my time. Our first order of is HR 2347, the Survivor Justice Tax Prevention Act.
▶ 0:18:51Act introduced by Representative Smucker and Gwen Moore, which would ensure damages received by sexual assault survivors are exempt from taxation without having to provide medical records to the IRS. I appreciate Representative Smucker and and Representative Moore for continuing to be champions for survivors survivors of sexual assault. their bipartisan leadership and their true compassion for these victims shines through in this effort.
▶ 0:19:19I urge my colleagues to support this bill, and I'm I'm pleased to recognize the gentleman from Pennsylvania, Mr. Smucker, for his opening statement. Uh thank you, Mr. Chairman. I really appreciate uh you bringing up this important bill for uh individuals who have been harmed through um uh sexual assault. this corrects a provision in the law that uh uh can treat physical injury differently um than uh sexual assault injury.
▶ 0:19:48Under current law, uh damages and settlement income um received due to either are exempt from federal income tax, but the IRS requirement that taxpayers provide proof of visible visible physical injury to receive the tax-exempt treatment.
▶ 0:20:08That's generally straightforward in a traditional uh physical uh personal injury case, but it can be uh considerably burdensome uh to prove that uh it's it's hard to meet that for victims of sexual assault, who often haven't sustained um vis- observable injuries. So, uh this requirement um by the IRS has resulted in inconsistent tax treatment for victims of essentially the same crime.
▶ 0:20:36Uh this bill, the Survivor Justice Tax Prevention Act, resolves the inconsistency. It clarifies that received by sexual assault victims is not taxed regardless of proof of physical uh injury. It provides victims of sexual assault greater tax certainty certainty without forcing them to fight with the IRS and relive the trauma of their case.
▶ 0:20:59And so, I want to thank uh Congresswoman Moore uh for her partnership uh in this really important uh bill. And again, I thank the chairman for bringing this bill up today, and I urge my colleagues to support this important legislation. Thank you, Mr. Chairman. I yield back. Thank you. I now recognize the ranking member from Massachusetts. Thank you. And with that, uh, Mr. Chairman, let me yield my time to our distinguished colleague from Wisconsin, Ms. Moore.
▶ 0:21:26Thank you so much for yielding, um, Ranking Member Neal. And I want to thank Chairman Smith, uh, for your support in bringing the Survivor Justice Tax Prevention Act before us today for consideration.
▶ 0:21:42And I absolutely want to thank Representative Smucker for working with Uh, it's been a long time coming as we've worked on this bill uh, to support survivors of sexual abuse and ensure that any settlement award received on account of sexual abuse is not subject to federal taxation.
▶ 0:22:04When I've talked about this bill uh, in public, and strangers were alarmed at the disparity and inequitable treatment of sexual uh, abuse victims. And so, it's been a long time coming, but here we are today. Currently, settlement payments made on account of personal physical injuries or physical sickness are excludable from gross income.
▶ 0:22:32Yet, many survivors face challenges proving that sexual assault resulted in physical injuries because they don't have evidence of, {quote} {unquote}, observable bodily harm, and have been denied the tax exemption. At this At the core of it all, this bill is about fairness, dignity, and justice for survivors.
▶ 0:22:57The Survivor Justice Tax Prevention Act redresses this situation by separately enumerating harms caused by sexual abuse, ensuring that survivors do not have to be by proving so-called observable bodily harm. This bill recognizes that the harm is real and lasting even when it's not visible.
▶ 0:23:25That's why this Representative Smucker and I have drafted this bill to make it explicit. No survivor should be asked to relive and their trauma or produce deeply personal records to be treated fairly under the law.
▶ 0:23:42We also make it clear that when a judgment or settlement includes an admission that damages are on account of sexual then that written agreement should be sufficient evidence to benefit from the tax exemption. If the IRS has reason to doubt the legitimacy of the facts underlying the agreement, then they can challenge it. But the presumption must be that the admission is valid.
▶ 0:24:11Of course, sometimes settlements aren't explicit that they are on account of sexual abuse. Someone might say pay a premium, for example, to maintain that silence. Even in those situations, a survivor should be able to benefit from the tax exemption and should not face undue hurdles proving that to the IRS. That's why our belts and suspenders approach is so important.
▶ 0:24:41We hear in the news about high-profile civil cases involving sexual abuse. I'm thinking about the accounts of trusted gymnasts, um, physicians abusing athletes and the victims of Jeffrey Epstein and many of his associates. But let's be clear about it. We need to acknowledge that abuse just isn't in the headlines because for every case we hear about, there are countless others that remain unseen.
▶ 0:25:10Every time a survivor comes forward, it takes extraordinary courage in the face of personal risk, scrutiny, and cost. And I urge my colleagues to support this effort to make the tax code better serve all survivors who receive settlements after prevailing against their abusers by not saddling them with a tax bill or having to fight the IRS.
▶ 0:25:36Before I yield, I would like to insert into the record without objection records and letters of support from the American Association of Settlement Consultants, the Victim's Rights Law Center, the Taxpayer's Protection Alliance, Futures Without Violence, the Athlete Survivors Assist, Legal Momentum, the Women's Legal Defense and Education Fund. Without objection. And thank you, Mr. Mr. Chairman. Um and I am hoping that we will pass this bill today and take it to the floor.
▶ 0:26:06And with that, I would yield back all 11 seconds of my time. Thank you for the 11 seconds, Ms. Moore. Um the committee will now proceed to consideration of HR 2347, the Survivor Justice Tax Prevention Act. Without objection, the measure will be considered as read and open for amendment at any point. And at this time, I offer an amendment in the nature of a substitute which was distributed in advance along with a green sheet explaining it.
▶ 0:26:33Without objection, the amendment in the nature of a substitute shall be considered as read, open for amendment at any point, and considered base text for purpose of amendment. I will now turn to Tom Bartold, Chief of Staff for the Joint Committee on Taxation, to provide a technical description of the amendment in the nature of a substitute with an emphasis on the changes made since introduction. I ask that members hold their questions until after his presentation. Uh Mr.
▶ 0:27:00Chairman, the committee members have before them two joint committee documents, JCX4, which describes the underlying legislation, and JCX10, the green sheet that describes the chairman's amendment nature of a substitute. As uh Mr. Smucker and Ms. Moore noted, present law provides an exclusion from income for damages awarded for physical injury or sickness.
▶ 0:27:24The chairman's amendment the nature of a substitute explicitly adds damages for sexual acts or sexual contact as so defined, regardless of whether there are medical records or observable injuries related to those sexual acts or sexual con uh contact.
▶ 0:27:42In addition, the chairman's amendment the nature of substitute provides that no inference uh should be drawn to whether the physical injury or sickness uh provision under present law requires evidence from medical records or observable injuries.
▶ 0:27:59Further, the amendment the nature of a substitute provides that if a decision or agreement uh states that damages uh being paid to a victim are attributable to a sexual act or sexual contact, that statement suffices to shift the burden of proof in any court proceeding to the Secretary of the Treasury should he or she wish to challenge the exclusion.
▶ 0:28:24Uh this provision would be effective for decisions or agreements after the date of enactment, and the staff of Joint Committee has estimated this would result in a revenue loss of $89 million over the budget period fiscal years 2026 through 2036. That concludes my brief uh description. Be happy to answer any questions that the members might have. Thank you. Are there any technical questions about the amendment in the nature of a substitute?
▶ 0:28:52Seeing none, we will move to strike the last word. Does any member wish to strike the last word? Mr. Larson. Well, thank you, Mr. Chairman, and let me congratulate the our colleagues.
▶ 0:29:09I think this is an outstanding piece of of legislation, and uh it's always heartening to see the committee working in a bipartisan basis on issues that we know uh should come before the American people, and I want to commend uh both of our colleagues, but I would Mr.
▶ 0:29:31Chairman like to submit for the record as well the Center of Budget and Policy it's in in an article entitled "Trump Administration Personnel Policies Harming Social Security Customer Service and Risk Lasting Damage." SSA now has fewer senior career leaders and fewer early career staff than at
▶ 0:30:01any point over the last two decades. I bring that up, Mr. Chairman, because as important as this bipartisan work is that we're doing, it's also important that this committee follow through on what we heard the Social Security administrator say the other day that they couldn't answer our questions uh that uh and haven't been before this And we've had
▶ 0:30:32two whistleblower reports now from the Trump administration about the data and information that's been compromised. And every member of this committee in your home district, all of the personal data and information of your has been gone through with the stated one of
▶ 0:31:02being distributed to an outside so they can use to alter elections and the other to hold to use for profit to for profit in data mining. We will continue to ask for a what should be a bipartisan to bring before this the oldest continuous committee in Congress.
▶ 0:31:30If we cannot set the standard for by what since when is social been a a you know a concept that we can't have bipartisan agreement on individuals looking at your constituents personal selling it for profit and mining it.
▶ 0:31:56Uh this is absolutely wrong and I know my colleagues on the other stand on the other side understand this and you also know that I will not stop talking about this until we get the individuals before us under oath testifying before this committee on what has happened to every one of our data.
▶ 0:32:25Over 300 million Americans impacted by this and the Ways and Means Committee at the committee of cognizance is silent. my thanks for the cooperation today and the individuals, which demonstrates that when we work together, we can accomplish great things with a common goal.
▶ 0:32:51I can't imagine and continue not to believe that members on the other side of the aisle what's happening to their constituents in what this administration and what DOJ employees have done and how your constituents' information and data is at risk and we can't even have a hearing on it or have people in front of us.
▶ 0:33:24That's outrageous and I think all of you know it. With that, Mr. Chairman, following the lead of uh of Gwen, I'll yield back my uh 30 Thank you, sir. Uh Mr. Davis. Thank you, Mr. Chairman. I move to strike the last word. Chairman, I think that passage of this bill is long overdue.
▶ 0:33:51I simply want to add my voice to it and commend Representatives Smucker and Moore for their leadership in bringing it to us and I yield back. Ms. Sanchez. Thank you, Mr. Chairman. I want to thank Congresswoman Moore and Congressman for introducing this long overdue legislation that puts the survivors of sexual assault on the same plane as survivors of other violent crimes.
▶ 0:34:21After making it through lengthy and probing hearings, no one should be required to pay taxes on their This bill also changes burden of proof requirements, meaning that survivors don't need invasive medical or physical evidence to exclude their restitutions from being taxed. I'm glad Congress is making it easier for survivors to become financially independent and to return to normalcy after an assault.
▶ 0:34:49Unfortunately, it seems we're only interested in partic- in protecting some President Trump's administration is working overtime to prevent the unredacted Epstein files from being These survivors of sexual assault at the hands of some of the most powerful and wealthy people in the world still have not gotten justice because of who their own government is protecting.
▶ 0:35:15This bipartisan effort will make it easier for survivors to come forward, get accountability, and move on with their lives. I just wish we were creating bipartisan efforts to make sure that the survivors in the Epstein files were granted the same measure of justice. And with that, I will yield back the princely sum of 3 minutes and 30 seconds. That's absolutely amazing. Thank you, Ms. Sanchez. Ms. Soul. Thank you, Mr. Chairman.
▶ 0:35:44I too want to add my voice to thank Representative Moore and Smucker for bringing forward this really important bill. I am a strong supporter of the Survivor Justice Tax Prevention Act. It's simply unfair that survivors of sexual assault or harassment may face an unexpected tax liability on compensation from their settlements. We should not be penalizing these victims for seeking justice.
▶ 0:36:13At a time when many victims' lives are being turned upside down, we should be doing all that we can to provide economic relief. Some victims are simultaneously facing medical bills and counseling bills, while also searching for a new safe housing, and attempting to establish financial independence.
▶ 0:36:31These are important factors that should be considered, and while the current tax code already excludes damages for physical injuries from taxation, it is high time that our tax code recognizes that non-physical harm, like trauma, can also have lasting impact on victims. Because of that, I want to say again to Representative Moore and Smucker, thank you for this bipartisan legislation, and I too agree with Representative Sanchez.
▶ 0:37:02It's our hope is that the Epstein's victims as well would benefit from a from a um from a bill such as this. With that, I yield back a princely sum of 3 minutes and 30 seconds. Thanks. Additional members wish to strike the last word. Seeing none, we will move to amendment. Are there any amendments to the amendment in the nature of a substitute?
▶ 0:37:29If there are no amendments, the question is in the adoption of the amendment in the nature of a substitute. All those in favor signify by saying I. Those opposed, say no. In the opinion of the chair, the eyes have it, and the amendment in the nature of a substitute is agreed to. I will now recognize Mr. Buchanan for the purpose of offering a motion. Mr. Chairman, I move the committee favorably reports H.R. 2347 as amended to the House of Representatives. The question is on the motion to favorably report H.R.
▶ 0:37:572347 as amended to the House of Representatives. The clerk will call the roll. Mr. Buchanan. Yes. Mr. Buchanan. Yes. Mr. Smith of Nebraska. Yes. Mr. Smith of Nebraska. Yes. Mr. Kelly. Mr. Kelly. Yes. Mr. Schweikert. Mr. Schweikert. Yes. Mr. LaHood. Mr.
▶ 0:38:24Arrington Mr. Estes Mr. Estes Yes. Mr. Smucker Mr. Smucker Yes. Mr. Hearn Mr. Hearn Yes. Mrs. Miller Mrs. Miller Yes. Dr. Murphy Yes. Dr. Murphy Yes. Mr. Castor Mr. Castor Yes. Mr. Fitzpatrick Mr. Fitzpatrick Yes.
▶ 0:38:55Mr. Stubbe Mr. Stubbe Yes. Ms. Tenney Ms. Tenney Yes. Mrs. Fischbach Yes. Mrs. Fischbach Yes. Mr. Moore Ms. Van Dyne Ms. Van Dyne Yes. Mr. Feinstein Ms. Malliotakis Ms. Malliotakis Yes. Mr.
▶ 0:39:30Mr. Yoho Mr. Yoho Yes. Mr. Miller Mr. Miller Mr. Bean Mr. Bean Yes. Mr. Moran Mr. Moran Yes. Mr. Neal Mr. Neal Yes. Mr. Doggett Mr. Doggett Yes. Mr. Thompson Mr. Thompson Yes. Mr. Larson Mr. Larson Yes. Mr.
▶ 0:39:59Davis Mr. Davis Yes. Ms. Sanchez Ms. Sanchez Yes. Ms. Sewell Ms. Sewell Yes. Ms. DelBene Ms. DelBene Yes. Ms. Chu Ms. Chu Yes. Ms. Moore Ms. Moore? Yes. Mr. Boyle. Mr. Boyle? Yes. Mr. Beyer. Mr. Evans. Yes.
▶ 0:40:29Mr. Evans? Yes. Mr. Schneider. Mr. Schneider? Yes. Mr. Panetta. Mr. Panetta? Yes. Mr. Gomez. Mr. Horsford. Mr. Horsford? Yes. Ms. Plaskett. Mr. Suozzi.
▶ 0:41:01Mr. LaHood. Mr. Arrington. Mr. Moore. Mr. Moore? Mr. Feenstra. Mr. Feenstra? Yes. Mr. Carey.
▶ 0:41:31Mr. Beyer. How is Mr. LaHood recorded? Mr. LaHood is not recorded. Mr. LaHood? Yes. Mr. Gomez. How is Mr. Suozzi recorded? Mr. Suozzi is not recorded. I Mr. Ms. Plaskett.
▶ 0:42:06Ms. Plaskett is not recorded. Ms. Plaskett? Yes. Chairman Smith, Yes. Chairman Smith, yes.
▶ 0:42:49Clerk, will you report the vote? Mr. Chairman, the yeses are 41 and the noes are zero. There being 41 yeses and zero noes, the motion is agreed to and H.R. as amended, is ordered favorably reported to the House. Without objection, I ask that staff be authorized to make technical and conforming changes to H.R. 2347 and that members have two additional days to file with the committee clerk supplemental, additional, dissenting, or minority views. Our next order of business is H.R.
▶ 0:43:195366, the Federal Disaster Tax Relief Act of 2025, introduced by Representatives Steube, Thompson, and Panetta. Representative Steube's state has been particularly hard hit by hurricanes in recent years, and he has been steadfast in advancing disaster-related tax relief policies.
▶ 0:43:51The bipartisan nature of this effort is a testament to the fact that no community across this country is immune to the threat of a natural disaster. I also also appreciate that this bill will be renamed in honor of our late colleague and friend, Doug LaMalfa, an individual who dedicated so much of his life to public service. We are honored to have Mr. LaMalfa Ms.
▶ 0:44:17LaMalfa here with us today as we acknowledge her husband's contributions to this important cause. I urge my colleagues to support this bill and I'm pleased to recognize the gentleman from Florida, Mr. Steube. Thank you, Mr. Chairman, Ranking Member Neal, and members of this committee.
▶ 0:44:34I once again speak to you to say, "Thank you for allowing me the opportunity to bring before this committee common-sense bipartisan disaster tax relief." I would personally like to thank Chairman Smith for agreeing to name this bill after the late Doug LaMalfa of California, who spent years championing disaster tax relief for his constituents and across the country. I got to know Doug very well as we worked together on disaster tax relief. Last Congress, I led a historic bipartisan coalition to deliver comprehensive disaster tax relief to Americans in 48 states.
▶ 0:45:04The impetus for this started on September 28th, 2022, when Southwest Florida experienced Hurricane Ian, one of the most devastating hurricanes to ever hit my state killing 150 people. I partnered with Rep. LaMalfa and former Ohio Rep. Bill Johnson to create a single tax relief bill to help victims of disasters.
▶ 0:45:22Along with the support across the aisle from Representatives Mike Thompson and Jimmy Panetta, both of California in this committee, we fought throughout 2023 and 2024 to deliver tax relief for millions of Americans and were able to get it across the finish line. But, there's more work to be done. Since July 4th, 2025, we have 34 states that have had a major disaster declaration. Who knows how many disasters will occur in 2026?
▶ 0:45:45Today is an opportunity to secure disaster relief not just for those 34 states, but for Floridians and anyone else who may experience a disaster this year. That is why we are voting today on an extension of the law that Rep. LaMalfa and I wrote to secure certainty for Floridians, Californians, and anyone else who has or will be affected by disasters. And I can't think of a better tribute than naming this bill in his honor. This bill also does important work to secure tax certainty for wildfire victims in our western states.
▶ 0:46:14I could say a lot of words about why this is important, but rather than speak on this part of the bill myself, Mr. Chairman, I ask unanimous consent to play a video of Mr. LaMalfa's floor remarks on the Federal Disaster Tax Relief Act. Without objection. I therefore yield my remaining time to my Republican co-lead on this bill, the gentleman from California, Mr.
▶ 0:46:33Doug So, just picture this though. As I talk about Paradise, you wake up in the morning, you hear there's a fire, all of a sudden there's an evacuation.
▶ 0:46:54People are crowding the the narrow roadways trying to get up the hill or down the hill out of town, barely make it in some cases, scorched vehicles, tires on fire, all that. They're seeing their rearview mirror, their their neighborhood engulfed in flames, their house their their houses going down, all their mementos, as was mentioned, are in them. They're wondering, "Did their neighbor get out?
▶ 0:47:16Did the elderly lady get up the street?" Thank God goodness there was a firefighter or neighbor that maybe helped that lady get out just in time so there was even not even worse loss of The resilience of these folks in the fires that I've had in my district and my neighbors and my my other neighboring states is is just amazing as they've stuck with us on this.
▶ 0:47:39So, a settlement happened with the utility to somehow partly compensate, and indeed, they'll never be made whole. My colleagues have pointed that out well. They can never be made whole even if even with a lot of money. That settlement should not be a taxable event. Now, think about it. Just break that down for a minute. You're in your home, you've been paying off your mortgage, maybe it's already paid off. You've got your equity in your So, this disaster happens. You lose your home.
▶ 0:48:08All of a sudden, you've got to rearrange your life, you got to rebuild your life. Well, that portion of that equity that now is going to be compensated for partly by the settlement with the utility, that portion of your home is now a newly taxable event because of the IRS interpretation on that. How is that right?
▶ 0:48:26How is that fair at all that you have ripped out of your life, your home, your family, whatever may have happened to you personally, and now you have a taxable event on top of that piece of equity that was in your home because of a bad interpretation here. That's why this this legislation is necessary. That's why it's been so strongly supported on both sides of the aisle all through the process here.
▶ 0:48:50That's why we need to overcome these hurdles we have, whether it's over in the Senate or what have you, to get this People deserve to have that of their life to be able to put it back in put themselves back into a a good way again. I thank you for the chair's indulgence. Uh I want to thank his wife, Jill, for being here. Back to you, back.
▶ 0:49:28Thank you, Mr. Subi. Um Mr. Neal. Thank you. And we want to wish our best to Doug's family as well. He was a really good guy. But, what you also just heard with that presentation is our embrace of the national principle. And the national principle says that if it's a fire or flooding in California, we all come to their aid. If there are fires in Alabama, we all come to their aid. We don't ask political affiliation. We say that there are members of the American family that are suffering.
▶ 0:50:00We come to their aid. Mr. Steube and as well to Doug and his and now to Mike Thompson. I know what Mike Thompson did personally and professionally as it relates to these natural disasters in his native California and in his He not only pushed FEMA and pushed for federal support, he raised private money to come to the aid of those families. I attended those functions with him.
▶ 0:50:25Again, let us never abandon the national principle as it relates to natural disasters. I yield my time to Mr. Thompson. Thank the gentleman for yielding. Mr. Chairman, thank you for bringing this bill up today and I hope we work just as expeditiously to bring it up to the floor for a full vote. Mr.
▶ 0:50:46Steube, my friend and partner from across the aisle, thank you for working on this important issue in a bipartisan manner and I do want to just give a great shout-out to Doug LaMalfa. Not only do we miss him, but we miss the good work that he's done.
▶ 0:51:02He was a great partner on this bill and another bill that he and I worked on together to improve fire throughout our country and to bring insurance coverage back to so many people who need that. Doug's going to be missed for a number of reasons. But providing relief to disaster victims should never be a partisan issue.
▶ 0:51:25Wildfires, hurricanes, earthquakes, floods, they do they don't distinguish between Democrats, Republicans, or decline to states. They do not care who you voted for, where you live, or what you believe. When disasters strike, our responsibility is to show up and deliver relief. In my district, wildfire survivors know the reality of delay all too well.
▶ 0:51:50Some families have waited years, in some cases more than 7 years, just to receive the relief that they were promised. Families who lost their homes, families who lost everything, forced not only to rebuild their lives, but to fight their own government just to be treated fairly. The wait itself becomes a second disaster. That's unacceptable. That's why I was proud to help deliver nearly $500 million in tax relief to wildfire victims.
▶ 0:52:20Relief that helped families begin to rebuild and begin to move forward. But we should not have to do this every single time there's a disaster. We should not require disaster victims to come back to Congress asking for relief that should already be guaranteed under our laws. That's what this legislation fixes. It makes relief forward-looking.
▶ 0:52:47It ensures that future wildfire victims who receive settlements are not stupidly taxed on that recovery and are not forced to wait years for Congress to act. This should be the floor, not the ceiling of how we respond to disasters in our community and to our constituents who are devastated by those disasters.
▶ 0:53:13When Americans are hurting, when they've lost everything, their federal government has an obligation to act and an obligation to act quickly. Every day a family is in limbo, another day a small business may not be able to reopen, another day that a community struggles to come back. This bill is a step in the right direction. We will not tax recovery.
▶ 0:53:40We will not force victims to navigate years of uncertainty just to be treated fairly. I urge my colleagues to support this legislation. I thank you, Mr. Chairman. I thank all my colleagues for their great support on this and I yield Thank you, Mr. Thompson.
▶ 0:53:59The committee will now proceed to consideration of HR the Federal Disaster Tax Relief Act of Without objection, the measure will be considered as read and open for amendment at any point. And at this time, I offer an amendment in the nature of a substitute, which was distributed in advance along with a green sheet explaining it. Without objection, the amendment in the nature of a substitute shall be considered as read, open for amendment at any point, and considered base text for purpose of amendment.
▶ 0:54:29I will now turn to Tom Bartold, chief of staff for the Joint Committee on Taxation to provide a technical description of the amendment in the nature of the substitute with an emphasis on the changes made since introduction. I ask that members hold their questions until after his Mr.
▶ 0:54:44Chairman, the committee members have before them two joint committee documents, JCX-5, which describes the underlying legislation, and JCX-11, the green sheet that describes the chairman's amendment in the nature of a Over the past decade or more, the Congress has enacted a number of modifications to casualty loss provisions and other rules in response to natural disasters. For the most part, these changes have been made outside of the Internal Revenue Code.
▶ 0:55:12The legislation as amended by the chairman's amendment would bring these provisions on the Internal Revenue Code. Specifically with respect to casualty losses, which key off of a qualified disaster area to define an incident period, the chairman's amendment in the nature of a substitute makes a change so that it applies so that the incident period of a of a disaster to which the presidential declaration is made begins on or after December 28th,
▶ 0:55:422019 and before January 1st of 2027. Just as a historical note since it seems like an odd date, December 28th, 2019 relates to Puerto Rican earthquakes and the beginning of the incident period declared for that as part of the Taxpayer Certainty and Disaster Tax Relief Act of 2020.
▶ 0:56:06This part provision related to casualty losses would be effective for losses after December 31st of 2024. With respect to the exclusion from gross income of qualified wildfire relief payments, the chairman's amendment in the nature of a substitute makes two important changes.
▶ 0:56:26A qualified wildfire is a federally declared disaster occurring after December 31st of 2014 and before January 1st of 20 17. The underlying legislation had no limitation limitation date. In addition, the amendment in the nature of a substitute provides that qualified payments may be received and excluded from the taxpayer's income without a date of limitation.
▶ 0:56:56The underlying legislation had provided a limitation date of payments received before January 1st of 2031. These provisions would be effective for payments received after December 31st of The Joint Committee staff has estimated that the revenue effect of these proposals would be a loss of $408 in federal receipts over the fiscal year periods 2026
▶ 0:57:27through 2036. That concludes my brief description. Be happy to answer any questions that the members might have. Thank you. Are there any technical questions about the amendment in the nature of a substitute? Uh did you want to strike the last word or a technical question? Okay, both. Ms. Moore. Um thank you so much, Mr. Bartol.
▶ 0:57:50I I was wondering if you could explain to me what um uh what it means that this relief would be available if it's not subjected to the 10% AGI limitation. What does that Underlying law allows a taxpayer to take casualty losses only if the net casualty loss exceeds uh 10% of adjusted gross income.
▶ 0:58:17The legislation that uh uh we're looking at today provides that in the case of major disasters. So, those uh federally declared uh major disasters that a different rule applies. And the rule the underlying rule is that a taxpayer may exclude any loss from an incident uh in excess of $500. That there is no 10% of AGI limitation.
▶ 0:58:51it's it's um it's not 10% of their adjusted gross income. That's not a limitation. It's Not not not in the case of a made uh of a major disaster as uh as declared in a uh under the Stafford Act.
▶ 0:59:08So, in other words, um I mean, would a person be able to be made whole if it's above 10% of their Uh well, again, we're looking at uh major disasters. Right, I'm talking about the flood in Milwaukee. Yep. That's what I'm talking about.
▶ 0:59:25Yep. No, I I appreciate uh appreciate that. If it's a uh federally declared major disaster area, then casualty losses recoveries for casualty losses may be excluded may be deducted or rather from income to the extent that they exceed 500 the loss exceeds $500.
▶ 0:59:45Got you. Got you.
▶ 0:59:46not necessarily made whole that that just depends on what sort of insurance recoveries they have and what's not not not recovered. Thank you so much, Thank you. Are there additional technical questions about the amendment in the nature of a substitute? Seeing none, we will move to strike the last word. Mr. Smith is recognized. Thank you, Mr. Chairman. Thank you, Mr. LaMalfa for your walk through there as well.
▶ 1:00:15This is important material that we are discussing. Certainly it's been brought to my attention how important it is with a disaster in my own district that is still taking place. I believe that ninth largest wildfire in American history has stricken the grasslands of Nebraska. Loss of life sadly Rose White lost her life trying to escape the fire. Some might think that a grassland fires aren't quite as dangerous. Yes, they are.
▶ 1:00:44And it's a reminder to all of us and I think the comments made earlier about how disaster can strike our districts in in different ways at different times and we need to keep that in mind. And I also certainly want to salute the opportunity here to name this bill after a Doug LaMalfa.
▶ 1:01:04A gentleman a legislator through and through the style and substance of Doug LaMalfa in getting work done is certainly going to be missed.
▶ 1:01:17And certainly I join my colleagues in uh Jill for being here Uh the your your reflection on Doug's life as well, I think has been very impactful for me personally, but uh hopefully for uh all of us on this dais and across the house on both sides of the aisle. When we look at uh the the need for coordination uh of local resources with federal resources, that has been taking place in Nebraska.
▶ 1:01:45I'm glad I can sit here and and say exactly that that the uh local fire chief for a a county, an entire county population less than 500, uh that uh that local fire chief knows his area more than anyone else, and federal resources kicked in, but per the direction of the local fire chiefs. I I think that is important to note, and that that coordination uh was was uh very effective.
▶ 1:02:12And so, as we do move forward, I think this is a reasonable ask in this legislation uh for federal disasters uh designated as such, and that uh we can help out folks in need. I would also I like to add that things might move a little more quickly on disasters if we paid our FEMA workers in addition to our TSA workers and some others that sadly aren't getting paid right now. Why? Because of politics in Washington. We can do better.
▶ 1:02:39The American people expect better, deserve better, and I think it's important uh that we engage in a very reasonable situation of actually paying our federal employees for the work they do on time and not late. Thank you. I yield back. Uh thank you. Uh just before I yield my time to Mr. Davis, let me uh respond to the gentleman's comments. And that would be along the line of the president is proposing eliminating FEMA.
▶ 1:03:06And the experience I had in my constituency years ago with a tornado, FEMA performed extraordinarily well. Parts of the city that were so damaged, eight communities, they came in and did a spectacular job. Those homes have been restored. People lived in trailers for 2 years. But what they were supposed to do, they did. They fulfilled their mission statement. We want them paid on this side, too. Break out that legislation and let us vote accordingly. I yield my time to Mr.
▶ 1:03:34Davis for a I didn't have a question. Strike the last word. Mr. Davis, you're recognized. Strike the last word. Thank you. Thank you, Mr. Chairman. And and I certainly agree with all of my colleagues who have on this issue.
▶ 1:04:00And I certainly commend the work that was done by our former Mr. LaMonta. I agree with all of the bills that we entertaining today. And they are wonderful.
▶ 1:04:18But I think even though they're as good as they are, they fail to address the heart of the affordability and health care that we currently face as our country. Families and workers are hurting. Unemployment is on the rise. Grocery costs are surging. Gas prices are skyrocketing.
▶ 1:04:48And health care premiums are soaring. And we ask ourselves, why? Well, much of the answer rests with the fact that we are a nation at war. Trade wars, the Republican attacks on health care, and the Republicans' abdication of their to govern.
▶ 1:05:15Right now, I am especially concerned that over 1 million taxpayers haven't gotten their refunds due to an and executed executive order to disallow paper-based payments. Each week, another 300,000 additional have their refund delayed.
▶ 1:05:40I'm also concerned because these millions plus taxpayers likely are the individuals who need their refund the most. There was no way to quickly ask the Internal Revenue Service to send them a check more quickly. The letter didn't even have a phone number to talk to a live person.
▶ 1:06:04Yet, our committee has not taken meaningful action to get the Internal Revenue Service to act more quickly. So, I ask unanimous consent to enter into the record the letters that Representative Terri Sewell and I have sent to Acting Commissioner of Besson about our concerns relative to delayed as well as the recent Tax Notes article about Treasury's
▶ 1:06:34failure to address our Today, we mark up a disaster bill aid bill that when President Trump is rejecting the disaster claims by blue states like Illinois. It is three times harder for blue states to get disaster funding under this administration. When Americans are hurting President Trump denies them aid because they disagree with his views.
▶ 1:07:05That is an un-American, yet my colleagues are not doing much to change it. As Americans struggle as small businesses suffer and our economy weakens, help is refused to them on the way.
▶ 1:07:23And so while we pass bipartisan legislation that is good, that is meaningful, that is decent, I'm afraid that we are failing to deal with the hard, cold realities of problems facing Americans. And I yield back, Mr. Chairman. Dr. Murphy. Thank you, Mr. Chairman.
▶ 1:07:53I'd like to move to strike the last word. I'm proud to support HR 5366, the Doug LaMalfa Federal Tax Relief Act. This legislation ensures that taxpayers impacted by federally declared disasters can fully deduct personal casualty losses, providing critical relief in the wake of devastating events. In North Carolina, especially Eastern North Carolina, we're all too familiar with the destruction caused by natural disasters, especially hurricanes.
▶ 1:08:19Each year, communities across our state face the threat of flooding, hurricane hurricane-force winds that upend our lives in just an instant. For families in Eastern North Carolina, these disasters bring not only physical devastation, but financial hardship as they work to rebuild their homes and rebuild build their businesses, and rebuild their lives. Recovery is not immediate. It often takes years for communities to fully get back on their feet.
▶ 1:08:43Just a year and a half ago, Western North Carolina experienced this reality first hand when Hurricane Helene caused widespread destruction and devastation. I had the opportunity to visit the region very quickly after the aftermath and witnessed the devastation first hand. The impact on those communities was and continues to be profound. It is critical that Congress does play its part in supporting these communities, not just in the immediate aftermath, but throughout the long recovery process.
▶ 1:09:10That includes ensuring the tax code works for disasters disaster victims, not against them. I would like to highlight two additional pieces of legislation that would further support disaster disaster impacted communities. First, HR 1849, the Disaster Mitigation and Tax Parity Act, originally introduced by my late friend and dear colleague Representative Doug LaMalfa. Congressman LaMalfa was a dear friend. He was just down the hall from me and was proud to partner with him on this effort.
▶ 1:09:37Following his passing, I have taken the honor and responsibility of leading this legislation. Across the country, states have established as disaster mitigation grant programs aimed at reducing damage and disasters before they strike. In North Carolina, for example, these programs help fund fortified roofs in coastal homes, strengthening their ability to withstand hurricanes. These initiatives have proven highly effective, saving homes, reducing damage, and lowering long-term recovery costs.
▶ 1:10:05Similar programs exist in Alabama, California, as well as in Louisiana. Unfortunately, the IRS currently treats these state-based mitigation grants as taxable income, forcing homeowners to pay taxes on funds intended to protect their property. Meanwhile, a similar program provided through FEMA is tax-free. HR 1849 would correct this inconsistency and ensure that state-based disaster mitigation grants are not subject to federal taxation.
▶ 1:10:31I also want to highlight HR 47450, the Disaster Zone Energy Affordability and Investment Act, introduced by my friend and colleague, Congressman Steube. This legislation would allow utility companies to monetize unused tax credits, provided those funds are reinvested in projects located in disaster affected areas. This approach would help drive investment into rebuilding critical energy infrastructure in these communities that need it the most, including Western North Carolina.
▶ 1:10:59Lowering utility costs and strengthening energy systems are essential for the delivery of long-term As I mentioned earlier, many communities in Western North Carolina are still rebuilding, as are some still in Eastern North Carolina from previous hurricanes, and the process takes time. HR 7450 offers a practical way to help accelerate that recovery, and I commend Congressman Steube for his leadership on this issue.
▶ 1:11:25I look forward to working with my colleagues on the committee to advance these very, very important efforts and delivering meaningful relief to disaster victims. Our tax code should work for our Americans, which I believe, especially in OBB, we did, but further reformation can occur, and this is what these legislation pieces offered. Thank you, Mr. Chairman. I'll yield back. Thank you, Mr. Sanchez. Yes, um Mr.
▶ 1:11:48Chairman, I'd like to ask, you know, unanimous consent to enter into the record an article titled "Missed Deadline for Treasury to Address Refund Delays Rile Stems." Without objection. Thank you. Thank you. Ms. Moore. Thank you, Mr. Chairman.
▶ 1:12:05I I think this is a particularly considering the flooding that occurred um Milwaukee, Wisconsin, and in uh last August, I am so grateful for this bill.
▶ 1:12:21Um and I would ask the authors of the bill um to allow me, once it's been reported out, to become a co-sponsor of this Um so many of my constituents were left with uh hundreds of thousands of dollars of losses, and FEMA um did not restore them, uh didn't even come close to restoring them.
▶ 1:12:49Um they had insurance claims, but the insurance company said, "Well, it's flooding. That's an act of God, and you know, unless it was it was sump pump failure, uh, we're not going to make you whole." It happened, uh, at a time of the month much like, uh, I I wouldn't compare it necessarily to what we saw with Katrina, but I was reminded of that when I saw the raw sewage that had backed up in so many basements at the end of a month in in
▶ 1:13:20in August, where people just did not have the money to call in contractors to do the cleanup, and and, you know, putting on some rubber gloves and pulling out a bottle of bleach just was not enough. So, I'm so grateful, and I'm just announcing my intent to be a co-sponsor of this legislation, and with that I would yield back. Mr. Castor. Thank you, Mr. Chairman. I move to strike the last word, and I do want to thank you, Mr.
▶ 1:13:50Chairman, for holding this markup today for this important piece of legislation. I believe as members of Congress, we all have a responsibility to stand with the the small businesses, and the in the aftermath of natural disasters. Uh, obviously, that's when people are most vulnerable.
▶ 1:14:10We've seen in recent years, especially, more Americans have faced devastating storms, like floods, tornadoes, which leaves behind not only physical but also a long and maybe complicated path towards financial recovery.
▶ 1:14:30We've seen too often survivors forced to really a confusing maze of federal rules and and federal deadlines at the moment that they're trying to piece back their lives together. It adds red tape to tragedy.
▶ 1:14:46I believe that's why Congress has taken bipartisan steps to not only simplify but strengthen federal disaster tax relief, recognizing that timing and flexibility can make the difference between recovery or ruin for a family and small business. Mr.
▶ 1:15:05Chairman, I've been proud to help lead that effort through legislation that we sponsored last year, the Filing Relief for Natural Disasters Act, which did pass the House on March 31st of last year, 2025, and was signed into law by President Trump on July 24th, 2025, to give disaster survivors more certainty and more time to meet meet their tax obligations.
▶ 1:15:32That law ensures that the IRS can promptly extend filing and payment deadlines when a disaster strikes, so that survivors are not punished by the tax code while they're recovering.
▶ 1:15:46This bill, HR 5366, builds on the same common-sense When Americans are struck by federally declared disasters, tax code should work for them, not against them.
▶ 1:16:05Under this bill and and the amendment in the nature of a substitute, I am glad that this bill is renamed the Doug LaMalfa Federal Disaster Relief Certainty Act. It's in honor of our late colleague who championed this cause, and he was a strong advocate who was respected on both sides of the aisle and and certainly by his constituents and those who live in
▶ 1:16:35This bill strengthens and extends targeted disaster tax provisions so that families can deduct qualified disaster loans more easily and so that communities can access that relief more quickly after a major disaster.
▶ 1:16:51By making these disaster tax rules more predictable, we're taking away that uncertainty for survivors and streamlining the administration for the IRS and getting help and resources to those who most need it.
▶ 1:17:09Most importantly, this legislation continues the bipartisan approach that we established with the filing relief for natural disasters act, putting politics aside to focus on practical and pragmatic solutions for who may have lost everything.
▶ 1:17:26So I do encourage my colleagues to support this common-sense legislation so that together with the filing relief for natural disasters act, which is now signed into law, we can provide robust and predictable relief to Americans recovering from natural disasters. And with that, Mr. Chairman, I'll yield Thank you, Mr. Panetta. Thank you, Mr. Chairman and ranking member Neal.
▶ 1:17:53And of course, thank you to my colleagues on the Ways and Means Committee, uh Mr. Steube and Mr. Thompson. I really believe that not just this bill, uh but the bill that was passed last year embody what it takes to get things done for Arkansas constituents.
▶ 1:18:10Now, look, I'm very proud to be uh a part of this legislation, the Doug LaMalfa Federal Disaster Tax Relief Certainty Act, that would extend for 18 months to be able to claim the casualty loss deduction. But I'm also want to give um a shout-out to Mr. Steube and to Mr. Thompson for the work that they did to provide the underlying bill for the foundation for the bill that we're dealing with today.
▶ 1:18:38That would be the Federal Disaster Tax Relief Act of 2025. I say that because there were a lot of barriers put up in front of Mr. Steube and Mr. Thompson when it came to leadership basically not moving this bill. Despite those barriers, what you saw from Mr.
▶ 1:18:57Steube is a constant fight for him to get this bill done because he understood how important it was for his constituents in Florida and he empathized with our constituents in California. And so the underlying bill was passed through a discharge petition, if you can imagine that, something as important as this. Despite that hurdle, Mr. Steube with the work of Mr.
▶ 1:19:21Thompson and other colleagues, Democrats and Republicans, actually did their best to get other people to sign on to that bill, get it passed out of Congress, get it passed out of the Senate and get it to the president's desk. I think people should understand that this wasn't easy. As happy as we're sounding today, this was very difficult to get this underlying bill if it wasn't for the hard work of Mr. Steube and Mr. Thompson.
▶ 1:19:46Now look, it was hard work because we understand that the disasters do not strike blue states, they don't strike red states, they don't just harm Republicans, it's not just Democrats, it's all Americans unfortunately that have experienced what happens in one way or the other when disasters strike. Now Doug LaMalfa also understood that.
▶ 1:20:06Now I've Trust me, Doug and I had our political differences, but we always worked to find our policy similarities, especially when it came to serving our constituents, especially when it came to ensuring that they got the proper tax relief after experiencing natural disasters and making sure that all Americans are made whole, especially when it comes to the federal tax code.
▶ 1:20:30So from discharge petition to Doug LaMalfa, ladies and gentlemen, this is how things get done. I realize that good governing isn't sexy. This will not make the headlines tonight, but good governing is good politics, and I'm proud to be a part of it today with the passage of the Doug LaMalfa Federal Disaster Tax Relief Certainly Act out of the the Ways and Means Committee. With that, I yield back. Thank you. Um, are there additional members wish to strike the last word?
▶ 1:21:00Seeing none, we will move to amendments. Oh, Ms. Chu. No amendment. Mr. Chairman. Okay. Are there Let me say this. Are there any amendments to the amendment in the nature of a substitute? We'll now move to amendments, Ms. Chu. Mr. Davis, hold on. Mr. Davis, yes. Yes, it was. Yep, absolutely.
▶ 1:21:32Uh, Mr. Chair, I have an amendment at the desk. Will the general general lady suspend while the amendments is is the amendment is distributed? Uh, point of order has been reserved. Ms. Chu, you're recognized. Uh, Mr.
▶ 1:21:57Chair, first I want to commend the chair for bringing up this important legislation, the Federal Disaster Tax Relief Act of 2025, now named after uh, Doug LaMalfa. And I especially want to thank Representatives Thompson, Speier, Panetta, and the late Congressman LaMalfa for their leadership in introducing this bill. This bill is so important for my district right now, which is where the devastating and Angeles fires occurred.
▶ 1:22:28Because my constituents are making settlements as we speak, it is so important they are both relieved from paying taxes on the precious dollars that can help them restore their lives. Just over 1 year ago, the Eaton fire forever changed the communities of Pasadena and Altadena in California that I represent. The Eaton fire burned 6,000 homes to the ground, leaving 20,000 people homeless with only the clothes on their backs.
▶ 1:22:59Most tragically, it took the lives of 19 of our loved ones, whose absence is still felt every single day. At the same time, just 30 miles away, the Palisades fire destroyed another 7,000 structures and tragically took 12 lives. Since then, families in my district have been fighting every single day to recover, to rebuild their homes, their communities, and their lives.
▶ 1:23:25And now, after months of waiting, thousands of survivors in my area are finally beginning to receive settlement offers from the utility to rebuild their homes, totaling hundreds of millions of But, the problem is that the federal tax exemption for these settlements expired at the age of at the end of 2025.
▶ 1:23:48So, at the very moment that survivors are finally getting the resources they need to rebuild, they're being being denied the full value of the compensation they are so rightfully So, that is why the Federal Disaster Tax Relief Act of 2025 is so significant. It will ensure that survivors in my district and across the nation can receive the entirety of their settlements tax-free.
▶ 1:24:13And I want to be clear, this is a significant step forward, but it cannot be the last step. Because today, 14 months after the fire, over 70% of survivors have not returned to their homes. Most are facing net losses of over $100,000, have exhausted their savings, or have gone into debt.
▶ 1:24:36So, while this bill removes one major barrier, survivors are still facing many And that is why I introduced my bill, the Disaster Survivors Tax Relief and Recovery Act, to address the full scope of the challenges families are facing as they try to rebuild. That's the purpose of my amendment today.
▶ 1:24:57My amendment builds on this bill by incorporating key provisions from my legislation to close the remaining gaps, ensuring survivors are not penalized for accessing their retirement savings just to get by, expanding charitable support to impacted communities, and helping spur rebuilding by increasing low-income housing tax credits. But, of course, we must recognize that tax relief alone is not enough.
▶ 1:25:23The Los Angeles fires were among the costliest disasters in our nation's history, and the single most important thing survivors need now is capital to rebuild. That is why it is critical for President Trump to fully deliver Governor Newsom's disaster supplemental request with no strings attached.
▶ 1:25:43Without that support, recovery will be slower, more expensive, and further out of reach for families who are already struggling to put their lives together. Natural disasters do not discriminate, and neither should our response. So, Mr. Chair, I appreciate your leadership in bringing this bill forward and your willingness to work together to support disaster survivors across the country. I have two questions.
▶ 1:26:10First, um my constituents really need this tax relief now, which means it's so important to get this bill across the finish line and signed into law. Are you planning to bring this bill to the floor for passage? The bill that's before us right now? Yeah. Yeah, I don't mark up legislation unless I want it law. Okay, thank you for that.
▶ 1:26:34And my second question is that um I know that my amendment goes beyond this settlement issue uh but I would like to ask for a commitment to continue working on these issues which I feel are so important for natural dis- disasters survivors across the country. And um I would like to ask for your commitment to continue working on this and if so then I would withdraw the amendment. I'd like to continue. I would like to work with you on it. Absolutely.
▶ 1:27:03Thank you so much for that and with that I withdraw and I yield back.
▶ 1:27:07Oh oh oh before you would You can you can All right. Can I Wait wait What time
▶ 1:27:15This uh Miss Moore, you have an amendment? No, I would like to ask I'm sorry. Ms. Chu's amendment has caused me to be concerned about this. I would like to ask Mr. Barto information about this. That time has passed.
▶ 1:27:42Um we're on uh We've went through technical questions. We went through strike the last word and so I apologize for the time.
▶ 1:27:49strike the last word? Move to strike
▶ 1:27:50We've already passed strike the last word. You could offer an amendment. I don't want to offer an amendment, sir. I I just have a question. Mr. Harris has another amendment so you can speak on it. What is your Okay. All right. If if if I allow you to ask the question, I have to allow everyone who wants to buy a car
▶ 1:28:09you You have to let everybody get what I get. It ain't like that. That There was a reason why your bill was the first one, Ms. Moore. Mr. Horsford. Thank you, Mr. Chairman. I have a an amendment at the desk. Mr. Chairman, I reserve point order. Uh point of order has been reserved.
▶ 1:28:38Will the gentleman suspend while the amendment is distributed? Yes. Gentleman may proceed. Thank you, Mr. Chairman. I also would like to begin by commending uh my colleagues, Mr. Stubby, Mr. Thompson, and the sponsors of this legislation, and will be voting yes uh on the underlying bill in support of Mr. LaMafia and his legacy.
▶ 1:29:04Uh it is well-intentioned uh legislation, and I look forward to supporting it. Uh Mr. Chairman, as you know, there are many forms of disasters. Uh and there is a disaster that is unfolding in every district with a gaming economy throughout this And in Nevada, we know that all too Unfortunately, due to actions that Senate Republicans took, uh they included a provision
▶ 1:29:35whereby the tax code now treats gambling losses in a way that defies basic common Before HR 1, gamers could deduct 100% of their gambling losses. You were taxed on what you actually earned, nothing more, nothing less. But Senate Republicans limited the wagering loss deduction.
▶ 1:29:58They chose to unjustly penalize gaming patrons and tourists by capping that deduction. those who participate in recreational gaming will be forced to pay taxes on money they never earned. Think about that. Paying taxes for income you never actually earned.
▶ 1:30:22And the effect isn't just on our patrons or on tourist, it affects workers in Las Vegas and all across uh Nevada and in any state that has a significant gaming industry. Mr. Chairman, you know that I've been raising this issue since HR 1 passed. And I trust your support of addressing this issue.
▶ 1:30:50That is why I, alongside my colleague Representative Representative Max Miller from Ohio, have introduced the Full House Act. Our bill fixes this mistake and restores the full deduction for gambling losses. And that is exactly what this amendment does. It restores the law to what it was This type of change is necessary to ensure that existing rules, regulations, and court precedents remains relevant and intact.
▶ 1:31:22I would like to yield now my time to Representative Miller uh to speak on this amendment. Thank you, Mr. Horsford. I really appreciate it. And thank you, Mr. Chairman, as well for holding this markup here today. I really want to thank Mr. Horsford again for his partnership and for offering this amendment. This has been a very strong bipartisan effort, and I appreciate his leadership on this issue. At its core, this is a simple principle. Americans should not be taxed on money they didn't actually take home, and Mr. Horsford said it himself, the same thing.
▶ 1:31:51When this tax code strays away from the standard, it undermines fairness, and it creates real distortions not just for individuals, but for industries and local economies that rely on clear and consistent rules. It's about ensuring the IRS treats taxpayers honestly and consistently and that our tax system reflects real economic income and not artificial calculations.
▶ 1:32:12That said, I do believe it's important that we keep today's markup focused on the legislation that is before us, but I look forward to continuing this work and getting it across the finish line in a bipartisan manner with my colleague Mr. Horsford. Uh with that, thank you and I yield back at Mr. Horsford. Thank you, Mr. Miller. And I, along with Mr. Miller and other members of the committee, look forward to working with you, Mr.
▶ 1:32:36Chairman, as well as the ranking member, to find an appropriate time uh to address this issue, uh but as I said, it's important that we address all issues that are affecting our economy uh and any disasters that impact that. And for with that, I will withdraw this amendment and look forward to working with you, Mr. Chairman, and other members of the committee. Thank you. Thank you, Mr. Horsford. I appreciate um your amendment and I appreciate the work that you and Mr.
▶ 1:33:04Miller are doing on this um very subject, and I am committed to make sure we fix a problem that the Senate made. uh they tend to do a lot of those, but this is this is something that I'm committed to. So, I appreciate that. Are there additional amendments um to the amendment in the nature of a substitute? Seeing no amendments, um the question is on the adoption of the amendment in the nature of a substitute.
▶ 1:33:33All those in favor signify by saying aye. Aye. Those opposed say no. In the opinion of the chair, the ayes have it, and the amendment in the nature of a substitute is agreed to. I will now recognize Mr. Buchanan for the purpose of offering a motion. Mr. Chairman, I move the committee favorably report HR 3366 as amended to the House of Representatives. The question is on the motion to favorably report HR 5366 as amended to the House of Representatives. The clerk will call the roll.
▶ 1:34:03Ms. Buchanan. Ms. Buchanan. Yes. Mr. Smith of Nebraska. Mr. Smith of Nebraska. Yes. Mr. Kelly. Mr. Schweikert. Mr. Schweikert. Yes. Mr. LaHood. Mr. LaHood. Yes. Mr. Arrington.
▶ 1:34:33Mr. Estes. Yes. Mr. Estes. Yes. Mr. Smucker. Mr. Smucker. Yes. Mr. Hern. Yes. Mr. Hern. Mrs. Miller. Yes. Mrs. Miller. Yes. Dr. Murphy. Dr. Murphy. Yes. Mr. Custoff. Mr. Custoff. Yes. Mr. Fitzpatrick. Mr. Fitzpatrick. Yes. Mr. Steube.
▶ 1:35:04Mr. Steube. Yes. Ms. Tenney. Ms. Tenney. Yes. Mrs. Fischbach.
▶ 1:35:11Yes. Mrs. Fischbach. Yes. Mr. Moore. Yes. Mr. Moore. Yes. Ms. Van Duyne. Yes. Ms. Van Duyne. Yes. Mr. Feenstra. Mr. Feenstra. Yes. Ms. Malliotakis. Yes. Ms. Malliotakis. Yes. Mr. Carey. Yes. Mr. Carey. Yes. Mr. Yoho. Yes. Mr. Mr. Yoho. Yes. Mr. Miller. Yes. Mr. Miller. Yes.
▶ 1:35:42Mr. Bean. Yes. Mr. Bean. Yes. Mr. Moran. Mr. Moran. Mr. Neal. Mr. Neal? Yes. Mr. Doggett. Mr. Doggett? Yes. Mr. Thompson. Mr. Thompson? Yes. Mr. Larson. Mr. Larson? Yes. Mr. Davis. Mr. Davis? Yes. Ms. Sanchez. Ms. Sanchez? Yes.
▶ 1:36:12Ms. Sewell. Ms. Sewell? Yes. Ms. DelBene. Ms. DelBene? Yes. Ms. Chu. Ms. Chu? Yes. Ms. Moore. Ms. Moore? Yes. Mr. Boyle. Mr. Boyle? Yes. Mr. Beyer. Mr. Evans. Yes. Mr. Evans? Yes.
▶ 1:36:42Mr. Schneider. Mr. Schneider? Yes. Mr. Panetta. Mr. Panetta? Yes. Mr. Gomez. Mr. Horsford. Mr. Horsford? Yes. Ms. Plaskett. Ms. Plaskett? Yes. Mr. Swalwell. Mr. Kelly. Mr. Kelly? Yes.
▶ 1:37:13Mr. Arrington. Mr. Beyer. Mr. Gomez. Mr. Swalwell. Chairman Smith. Yes. Chairman Smith? Yes.
▶ 1:38:04Clerk will report the vote. Mr. Chairman, the yeses are 41 and the no's are zero. There being 41 yeses and You're not recorded. You get Swazi, too? It's just Swazi, too. Okay. How record Mr. Arrington as a yes. Mr. Swazi, how are you recorded? Thank you, Mr. Chairman. Mr. Arrington, Mr. Swazi, yes.
▶ 1:38:32So, there being 43 yeses and zero no's, the motion is agreed to and H.R. 5366, as amended, is ordered favorably reported to the House. Without objection, I ask that staff be authorized to make technical and conforming changes to H.R. 5366 and that members have two additional days to file with the committee clerk supplemental, additional, dissenting, or minority views. Our next order of business is H.R.
▶ 1:38:595334, the Supporting Early Childhood Educators Deduction Act, introduced by Representatives Fitzpatrick and Panetta, which would extend the same tax deduction for out-of-pocket expenses that their K-12 colleagues receive. I'm so grateful for the leadership of Representatives Fitzpatrick and Panetta for bringing this common-sense legislation forward to to ensure we are acknowledging the contributions of all of our educators.
▶ 1:39:27Both Both colleagues have a track record of standing up for teachers and educators and have been fighting for years to make the change um in law a reality. I urge my colleagues to support the bill and I'm pleased to recognize the gentleman from Pennsylvania, Mr. Fitzpatrick. Thank you, Chairman Smith, for holding this markup and for allowing us to speak on this very important legislation. Mr.
▶ 1:39:49Chairman, in Pennsylvania, we have over 68,000 early childhood educators who work tirelessly every single day to support our youngest learners. During a child's first 5 years, the foundation is built for everything that follows. How they learn, how they grow, and how they succeed. These formative years are critical, and our early childhood educators play a key role and a central role in shaping these children's future. These educators do more than teach.
▶ 1:40:20They create a safe and engaging environment for children to thrive. And despite earning very modest wages, these educators frequently reach into their own pockets to make sure their classrooms are equipped with the materials and the supplies that these young students need to grow. Mr. Chairman, this dedication speaks volumes about their commitment, not only to their students, but to our community and to our future workforce.
▶ 1:40:48And unlike K-12 teachers, early childhood educators cannot deduct out-of-pocket expenses they incur in support of their classrooms. These educators invest their own money to ensure that young learners have the tools they need to succeed. And it is essential we extend that same recognition to support our early childhood educators just like we do our K-12 educators. Mr.
▶ 1:41:14Chairman, the SEED Act offers a bipartisan common-sense solution by allowing pre-K educators to claim the same out-of-pocket expense deduction that is already available to our K-12 educators. Correcting this exclusion and reimbursing these educators for their classroom investments will ultimately strengthen our workforce and direct more resources to our children during their most formative and critical years.
▶ 1:41:40I want to thank my friend Jimmy Panetta for his partnership on this bill and I urge my colleagues to support this bipartisan common sense common sense legislation to support our early childhood educators and the children that they teach. With that I yield back. I now recognize the ranking member. Thank you, Mr. Chairman. Let me yield my time to our distinguished colleague from California, Mr. Panetta. Thank you, ranking member Neal. Thank you, Chairman Smith. And of course thanks to my colleague on this bill, Brian Fitzpatrick.
▶ 1:42:09The Supporting Early Childhood Educators Deduction Act or the SEED Act is legislation that would extend eligibility for the educator expense deduction to early childhood educators. As you have heard my colleague so articulately explain, it's legislation that would finally recognize the vital role early childhood educators play in shaping the foundation of a child's development.
▶ 1:42:35These educators work with children during their most formative years, laying the groundwork for cognitive, social, and emotional growth. Yet, despite this enormous responsibility, they have remained excluded from basic tax benefits that acknowledge teachers' financial burdens. The The SEED Act would correct this by finally extending the existing above-the-line educator expense deduction to early childhood educators working with children 5 years old and younger.
▶ 1:43:06The current $300 deduction may seem modest, but for educators who routinely and often dip into their own savings to provide classroom supplies, it is going to be a meaningful acknowledgement and support. It is also a federal recognition of the professionalism, their dedication, and their commitment to the development of our children.
▶ 1:43:28Across the country, we are facing a severe shortage of early childhood educators, a crisis driven by low wages and limited support, and of course the affordability issues that we're hearing more and more about. Despite these challenges, early childhood educators continue to extend themselves to ensure children have safe, enriching environments in which to grow. They do this even when their paychecks fall short, and even when they are forced to choose between personal expenses and classroom needs.
▶ 1:43:59By including early childhood educators in the educator expense deduction, the SEED Act acknowledges both the economic hardship and the extraordinary dedication these educators bring to their work every single day. Investment in childhood education yields significant benefits, including better academic performance, higher graduation rates, and increased economic output.
▶ 1:44:23The bill finally aligns federal tax policy with the reality that early childhood education is a critical part of a child's development and our economic strength. I admit I'm very proud to have authored this bill, and I'm proud that my colleague is Brian Fitzpatrick, because this bill is a first step toward a broader conversation about supporting, retaining, and respecting the early learning workforce. I respectfully ask my colleagues on committee to support this impactful legislation.
▶ 1:44:54And with that, I yield back. Thank you again, Mr. Chairman. Thank you. The committee will now proceed to consideration of H.R. the Supporting Early Childhood Educators Deduction Act of 2025. Without objection, the measure will be considered as read and open for amendment at any point. At this time, I offer an amendment in the nature of a substitute, which was distributed in advance along with a green sheet explaining it.
▶ 1:45:19Without objection, the amendment in the nature of a substitute shall be considered as read, open for amendment at any point, and considered base text for purpose of amendment. I will now turn to Tom Bartold, Chief of Staff for the Joint Committee on Taxation to provide a technical description of the amendment in the nature of a substitute with an emphasis on the changes made since introduction. I ask the members hold their questions until after his presentation. Mr.
▶ 1:45:43Chairman, the committee members have before them two Joint Committee documents, JCX 6, which describes the underlying legislation, and JCX 12, a green sheet, which describes the chairman's amendment in the nature of a Under present law, there's provided to educators of children in K through 12 an above-the-line deduction of up to $350 with any excess amount available to be itemized.
▶ 1:46:12What this legislation does is that deduction to early childhood educators. The chairman's amendment in the nature of substitute broadens and clarifies the definition of an eligible educator to include early childhood teachers, instructors, counselors, principals, or aids in a qualifying school, and those persons must be providing at least 900 service hours.
▶ 1:46:40That's the same service hour standard as under present law for K through 12 teachers. In addition, the amendment the chairman's amendment in the nature of a substitute specifies an eligible school as education or child care to two or more children under age six who do not reside at the facility. And that the school operates either at public expense, for fee, or under a grant for its services.
▶ 1:47:09The amendment in the nature of a substitute also changes the effective date to expenses paid after December 31st of 2025. The staff of the Joint Committee has estimated that this legislation would result in a loss of federal receipts of $648 million over the budget period of fiscal years 2026 through 2036. Uh that concludes my brief description. Be happy to provide any answers to any questions that the members might have.
▶ 1:47:39Thank you. Are there any technical questions about the amendment in the nature of a substitute? Mr. Smith. Thank you, Mr. Bartol. I I want to have some clarification here. Is there any stipulation as to whether this benefit would only apply to public school teachers and not private school or is the would you characterize the language as agnostic as to public or private
▶ 1:48:02agnostic agnostic again, sir. As noted, the definition is a school that operates at public expense. So, that'd be a public school or for fee, be a private school or under a grant for its services, which could also be a private private school or or non-profit operation. Okay, thank you.
▶ 1:48:21And so, just back to the napkin calculation of what this benefit would be, you could take the effective tax rate of a average multiply that out, divide it out with the benefit is or the deduction is for the actual benefit, correct? Uh correct, So, I I appreciate that and I also want to say I appreciate my own public school teachers growing up and this is a pretty modest benefit.
▶ 1:48:52I look you know, moving forward that we can afford, especially early childhood, that we know is is important and as we do act, I hope to help students and teachers that we will pursue policies that even directly help students as well. This I think this benefit would indirectly help students, but still can be important.
▶ 1:49:14So, appreciate the efforts here and especially the bipartisan nature of this and look forward to doing what we can to promote education moving forward. Thank you. I yield back. Are there additional technical Seeing none, we will move to strike the last word. Mr. Doggett is recognized to strike the last word. Thank you, Mr. Chairman.
▶ 1:49:37I have no objection to this though it seems to be based on the principle that something is better than And it's only a little something. In saying that, I'm in no way being critical of the good intentions of the sponsors, but rather recognizing that in this Congress, getting even a little something is about all that can be accomplished.
▶ 1:50:00This committee has been responsible for the diversion of a significant amount of federal resources in its backdoor voucher bill. Our school trustees across the state of Texas are given the responsibility of allocating the pain of bad state policy and bad federal policy as in one neighborhood after another neighborhood schools are being closed as school districts are financially strapped.
▶ 1:50:28I believe that our educators, our preschool teachers, and all of our teachers deserve much more than this Every year, they spend their own money on school supplies to make up for the sorry state of public school funding. This is a back-to-school ritual as as familiar as as meeting the families of new students and arranging a classroom seating chart.
▶ 1:50:52Recent surveys indicate that educators have been dishing out anywhere from $500 to $900 from their own pockets on supplies and resources every year, which school districts cannot afford. And these costs are unfortunately under the Trump administration only going up. Thanks to Trump's reckless tariffs, educators and families are forced to pay on average over 7% more this year for school supplies than in previous years.
▶ 1:51:22For example, the cost of notebooks is up Binders up 12%. From lunch boxes to calculators, these price increases are being felt not only by teachers, but by families all over this country. Uh now, let's compare these supply cost to the wages that educators are being paid.
▶ 1:51:43Again, I refer to my home state of Texas, where the indication is that educators, public school educators, are being paid on average as they start about 10,000 less than the average living wage for a single adult in Texas.
▶ 1:51:59And of course, for early childhood educators, which this bill addresses, uh last year in every single state, the median early childhood education wage fell below the living wage for a single These are the educators to whom this bill offers a $350 deduction.
▶ 1:52:20According to the Tax Foundation, and we should look at the broader tax policies of this committee, single teachers with two kids earning the average wage are paying about 20% of their salary in federal income and payroll taxes.
▶ 1:52:36Even before considering the corporate giveaways in the big ugly bill that this committee approved, a study of the experience over the first 5 years of the bad tax law approved in the first Trump term indicates that 55 of those corporations that got all the benefits, household names like Bank of America, General Motors, and Netflix paid an average rate of just 1.8% over 5 years, despite raking in nearly $670 billion
▶ 1:53:07in profits. So, what we have out of this committee, along with this $350 potential benefit for preschool teachers, is a policy where teachers, nurses, first responders are paying a much greater tax rate than some of the largest and most profitable corporations in the world, and the same applies to the ultra-rich who are not carrying their fair share for the cost of our national security.
▶ 1:53:35This tax code tells you everything that you need to know about Republican tax priorities, and it's not about a preschool teacher stocking their classroom out of their own paycheck. Over the last few months of the Trump administration, this has been accompanied by the slashing of child care assistance for college students and preschool development grants. Uh the Trump administration illegally uh proposed cutting $12 billion in Head Start funding.
▶ 1:54:05And Trump moved to freeze $10 billion in child care and social service funding for our most vulnerable families. Those are the true priorities. I'm glad there can be a tiny bit of assistance to preschool uh teachers, but this is not reflective of the policies that we need and hopefully will get after this year's election. Thank you. Mr. Kelly is recognized for 5 minutes. Thank you, Chairman.
▶ 1:54:32Uh this is an interesting piece, and uh my my wife is a second-grade teacher. My daughter taught in high school and then went on to uh uh helping people get into college is what she's doing now, but this is something that really uh I think we take things for granted. I was on the school board in Butler. And one of our principals gave me a book. He said, "Read this book." And I said, "What is this?" He said, "Well, look at the title. All I really need to know I learned in kindergarten." Uh so, people say, "Well, you know what, Kelly?
▶ 1:55:02Come on, quit screwing around. Here's what I would like. I wish we could put this in everything I needed to know I took to Congress. Key themes and lessons, fundamental morality, core tenants include sharing, playing fair, not hitting, saying sorry, and returning borrowed items. What an unusual concept. Practical wisdom. Lessons also focus on daily habits such as washing your hands, taking naps, and cleaning up one's own messes. Talking about cleaning up one's own messes, this is a body that could certainly look at what we've done in the past.
▶ 1:55:31Simple living, the essays promote living a balanced life, maintaining wonder, and appreciating simple pleasures like warm cookies and cold milk. At my age, that's a very important asset. Um, perspective. The book argues that the golden rule was the foundation for navigating complex adult issues like ecology, and relationships.
▶ 1:55:54Uses examples in context, personal reflection is it frequently used as a guide for mindful living and personal reflection, commonly cited for self-help and philosophical contemplation. Inspirational readings, the opening essay is famous and has been read on the floor of the US Senate. They should vote it to Congress, too, the House of Reps. Uh, making a popular choice for comments and inspirational gatherings, which we are certainly getting a lot of.
▶ 1:56:19Lesson structure, the text serves as a model for reflective writing where ordinary events are used to teach universal truths. My friend, Mr. Buchanan, has often said 25% of our population is youth, they're 100% of our future.
▶ 1:56:38When I look at how we spend money and what we invest in, are we investing in things that are great policy, or are we investing in things that are politically As a father of four, the grandfather of 10, I get calls from my grandchildren all the time. And so they start off just, just "Hey Grandpa." And what I respond very quickly is how much?
▶ 1:57:01What do you need Grandma or Grandpa to As people come to this body we hear from people quite a bit. And I know we are we all have busy days and we're in our offices and we are lined up with people who can come to see you. So I've gotten to the point I said, "You know what? I really appreciate you coming to see us. Tell me how much how it's going to be used and what is the return on the investment by hardworking American taxpayers?" I can't tell you how much I appreciate my friends bringing this forward by bringing this forward.
▶ 1:57:30If we don't recognize that the greatest asset we have are our children and their ability to get educated at a very early age and some of the things I pointed out we are really missed the boat. And I tell people all the time if you're really wondering who can make a change find a mirror. If you're a parent, if you're a if you're an uncle or an aunt if you just know children from their growing up in your neighborhood and how they how they've grown.
▶ 1:57:59I think it's becomes essential that some of the things we're doing we need to get back to the real basics of who we are as If we've forgotten that then we've learned absolutely nothing. So I would just say this I love the title I didn't go to but my wife had a second grade class and it was interesting to go and talk to So I would suggest this the 1986 best-selling collection of essays by Robert Fulghum that finds profound life wisdom in simple childhood lessons.
▶ 1:58:29All I really need to know I learned in kindergarten. But don't leave your education in Bring it home with you, bring it into your community, bring it into your state, bring it into your country and realize we are the most blessed nation in the world and when I hear people complaining about it I always respond this way, "That's interesting. You're really fed up with everything. Yes, you I really am." I said, "So, where are you moving to?" Nobody's leaving.
▶ 1:58:57We need to stop complaining and start putting our shoulder to the wheel. It is we are responsible for policy that is critical for the next generation and the generation after that. We live in a completely different world right now. We are in great danger. We need to wake up and understand that only by being the strongest nation in the world can we can continue to be the greatest contributor to anybody in the world who needs help. With that chairman, I I I yield back and I would hope I I I think all our colleagues feel the same. They all feel the same.
▶ 1:59:26We get caught up in this thing about it's a red, it's a blue, it's this, it's that. Let's you know what? It's up to us to do policy and it's up to us to make sure that we're ensuring for the next generation that they get the same blessings that we've had. There is no nation in the world that has been more blessed than the United States of America. Please quit complaining, make up your to-do list and do it in the right way. Thank you so much. I yield back. Thank you. Mr. Thompson is recognized for 5 minutes. Thank you, Mr. Chairman. Thank you for bringing this bill up.
▶ 1:59:55We should be doing everything we can to help the the teachers who educate our children and pave the way for an a successful future for them and I'd like to yield the balance of my time to Ms. DelBene. Thank you, Mr. Thompson. Um early childhood educators are among the most important and yet the least recognized members of our education system.
▶ 2:00:20Every day they provide the care, stability, and early learning experiences at some of the most formative moments in shaping our kids' development long before they enter kindergarten. And like our K-12 teachers, they frequently reach into their own pockets to purchase classroom materials and supplies to create safe, nurturing learning environments.
▶ 2:00:42Current law allows a modest above-the-line deduction of up to $350 to help offset out-of-pocket expenses incurred by elementary and secondary school teachers who use their own money to purchase classroom supplies. But the educators working with our youngest learners, infants, toddlers, and preschoolers are excluded from the benefit despite also being an integral part of our educational workforce. This bill solves that issue.
▶ 2:01:11It extends the existing teacher expense deduction to early childhood educators, recognizing them as the professionals they are, and slightly easing this financial strain. Providing this deduction will not solve every challenge facing our child care system, but it is a meaningful step toward letting the workforce that keeps it running know that they are valued. We still have to do more. Educators across the country are underpaid and undervalued.
▶ 2:01:41School buildings are deteriorating. Students are falling behind um internationally. And this administration has cut grants to schools and gutted the Department of Education. If we want the next generation to succeed, we must invest in our kids, our teachers, and our education system. This bill is a step in the right direction, and we must do more to set our kids and educators up for success. We can start here today, but we need to keep that going.
▶ 2:02:10I urge my colleagues to join me in supporting this common sense measure, and I yield Mr. Larson is recognized for 5 minutes. Uh thank you, Mr. Chairman. Uh first, let me uh commend uh Representative Fitzpatrick and Representative uh Panetta for this uh legislation. It's outstanding, and I want to associate myself with the remarks of Mr.
▶ 2:02:38early on in my career, I had a great opportunity to work with uh Dr. Edward Uh Dr. Zigler uh founded and was part of the center for Yale Center for Child Development and Social Policy. He is commonly referred to as the father of Head Start. And what Dr.
▶ 2:03:01Zigler's work helped do is bring attention to what happens to children between birth and going to kindergarten and the developmental stages that they go through. So, it kind of aligns itself in what Mr. Kelly was talking about earlier as as well.
▶ 2:03:24And it makes this work especially not only for the teachers in our system, but also for the parents that are while they have to work one and two jobs and to find child care for their children.
▶ 2:03:45Zigler's concept was why don't we utilize existing public on bus routes that are safe, can already been constructed, and a way in which parents would have the notion that their kids were being taken care of.
▶ 2:04:07And with studies, and also with the appropriate and I say academic even for a 1-year-old, uh is vitally important. So, I want to commend both Mr. Panetta and Mr.
▶ 2:04:30Fitzpatrick for their for their And I'll also add that uh I think it would be important for this committee as well to take up Mr. Affordability Act because uh the SEED Act uh is preserved in that and as several of you have noted on both sides it needs to be enhanced.
▶ 2:04:57We need to make sure that uh teachers who are reaching into their own pockets to pay for things that uh uh will only help and assist future generations is something we should grasp uh together. So, I want to commend Jim Panetta and I want to con- commend our colleague Mr. Fitzpatrick and Kelly and uh Mr. Thompson and hopefully we can all work together to get this done. I yield back. Mr.
▶ 2:05:27Davis is recognized for 5 minutes. Thank you, Mr. Chairman. I'm with Strike to Last Word. As a former teacher I certainly support this bill before us But I also take the opportunity to raise the failure of Republican leadership to engage in its responsibility of The rule that the House will vote on today will yet again block resolution of inquiry to get basic
▶ 2:05:58from the administration about the illegal delaying of state's child care about the DOJ leaking of extremely confidential social security information and about what DOJ did with every American worker's personal in the national database of new hires. Actively hiding this information from and the American public is deplorable.
▶ 2:06:29The move to squelch transparency of the harm done by the Trump reflects undemocratic values, further abnegation of the responsibility to govern, and collusion with the president whose is to foment hate and division, harming those whose experiences dis- disaster and need aid, simply because they may disagree
▶ 2:06:59with him politically. I support this bill, and you're back the balance of my time. Ms. Moore is recognized for 5 minutes. Thank you so much, Mr. Chairman. I I move to strike the last word. this, you know, the debate is over. It it it is over. Birth through three is where it's at.
▶ 2:07:30And if we don't educate, if we don't look at educating our future workforce in a serious manner, um uh we are going to find ourselves sort of behind the eight ball in terms of being able to produce the best and brightest brightest and most talented person. We cannot um I I associate myself with Mr. Doggett's comments.
▶ 2:07:55We just cannot afford to start publicly funded education, whether it's in private schools or public schools or charter schools, uh at 6 years old. That's really, really late to be doing that. I want to associate myself with the comments of Mr. Larson um and Mr. Kelly.
▶ 2:08:18Um we, you know, according to a Joint Economic Committee uh testimony that we had just last week, we're spending $1 on our children and $5 on seniors. And while I think it's extremely important to support our senior citizens, we will pay dearly in terms of our economic stability by on our children.
▶ 2:08:46It is an investment and we've heard that today. It's an investment that we cannot afford to Mr. Doggett talked about the low teacher pay. And just let me tell you, it's not only the low teacher pay, but parents. Parents are required in these days and times to bring paper, pencils, toilet paper to school because of the dearth of funding in our school system.
▶ 2:09:16Not only that, I don't know a teacher, including my daughter, that doesn't show up practically every weekend at the Dollar Tree or Dollar General buying supplies for their kids. I'll never ever ever forget the day that when I served in the State Senate, I showed up at an elementary school and had a taxi cab outside waiting to take me to the airport when a teacher ran to the taxi cab to stop me to
▶ 2:09:46verify that I was indeed a State Senator. I said, "Oh, yeah, I'm a State Senator." And she looked at me and said, can you donate a ream of paper to my I mean, this is very serious, people. And so, while we're looking at balancing budgets and, you know, accounting up our our dollars and making that are immediate, we will suffer tremendously. This is a really good start.
▶ 2:10:16But please understand that $300 to our teachers is a first step and only a first step and I would thank you for recognizing me Mr. Chairman and I would yield back. The gentlewoman yields back. Are there others wishing to strike the last word?
▶ 2:10:37Seeing none, are there any amendments to the amendment in the nature of a Mr. Chairman, I reserve a point of Are there any amendments? Seeing none. If there are no further amendments, the question is on the adoption of the amendment in the nature of a substitute. All those in favor signify by saying I. I.
▶ 2:11:07Those opposed, no. No. In the opinion of the chair, they the eyes have it and the amendment in the nature of a substitute is agreed to. We'll now recognize Mr. Buchanan for the purpose of offering a motion. Mr. Chairman, I move the committee favorably HR 5334 as amended to the House of Representatives. Question is on the motion to favorably report HR 5334 as amended to the House of Representatives. The clerk will call the roll. Mr. Buchanan. Yes. Mr. Buchanan.
▶ 2:11:37Yes. Mr. Smith of Nebraska. Mr. Smith of Nebraska. Yes. Mr. Kelly. Mr. Kelly. Mr. Schweikert. Mr. Schweikert. Yes. Mr. LaHood. Yes. Mr. LaHood. Mr. Arrington. Mr. Estes. Yes. Mr. Estes. Yes. Mr. Smucker.
▶ 2:12:13Mr. Hern. Mr. Hern. Yes. Mrs. Miller? Yes. Mrs. Miller? Dr. Murphy? Yes. Dr. Murphy? Yes. Mr. Custoff? Yes. Mr. Custoff? Yes. Mr. Fitzpatrick?
▶ 2:12:30Yes. Mr. Fitzpatrick? Yes. Mr. Steube? Mr. Steube? Yes. Ms. Tenney? Ms. Tenney? Mrs. Fischbach? Yes. Mrs. Fischbach? Yes. Mr. Moore? Yes. Mr. Moore? Yes. Ms. Van Duyne? Mr. Feenstra? Yes. Mr. Feenstra? Yes. Ms. Malliotakis? Ms. Malliotakis? Yes.
▶ 2:13:00Mr. Carey? Yes. Mr. Carey? Yes. Mr. Yakym? Yes. Mr. Yakym? Yes. Mr. Miller? Yes. Mr. Miller? Yes. Mr. Bean? Yes. Mr. Bean? Yes. Mr. Moran? Yes. Mr. Moran? Mr. Neal? Yes. Mr. Neal? Yes. Mr. Doggett? Mr. Doggett? Yes. Mr. Thompson?
▶ 2:13:31Mr. Larson? Mr. Larson? Yes. Mr. Davis? Yes. Mr. Davis? Yes. Ms. Sanchez? Ms. Sanchez? Yes. Ms. Sewell? Ms.
▶ 2:14:01Sewell? Yes. Ms. DelBene? Ms. Chu? Yes. Ms. Chu? Yes. Ms. Moore? Ms. Moore? Yes. Mr. Boyle? Mr. Boyle, yes. Mr. Beyer. Mr. Evans. Yes. Mr. Evans, yes. Mr. Schneider. Yes. Mr. Schneider, yes. Mr. Mr. Panetta, yes.
▶ 2:14:31Mr. Gomez. Mr. Horsford. Mr. Horsford, yes. Ms. Plaskett. Ms. Plaskett, yes. Mr. Suozzi. Mr. Suozzi, yes. How was Mr. Thompson recorded? Mr. Thompson is not recorded. Aye. Mr. Thompson, yes. How was Ms. Van Dyne recorded? Ms.
▶ 2:15:01Van Dyne is not recorded. Ms. Van Dyne, yes. How was Ms. DelBene recorded? Ms. DelBene is not recorded. Ms. DelBene, yes. How was Mr. Arrington recorded? Mr. Arrington is not recorded. Mr. Arrington, yes. Mr. Smucker. Mr. Smucker, yes. Mr. Beyer.
▶ 2:15:33Mr. Gomez. Chairman Smith. Yes. Chairman Smith, yes.
▶ 2:16:13The clerk will will report the bill. Mr. Chairman, the yeses are 43 and the no's are zero. There being 43 eyes and no nays, the motion is agreed to and H.R. 5334 as amended is ordered favorably reported to the house. Without objection, I ask that staff be authorized to make technical and conforming changes to H.R. 5334 and that members have two additional days to file with the committee clerk supplemental additional descending or minority views.
▶ 2:16:45Our next order of business is H.R. 7971, the Taxpayer Experience Improvement Act introduced by Oversight Committee Chairman Schweikert and Representative Beyer, which will make the IRS more user-friendly for taxpayers and provide for more transparency from the agency, including better access to updates regarding the status of refunds and more detailed information about agency efforts to be responsive. Oversight Committee Chairman Schweikert is a vocal champion of using innovative technologies to improve government reform efforts.
▶ 2:17:13While some are hesitant to engage with new technology, Representative Schweikert is always pushing the government to modernize for the benefit of American taxpayers. I urge my colleagues to support this bill. I'm pleased to recognize the gentleman from Arizona, Mr. Schweikert, for an opening statement.
▶ 2:17:28Thank you, Chairman Smith. and and committee members, um this one's actually fairly simple and I appreciate Mr. Beyer joining me in this. Um a number of you have referred to this as the dashboard bill. That's just part of it. But the ability to log on, see where your refund is in the process. The technology exists. It's just the ability for the public to access that technology.
▶ 2:17:55Um it also has a series of encouragements to adopt the very things that other agencies and private business do. So, you can, you know, call in, get information, and the ability to use technology is part of the backbone. Look, um we have some data that says about 23% of the software is 25 to 64 years old in the backbone of the IRS.
▶ 2:18:25you know, 33 Here Here's a a factoid. About 33% of the IRS information technology, it's IT applications, decades and decades and decades old. We're just trying to provide the path to modernize how the agency interacts with the taxpaying public to make that information of your taxes much more accessible.
▶ 2:18:55And this should be everything from what you can see online to the use of a telephone. And with that, I yield back. Gentleman yields back. I now recognize rank Ranking Member Neal for his opening statement. Thank you, Mr. Chairman. Let me recognize and yield my time to the gentle lady from Alabama, Ms. Sewell. I move to strike the last word. Mr. Chairman, as the Ranking Member of the Oversight Subcommittee, I have been troubled by the current leadership at the IRS.
▶ 2:19:22We are in the middle of tax filing season, and we cannot get basic information from the IRS about millions of taxpayers who have received notices of their refunds being delayed. My colleague, Danny Davis, and I have sent a letter to the IRS on March 10th, a copy of which has already been submitted to the record.
▶ 2:19:44The letter demands answers after seeing evidence that President Trump's executive order mandating the electronic payment of tax refunds has created massive delays for taxpayers who need and deserve their Every week, 300,000 more taxpayers receive notices that their refunds will be delayed for up to 10 weeks.
▶ 2:20:11Meanwhile, Secretary Bassitt um refuses to respond to our request for basic information to help our constituents. It's unacceptable. The secretary needs to provide that Taxpayers deserve to have leadership at the IRS that they can trust.
▶ 2:20:31So, I hope that Secretary Bassitt responds to our letter immediately and takes steps to quickly address the massive massive refund delays created by Trump's executive order. Now, while I must continue to focus, I think we must continue to focus on addressing leadership issues at the IRS, I am also supportive of this bill, the Taxpayer Experience Improvement Act.
▶ 2:21:00The dashboard mandate mandated in this bill will provide much-needed transparency for taxpayers. Moreover, by requiring electronic access for taxpayers to get information about their returns and refunds, we can improve the customer experience for millions of Americans.
▶ 2:21:20Let's increase transparency and accountability at the IRS by passing this bill, while also holding leadership at the IRS accountable and demanding answers for millions of taxpayers impacted by Donald Trump's executive order. Mr. Chairman, I would like to submit for the record the opening remarks of uh Don Without objection, so ordered.
▶ 2:21:49Thank you, and I yield back the balance of my Thank you. The committee will now proceed to consideration of HR 7971, the Taxpayer Experience Improvement Act. Without objection, the measure will be considered as read and open for amendment at any point. At this time, an amendment is offered in the nature of a substitute, which was distributed distributed in advance along with a green sheet explaining it. Without objection, the amendment in the nature of a substitute shall be considered as read, open for amendment at any point, and considered base text for the purpose of amendment.
▶ 2:22:19We'll now turn to Tom Barthold, chief of staff for the Joint Committee on Taxation to provide a technical description of the amendment in the nature of a substitute with an emphasis on the changes made since introduction. I ask that members hold their questions until after his presentation. Mr. Barthold. Mr. Chairman, the committee members have before them two Joint Committee documents, JCX 7, which describes the underlying legislation, and JCX 13 on green sheet, which provides a description of the chairman's amendment in the nature of a substitute.
▶ 2:22:47The underlying legislation uh uh provides uh largely for three things in terms of modernizing uh towards the taxpayer experience. Directs the Secretary of the Treasury to provide on the IRS website real-time information regarding calls to IRS helplines, including such information as wait time, the availability of callback service. This particular provision would be effective 12 months after the date of enactment.
▶ 2:23:14So, were it enacted by July 1st, it would be effective July 1st of Uh in addition, the underlying legislation uh directs that access to information on return status and refund status be provided uh through the IRS uh uh website. This provision would be effective on January 1st of the first year more than 12 months after the date of enactment.
▶ 2:23:41So, were this uh uh legislation enacted during this session of Congress, this would be effective as of January 1st of 2028. And then lastly, the legislation provides um uh for a system for any tax for the IRS to create a system for any taxpayer to review returns, notices that they may have received, documents, and also to upload documents uh and make payments through uh a web uh a web-enabled system.
▶ 2:24:11This provision would be effective January 1st of the first year 18 months or more after the date of enactment. So, depending upon when it were enacted during this session of Congress, it would be effective either January 1st of 2028 or January 1st of 2029.
▶ 2:24:29The chairman's amendment in nature of substitute makes uh a clerical correction to some of the underlying Uh the Joint Committee staff has estimated that this legislation would have no revenue effect uh on the on federal receipts. That uh concludes my brief description. Be happy to uh answer any questions that the members might Thank you. Are there any technical questions about the amendment in the nature of a substitute? Seeing none, does anyone wish to strike the last word?
▶ 2:25:01Ms. Moore is recognized for 5 minutes. Thank you, Mr. Chairman, and I won't take 5 minutes. I just have a comment that once again we're dealing with the great bipartisan bill. And and I appreciate the members for bringing it forward today.
▶ 2:25:20And I do have a, you know, a sort of a a suggestion or uh of the the the chairman and the ranking member of the subcommittee um with regard to future uh taxpayer experience improvements. You know, I met with a group of of uh of tax return specialists.
▶ 2:25:45And they were concerned that at as of 2011, the IRS had turned off a debt indicator or debt meter so that taxpayers would know uh prior to filing their taxes that they uh were going to be assessed uh because of some back taxes that they owed or other things and not uh being surprised when they get their taxes that indeed they were
▶ 2:26:15they were that there was um um that they had excessive taxes owed uh and not being warned. Warned in uh in in in a In fact, Mr. Barto, can I ask him a We passed that point.
▶ 2:26:35We are we have passed that point. Well, I just want him I don't know what you call this a debt meter, but it's something that I don't think provides uh any uh dang to uh receipts. It's just simply a matter of the IRS turning back on. You know, Mr. Swacard, I would you Mr. Chairman, would the gentlewoman yield for a quick comment? Yeah.
▶ 2:26:57Yes. I actually believe the dashboard
▶ 2:26:59The dashboard. as we have discussed it will actually provide that data. And with that give the woman gentlewoman her time Thank Thank you, Mr. Swacard. I'm going to miss you so much. Um that's the the the debt dashboard.
▶ 2:27:15Uh and they say that this is really providing a crisis to people cuz people you know, filling up their credit card, you know, thinking that they're going to get a $4,000 return only to find out that uh that this information had not been provided to them as it had been done in subsequent years. And so, with that uh I would yield back. Gentlewoman yields back. Are there any amendments to the amendment in the nature of a substitute? Seeing none.
▶ 2:27:45The question is on agreeing to the amendments. Excuse me. If there are no further amendments, the question on the adoption of the amendment in the nature of a substitute. All those in favor signify by saying I. Those opposed, no. In the opinion of the chair, the eyes have it and the amendment in the nature of a substitute is agreed to. I will now recognize Mr. Buchanan for the purpose of offering a motion. Mr.
▶ 2:28:10Chairman, I move the committee favorably report HR 7971 as amended to the House of Representatives. Question is on the motion to favorably report HR 7971 as amended to the House of Representatives. Clerk, call the roll. Mr. Buchanan. Mr. Buchanan. Mr. Smith of Nebraska. Yes. Mr. Smith of Nebraska. Yes. Mr. Kelly. Mr. Kelly. Yes.
▶ 2:28:41Mr. Schweikert. Mr. Schweikert. Mr. LaHood. Yes. Mr. LaHood. Yes. Mr. Arrington. Mr. Arrington. Yes. Mr. Estes. Mr. Estes. Yes. Mr. Smucker. Mr. Smucker. Yes. Mr. Hern. Yes. Mr. Hern. Yes. Mrs. Miller. Mrs. Miller. Yes. Dr. Murphy. Dr. Murphy. Yes. Mr. Kustoff.
▶ 2:29:12Mr. Kustoff. Yes. Mr. Fitzpatrick. Yes. Mr. Fitzpatrick. Yes. Mr. Steube. Mr. Steube. Yes. Ms. Tenney. Ms. Tenney. Yes. Mrs. Fischbach. Yes. Mrs. Fischbach. Yes. Mr. Moore. Ms. Van Dyne. Mr. Feenstra. Yes. Mr.
▶ 2:29:41Feenstra, yes. Ms. Malliotakis. Ms. Malliotakis, yes. Mr. Carey. Yes. Mr. Carey, yes. Mr. Yakym. Mr. Yakym, yes. Mr. Miller. Yes. Mr. Miller, yes. Mr. Bean. Mr. Bean, yes. Mr. Bean, yes. Mr. Moran. Yes. Mr. Moran, yes. Mr. Neal. Yes. Mr. Neal, yes. Mr. Doggett.
▶ 2:30:11Mr. Thompson. Yes. Mr. Thompson, yes. Mr. Larson. Yes. Mr. Larson, yes. Mr. Davis. Yes. Mr. Davis, yes. Ms. San- Ms. Sanchez. Ms. Sanchez, yes. Ms. Sewell. Ms. Sewell, yes. Ms. DelBene. Yes. Ms. DelBene, yes. Ms. Chu. Yes. Ms. Chu, yes.
▶ 2:30:42Ms. Moore. Yes. Ms. Moore, yes. Mr. Boyle. Yes. Mr. Boyle, yes. Mr. Mr. Evans. Yes. Mr. Evans, yes. Mr. Schneider. Yes. Mr. Schneider, yes. Mr. Panetta. Yes. Mr. Panetta, yes. Mr. Mr. Horsford. Yes.
▶ 2:31:13Mr. Horsford, yes. Ms. Plaskett. Ms. Plaskett, yes. Mr. Suozzi. Yes. Mr. Suozzi, yes. Mr. Moore. Mr. Moore? Miss Van Dyne. Miss Van Dyne? Yes. Mr. Doggett. Yes. Mr. Doggett? Yes.
▶ 2:31:45Mr. Beyer. Mr. Gomez. Chairman Smith. Chairman Smith? Yes.
▶ 2:32:17The clerk will report the vote. Mr. Chairman, the yeas are 43 and the nays are zero. There being 43 ayes and zero nays, the motion is agreed to and H.R. 7971 as amended is ordered favorably reported to the House. Without objection, I ask that staff be authorized to make technical and conforming changes to H.R. 7971 and that members have two additional days to file with the committee clerk supplemental, additional, dissenting, or minority views.
▶ 2:32:46Our next order of business is H.R. 7959, the IRS Whistleblower Program Improvement Act, introduced by Tax Subcommittee Chairman Kelly and Ranking Strengthening this program, including improved privacy protections and swift payments for whistleblowers, will not only be a win for those who have the courage to report tax fraud, but also better protect against such fraud, tax evasion, and other crimes involving the US tax code.
▶ 2:33:10Tax Committee Tax Subcommittee Chairman Kelly has had a long-standing commitment to helping reform and improve the IRS Whistleblower Program, and during a Congress where this committee has prioritized passing anti-fraud legislation. We appreciate Chairman Kelly's focus on passing these important reforms. I certainly urge my colleagues to support this bill. Please to recognize the gentleman from Pennsylvania, Mr. Kelly, for an opening statement. Uh thank you, Mr. Chairman, for bringing this bill before the committee. I also want to thank my counterpart in tax subcommittee, Mr. Thompson.
▶ 2:33:40We work very well on these issues, and he his leadership has been my Republican colleagues on the committees, uh Chairman you, Mr. Smith, Ms. Miller, and Mr. Mr. Moran, appreciate your partnership. The IRS whistleblower program and proven act builds on a proven program that delivers results for taxpayers. Now, since its modernization, the program has generated billions in recovered revenue, including more than 7 and 1/2 billion dollars.
▶ 2:34:09The program strengthens tax administration by giving the IRS access to information it would not otherwise obtain. Whistleblowers play an essential role in upholding the integrity of our tax laws. When individuals come forward to expose wrongdoing by tax cheats and fraudsters, they help ensure our voluntary with the key of this is a voluntary tax system remains fair for all Americans.
▶ 2:34:32Whistleblowers help the IRS target enforcement resources toward high-value cases, improving efficiency and accountability across the system. This bill reinforces the program's foundation with targeted practical updates by ensuring courts consider a full record and apply meaningful oversight to IRS determinations, recognizes the risks that whistleblowers take when they come forward by establishing a presumption of anonymity in tax court, encourages timely administration from the IRS
▶ 2:35:02by requiring the payment of interest on delayed awards, strengthens transparency and oversight by improving reporting to Congress and allows the administration review of award determinations. These reforms keep the program focused, predictable, and effective, ensuring a fair shake for all of our taxpayers in what has come down to.
▶ 2:35:24I want to thank the National Whistleblower Center, Empower Oversight, Taxpayers Against Fraud, and other organization who have spoken out in in support of this. I urge my colleagues to support this bill. Thank you, and I recognize Ranking Member Neal for his opening statement. Thank you, Mr. Chairman. Let me yield my time to Mr. Thompson. Mr. Thompson is recognized for Thank you, Mr. Neal, and thank you, Mr. Chairman, and thank you, Mr. Kelly, for working together with me on this bipartisan bill.
▶ 2:35:55Let's be honest about where we are right now. We ask Americans to comply with one of the most complex tax systems in the world. We expect them to report accurately, pay on time, and follow the rules to the letter. But at the same time, we know there are individuals and entities who exploit that complexity to cheat the system, and sadly, too often, they get away with it.
▶ 2:36:21And right now, the IRS is not in a position to catch all the scofflaws and cheaters. Between massive cuts to enforcement and the loss of experienced staff, enforcement capabilities are stretched, and that's just the reality. So, whether we say it out loud or not, we're increasingly relying on whistleblowers to fill that gap. People on the inside, people who see fraud, people who are willing to step forward.
▶ 2:36:51If that's the system we're operating under, then it has to be a system that actually works. Right now, it doesn't always work. Whistleblowers face uncertainty, delays, and in some cases, real personal and professional risk. That's not how you encourage people to step forward. This bill fixes that. It protects whistleblowers privacies.
▶ 2:37:16If someone is exposing tax fraud, they should not have to fear retaliation or public exposure just to be heard. It brings real fairness to the process. We're making clear that whistleblowers get a full and independent look at their claims, not just a rubber stamp of prior decisions. And it deals with delays head-on. When the government drags its feet, whistleblowers should not be the ones paying the price.
▶ 2:37:46Providing interest on delayed awards is not generous. It is basic fairness. And let's step back for a second. This is not about expanding government. This is about making sure that the rules we already have on the books are actually enforced. Because when tax cheats get away with it, everyone else pays more or gets less.
▶ 2:38:10And when whistleblowers are ignored, discouraged, or exposed, fewer people will step forward the next time That's how you undermine confidence in a system. If we want a tax system that's fair, we need enforcement that's credible. And if enforcement is going to depend in part on whistleblowers, then we need to treat them like they matter. This bill does exactly that.
▶ 2:38:37I support it, and I urge my colleagues to do the same, and I yield back. Thank you. We'll now proceed to the bill. Without objection, the measure will be considered as read and open for amendment at any at any point. Uh Ms. Moore. I have a unanimous consent request. Okay. Uh let let's What is that request?
▶ 2:39:00Uh I just simply want to during my uh soliloquy on um HR 2347, I included numbers of letters. And one letter I submitted I did not publicly disclose was from the YWCA USA. So, I just want to enter it into the record that they sent a letter of support for HR 2347. Without objection, so ordered. Thank you.
▶ 2:39:27We will now proceed at this Without objection, the measure, the IRS Whistleblower Program Improvement Act, HR 7959, will be considered as read and open for amendment at any point. This time, I offer an amendment in the nature of a substitute which was distributed in advance along with a green sheet explaining it. Without objection, the amendment in the nature of a substitute shall be considered as read, open for amendment at any point, and considered base text for purpose of amendment.
▶ 2:39:57We'll now turn to Mr. Tom Barthold, Chief of Staff of the Joint Committee on Taxation, to provide a technical description of the amendment in the nature of a substitute with an emphasis on the changes made since introduction. I ask that members hold their questions until after his presentation. Mr. Barthold. Mr.
▶ 2:40:14Chairman, the committee members have before them three joint committee documents, JCX 8, which describes the underlying legislation, JCX 9, which provides the staff's estimated budgetary effects of the legislation, and JCX 14 on the green sheet, which provides a description of the chairman's amendment in the nature of a substitute. This legislation provides new rules for whistleblower petitions to the tax court for review of whistleblowers awards.
▶ 2:40:44And it provides that the tax court review is de novo with the scope limited by the administrative record and supplemented by newly discovered or previously unavailable materials. The chairman's amendment in the nature of a substitute clarifies that with respect to the uh tax court reviews, that the proceedings may at the election of the whistleblower be anonymous.
▶ 2:41:10These provisions would be effective for petitions pending on or after the date of enactment. So, currently uh potentially currently pending petitions before the tax court. The legislation as amended also corrects uh the limitation on the deductibility of attorney's fees that whistleblowers may incur uh to it uh to uh those related to mandatory awards, uh the chairman's amendment provides that the deductibility
▶ 2:41:41of attorney fees will also apply to discretionary awards. This provision would be effective for taxable years after the date of enactment. Um as I noted, JCX-9 uh reports the staff's estimated uh budgetary effects of a revenue loss of $44 million over the budget period 2026 through Uh that concludes my brief description of this legislation. Be happy to answer any questions that the members might have. Thank you.
▶ 2:42:10Are there any technical questions about the amendment in the nature of a substitute? Mr. Doggett is recognized for 5 minutes. Thank you very much for your explanation. As I understand uh from Mr. Thompson's comments, the goal here is credible enforcement of our tax laws. All right. I I believe Mr. Thompson's goal.
▶ 2:42:29And Uh with regard to that enforcement, am I correct that this bill does nothing uh to restore the IRS workforce that has been decimated by all the cuts uh that have been imposed on it for enforcing our tax laws? All right. That That's correct, Mr. Doggett. There are are no funding changes.
▶ 2:42:49This only relates to uh private whistleblowers, people that say might be in a large corporation, discover that that corporation is stealing from the Treasury and exposes them and gets part of the reward for doing that. Uh it applies to any any whistleblower regardless of their occupation or employer or whether they're retired. And uh since the gold then is to get more revenue into uh the Treasury, I assume.
▶ 2:43:19I I well, goal is to help with enforcement uh and to uh ensure fair treatment for the whistleblower.
▶ 2:43:28question I have is uh given uh that the gold is fair treatment, encouragement of whistleblowers when they see criminal uh and thereby enforcing the law, you get more revenue to the Treasury, why it is that this bill actually cost money instead of raising revenue? Uh well, on uh remember, Mr. Doggett, that we are uh we estimate the cash flow to the to the Treasury.
▶ 2:43:58Uh so, a couple of factors in terms of the uh the losses. Uh the first loss is related to uh tax court review of whistleblower awards. By enabling uh the whistleblower uh to make a petition to the tax court and expanding the tax court's review of of that beyond just abuse of uh the current currently a tax court review is limited to abuse of discretion within the whistleblower office.
▶ 2:44:28So, broadening the tax court's review potentially means the tax court will uh in a number of cases will say uh will the award was too small. And so, our estimate here is that there will be somewhat larger awards to whistleblowers. So, even if uh uh with no change in whistleblower uh uh information that's provided leading to improved enforcement, improved collection.
▶ 2:44:56The awards that might be made, so the outlays from the Treasury will go will go up. The second factor relates to the deductibility of, uh, attorney's fees that may be, uh, that may, uh, that a whistleblower may uh, may incur. Uh, currently, some might describe it as a, uh, glitch. The, uh, language of the statute limits deductibility of attorney fees to uh, whistleblower awards that are mandatory.
▶ 2:45:26This would, uh, say that attorney's fees can also be deducted relative to discretionary awards that are are made. So, that's an increase in deduction against income by a whistle, uh, whistleblower, and that's another factor in the revenue loss losses.
▶ 2:45:43We also do recognize that this might improve, uh, might improve, uh, IRS enforcement overall collections, but the, uh, net, uh, net effect we saw as being swamped by the two factors that I just
▶ 2:45:58So, you can't tell whether it will really increase the amount of revenue flowing in. Uh, just looking overall at the whistleblower program, uh, the IRS has reported that we have a tax gap of about $606 billion a year, and I believe the history is that the whistleblower program as currently constituted raises about $400 million per year over its lifetime.
▶ 2:46:23So, it's the gap is about 150 times bigger than the amount raised through the whistleblower program. A good program, but a modest contribution. you I I I, uh, I'm not I I do not know the specifics that you cited, Mr. Doggett, I have no reason to to doubt them. The program, whistleblower program, is relatively It is true is relatively modest relative to the IRS's estimates of tax gap.
▶ 2:46:53I would remind members to limit their inquiries to technical matters and rhetorical matters can be taken up during the strike the last word. Any other members wishing to ask a technical question? Seeing none, uh we now move to strike the last word. You take it up now. Uh Mr. Moran is recognized for 5 minutes. Thank you, Mr. Chairman. I'd like to share my strong support for H.R. 7959, the IRS Whistleblower Program Improvement Act.
▶ 2:47:21It's common-sense, bipartisan legislation to restore accountability and effectiveness to one of the one of the federal government's most important tools for enforcing our tax Let's start with the basic principle. In East Texas, we believe in playing by the rules, whether on the football field or in life. Families, farmers, and small business owners work hard, pay what they owe, and expect everyone else to do the same. But when bad actors abuse the system, when they hide income or evade taxes altogether, that burden does not disappear.
▶ 2:47:53It gets shifted onto the backs of honest Americans. That's where the IRS Whistleblower Program comes in. For years, this program has empowered individuals with first-hand knowledge of tax fraud to come forward, and it works. Whistleblowers have helped the federal government recover billions of dollars that would have otherwise been lost to fraud and abuse. But here's the problem. The program does have some broken parts.
▶ 2:48:17Right now, whistleblowers wait decades sometimes, or at least a decade or longer, to just to receive the compensation that they are legally entitled to. That kind of delay doesn't just hurt whistleblowers, it discourages people from coming forward in the first place, and certainly discourages people in the future from coming forward. When fewer people step forward, fewer tax dodgers get caught. That means less revenue collected and more pressure on live by live-abiding taxpayers. HR 7959 fixes that.
▶ 2:48:46This bill introduces practical targeted reforms to make the whistleblower program actually work the way Congress originally intended. First, it promotes timely payment by requiring the IRS to pay interest on awards that are unnecessarily delayed. That's just common sense. If the government expects taxpayers to pay interest when they're late, the government should play by the same rules and pay interest when they're late. Second, it strengthens due process protections for whistleblowers.
▶ 2:49:13It ensures that they have a fair opportunity to challenge decisions and have their cases reviewed by a court based on the facts, not just agency Third, it enhances confidentiality protections, helping safeguard the identity of whistleblowers who take personal and professional risks to report this wrongdoing. And finally, it addresses bureaucratic obstacles that have slowed the program down and reduced its effectiveness in recent years. Let's be clear, this is not about growing government.
▶ 2:49:40This is about making government work better and empowering private citizens. This bill doesn't create a new program, it fixes an existing one so it can do its job. Uncover fraud, enforce the law, and protect taxpayers. There's another important point. This is bipartisan legislation because holding tax fraudsters accountable should not be a Republican issue or a Democrat issue. It's an American issue. We should be doing everything we can to ensure that those who owe taxes actually pay them.
▶ 2:50:11Strengthening the whistleblower program is one of the most effective low-cost ways to do exactly that. In East Texas, we do not tolerate cutting corners or gaming the system. We believe in fairness, accountability, and responsibility. HR 79 reflects those values. It supports the honest taxpayer. It cracks down on fraud, and it helps to restore trust that our tax system is being enforced correctly. I'm proud to co-sponsor this legislation. I appreciate the work of Mr. Kelly and Mr.
▶ 2:50:40Thompson, and I urge my colleagues on both sides of the aisle to support it in this committee today. Let's fix what's broken. Let's reward integrity, and let's make sure the rules re- apply to everyone. Thank you, and I yield back. Are there other others wishing to strike the last word? Argett is recognized for 5 minutes. Thank you, Mr. Chairman. Uh like the other bills before us today, this bill deals with a sliver of a problem.
▶ 2:51:07And the sliver is demonstrated by the fact that uh the size of the tax gap, that is the gap between taxes taxes owed and taxes paid, is about 150 times per year bigger than the amount that this whistleblower program uh has been able to recover. I support uh the provisions in this bill, but they deal with a sliver of the issue.
▶ 2:51:32And in talking about what that issue is, we have to look at the record of this committee and this Republican Congress on tax enforcement. Of particular interest is a New York Times article entitled "Push to Audit Private Equity and Venture Capital Falters Under Trump." That was introduced when we met in January.
▶ 2:51:53It details how Republican cuts have caused the Internal Revenue Service to lose the ability to audit wealthy private equity and venture capital firms due to a severe lack of resources and expertise, with long-planned audits uh stalled or abandoned.
▶ 2:52:11In the last Democratic Congress, we took historic steps to give the Internal Revenue Service the resources that it needed to provide good customer service, to modernize its technology, and to begin to address this issue of large copper corporations and complex partnerships that are not complying with our tax laws.
▶ 2:52:33The report that I'm entering into the record today from the Institute on Taxation and Economic Enforcement uh is entitled IRS enforcement boost was supposed to last 10 years, Congress killed it in under three. That's a Republican Congress that killed it. Uh indeed, congressional leaders have eliminated nearly all of the IRA's uh $45.6 billion for new IRS high-tech enforcement funding.
▶ 2:53:03This funding has been abandoned through a series of legislative maneuvers and backroom deals here in the An account that was supposed to help close the gap between the wealthy households and profitable corporations owed and what they actually pay is effectively gone. A new report from the Inspector General for Tax Administration shows how these Republican cuts have gutted enforcement against large partnerships.
▶ 2:53:28In 2011, the Internal Revenue Service audited 2.7% of complex partnerships. Today, it's less than 1/10 of 1%. The IRS identified 483 large partnerships with major and their action, they didn't audit a single one because of quote resource This problem of the gap in public resources to address this problem cannot
▶ 2:53:59be made up by this minor change in private enforcement. And of course, all of this use of whistleblowers has to be considered against the record of this administration and its antipathy toward whistleblowers.
▶ 2:54:14Indeed, one of the first things that this administration did when Trump regime began was to fire the head of the Office of Special Counsel, the very official who was charged with protecting whistleblowers across the federal government. Then the administration went even further attacking those charged with defending whistleblowers by defunding the Council of Inspectors General on integrity and efficiency. That's the body that supports oversight across more than 70 inspectors general.
▶ 2:54:45It was defunded. And it didn't stop there. Uh indeed, uh we know that uh and Mr. Larson pointed this out earlier that a whistleblower in the Social Security Administration was who we counted on to disclose the exposure of sensitive data for Americans uh through Dodge.
▶ 2:55:06But that whistleblower was frozen out of meetings, cut off from communications, and prevented from doing his job until he ultimately resigned and filed a retaliation complaint. Similarly, at FEMA, more than 190 employees warned that changes to the agency could leave it to being unprepared for a major disaster. 30 signed their names publicly, and they were immediately placed on administrative leave.
▶ 2:55:32At the National Institutes for Health, two of the nation's top public health scientists filed whistleblower complaints. They're now facing retaliation. And of course, most recently, Joe Kent, the director of the National Counterterrorism Center, raised internal objections about the reckless war in Iran. Trump termed him weak on security. I suppose that's why he appointed him the director of National Counterterrorism Center.
▶ 2:55:58So I'm pleased we're taking this modest step, but we need broad protection and support for federal whistleblowers, and we need the IRS to have the resources it needs to enforce our tax laws so the burden is not shifted to the many American hardworking families and small businesses who are complying with our laws. I yield back. Does any additional member wish to strike the last word?
▶ 2:56:23Seeing none, are there any amendments to the amendment in the nature of a Seeing that there are no amendments, the question is on the adoption of the amendment in the nature of a substitute. All those in favor signify by saying I. Those opposed say no. In the opinion of the chair, the eyes have it and the amendment in the nature of a substitute is agreed to. I will now recognize Mr. Buchanan for the purpose of offering a motion. Mr.
▶ 2:56:50Chairman, I move the committee favorably reports HR 7959 as amended to the House of Representatives. The question is on the motion to favorably report HR 7959 as amended to the House of Representatives. The clerk will call the roll. Mr. Buchanan. Yes. Mr. Buchanan. Yes. Mr. Smith of Nebraska. Mr. Smith of Nebraska. Yes. Mr. Kelly. Mr. Kelly. Yes. Mr. Schweikert. Mr. Schweikert. Yes. Mr. LaHood.
▶ 2:57:22Mr. LaHood. Yes. Mr. Arrington. Mr. Arrington. Yes. Mr. Estes. Mr. Estes. Yes. Mr. Smucker. Mr. Hern. Mr. Hern. Yes. Mrs. Miller. Mrs. Miller. Yes. Dr. Murphy. Dr. Murphy. Yes. Mr. Kustoff. Mr. Kustoff. Yes.
▶ 2:57:52Mr. Fitzpatrick. Mr. Fitzpatrick. Yes. Mr. Steube. Mr. Steube. Yes. Miss Tenney. Miss Tenney. Yes. Mrs. Fischbach. Mrs. Fischbach. Yes. Mr. Moore. Mr. Moore. Yes. Miss Van Duyne. Mr. Feenstra. Mr. Feenstra. Yes. Ms. Malliotakis? Ms. Malliotakis? Yes. Mr.
▶ 2:58:22Carey? Yes. Mr. Carey? Yes. Mr. Yoho? Yes. Mr. Yoho? Yes. Mr. Miller? Yes. Mr. Miller? Yes. Mr. Bean? Mr. Bean? Yes. Mr. Moran? Yes. Mr. Moran? Yes. Mr. Neal? Mr. Neal? Yes. Mr. Doggett? Mr. Doggett? Yes. Mr. Thompson? Mr. Thompson? Yes. Mr. Larson? Yes. Mr. Larson? Yes. Mr. Davis?
▶ 2:58:53Mr. Davis? Yes. Ms. Sanchez? Ms. Sanchez? Yes. Ms. Sewell? Ms. DelBene? Hi. Ms. DelBene? Yes. Ms. Chu? Hi. Ms. Chu? Yes. Ms. Moore? Hi. Ms. Moore? Yes. Mr. Boyle? Hi. Mr. Boyle? Mr. Beyer?
▶ 2:59:24Mr. Evans? Yes. Mr. Evans? Yes. Mr. Schneider? Mr. Schneider? Mr. Panetta? Mr. Panetta? Yes. Mr. Gomez? Mr. Gomez? Yes. Mr. Horsford? Mr. Horsford? Yes. Ms. Plaskett? Ms. Plaskett? Yes. Mr. Swalwell? Mr. Swalwell? Yes.
▶ 2:59:56Mr. Smucker? Ms. Van Duyne? Ms. Sewell? Mr. Beyer? Chairman Smith? Yes. Chairman Smith? Yes.
▶ 3:00:34Clerk will report the vote. Mr. Chairman, the yeses are 41 and the noes are zero. There being 41 yeses and zero noes, the motion is agreed to and H.R. 7959 as amended is ordered favorably reported to the House. Without objection, I ask that staff be authorized to make technical and conforming changes to H.R. 7959 and that members have two additional days to file with the committee clerk supplemental, additional, dissenting, or minority views. There being no further business before the committee, the committee stands adjourned.