▶ 0:13:26The committee will come to order. Welcome to our markup of tax administration legislation. The Ways and Means Committee is dedicated to to improving the IRS for the benefit of taxpayers. To that end, we will consider seven bills that strengthen taxpayer protections, improve customer service at the IRS, and provide transparency regarding the questionable activities of certain taxexempt organizations.
▶ 0:13:55Several of the policies in these bills come as recommendations from the National Taxpayer Advocate, an independent office within the IRS charged with protecting taxpayer rights at one of the most feared federal agencies. Our first piece of legislation postpones tax deadlines for hostages and individuals wrongfully detained abroad.
▶ 0:14:19Upon their return home, these hostages could be greeted with a stack of bills from the IRS seeking to collect the income tax they owe from the time that they were detained abroad. That's not right. The IRS should not add insult to injury with demands for payment while these Americans were held in captivity.
▶ 0:14:43Representatives Tenny and Byer have introduced legislation that extends extends the deadlines for American Americans held hostage or wrongfully deta detained and their spouse. The next bipartisan bill introduced by representatives Max Miller and Sisi protects victims from taxation on the losses that they incur due to theft.
▶ 0:15:06Today, Americans face countless scams, and many victims may not find out that they have become the target of one until years later. Unfortunately, current tax rules require victims to pay tax on their scam related losses. This bill helps make taxpayers whole again by allowing them to deduct the losses incurred from scams.
▶ 0:15:30and if they discover they have become a fraud victim years after the fact, allowing them to file an amended return to receive a tax refund on those losses. We will next consider legislation from Representatives Stuie and Delben that strengthens the voice of taxpayers in court cases related to taxpayer rights.
▶ 0:15:50This legislation would allow the national taxpayer advocate to file amicus briefs in federal courts in support of fundamental taxpayer rights, particularly those contained in the taxpayer bill of rights. Next, we will look at legislation from Ways and Means Committee Vice Chairman Buchanan and Representative Horford that harnesses the power of artificial intelligence to identify fraudulent or inaccurate tax returns.
▶ 0:16:17AI could make the IRS workforce more efficient and ensuring the IRS is prepared to utilize this technology is important to the future of the agency. That's why this legislation creates a new pilot program for the use of AI and identifying tax returns to test the best approaches for keeping private information secure. Our next piece of legislation tackles fraud and tax preparation.
▶ 0:16:45Too many Americans have encountered so-called ghost tax preparers, shady businesses who, unbeknownst to the taxpayer, file income tax returns that appear as if the taxpayer prepared the return themselves. This illegal act can cause taxpayers to become entangled with the IRS through no fault of their own.
▶ 0:17:06This bill from Representative Maliotakus cracks down on these illegal operators and clarifies the tax law so innocent Americans deceived by these fraudulent tax preparers are not on the hook for assessments, taxes or penalties for the indefinite future.
▶ 0:17:24After we will consider legislation from oversight subcommittee chairman Schweiker that modernizes the IRS workforce by establishing a data scientist fellowship program that will help the agency solve complex tax administration problems and improve customer service at the IRS. Lastly, we will consider legislation that updates the form 990 schedule H, the annual disclosure form required of all US taxexempt hospitals.
▶ 0:17:54Committee hearings and investigations into hospital empires have made it clear that the 990 form in its current version is woefully inadequate and makes it possible for these entities to hide potential abuse of the tax code.
▶ 0:18:11Tax exempt hospitals who are supposed to care for needy patients at low cost are no charge in exchange for their lucrative tax break do not do not always reveal how much charity care is provided at each of their member hospitals. What we do know is taxexempt hospitals look less like hospitals and more like hedge funds.
▶ 0:18:35These multi-billion dollar tax taxexempt hospital empires engage in real estate and stock investments. They purchase stadium naming rights and even participate in political activism.
▶ 0:18:49The CEO of the nation's largest taxexempt hospital chain admitted to this very committee that his hospital empire invested $718 in equities along with paying $21 million in compensation to their previous CEO.
▶ 0:19:13If all this money is being spent on items unrelated to health care, Americans deserve to know how much charity care a taxexempt hospital provides to vulnerable patients. This bill introduced by Dr.
▶ 0:19:29Mur Murphy promotes more transparency by updating the 990 form so taxexempt hospitals share additional information to give taxpayers a clearer sense of how hospitals choose to take advantage of their generous tax benefits. Sunlight is the best disinfectant. If passed, I am hopeful many entities will be inclined to put more money into patient access through charitable care and less into self-promotion.
▶ 0:19:58I look forward to working with my colleagues to advance these bills out of committee and to the floor. I'm now pleased to recognize the ranking member from Massachusetts, Mr. Nil, for his opening statement.
▶ 0:20:07Thank you. As we consider another assortment of tax administration bills, tomorrow marks one year since our colleagues on the other side of the aisle cajjol the big ugly tax law over the finish line. Just yesterday, which is becoming a regular pattern in the House of Representatives, House Republicans can no longer even keep control of the House floor long enough to commemorate the big ugly law, which incidentally is polling right now at 34% with the American people in terms of favorability.
▶ 0:20:38Another failed birthday party, but what a fitting tribute for a failed law which has harmed already so many families. Our colleagues promise lower costs. that has not materialized. They promised prosperity that has not materialized. And they promised more money in people's pockets and that certainly has not materialized. Instead, families are paying more for groceries, housing, energy costs, and travel. Consumer confidence has hit all-time lows and economic growth has fallen well short of the rosy projections they touted.
▶ 0:21:09In fact, almost twothirds of the American people believe the country is headed in our the wrong direction. And while workers and families are being asked to stretch each paycheck, those at the very top are experiencing a completely different reality. Nowhere is that more clear than in our tax system, where at every turn, the Trump administration is showering the rich. Less scrutiny, more lenient rules, and certainly higher refunds. The American people deserve a tax system that is fair, functional, and has earned their trust.
▶ 0:21:37Right now, millions are worse off because the Trump administration shrunk the IRS workforce by nearly one-third. And even the taxpayer advocate has acknowledged that phone calls are going unanswered because of the cuts. There are not enough employees to open the mail, answer the phones, or assist taxpayers with their issues. People are left waiting for hours, if not days, and on the phone for months to get their refunds.
▶ 0:22:03On the other side of the spectrum, the president has secured a lifetime of never having to worry about IRS scrutiny again for himself. The administration can try to change the subject, but questions remain about this immunity agreement and the taxpayer funded slush fund, which is why Republicans should stand up and join us in making sure this can never happen.
▶ 0:22:25A fair tax system is the bedrock of democracy and depends on public confidence that everyone without regard to wealth or status is held indeed to the same standard. When the president can shield himself from IRS audits, confidence certainly erodess. Today's markup includes a handful of bills, but these bills cannot reverse how this administration has systematically weakened the IRS, undermined confidence in our tax laws, and further tilted the system once again to those at the very top.
▶ 0:22:54One year later, let the record reflect the promises that have evaporated and all that remains in their place are higher costs and clearly more dysfunction on the House floor, leaving the people wondering when the committee can start to address the problems on the hearts and minds of the American people. And with that, I yield back the balance of my time.
▶ 0:23:15Our first order of business is HR 9496, the N Tax Penalties on American Hostages Act introduced by Representatives Tenny and Byer, which extends tax filing deadlines for individuals who are unlawfully detained or held hostage abroad.
▶ 0:23:32Representative Tenny has been at the forefront of this effort to ensure Americans who are held hostage abroad are treated with respect when they return home and are not greeted on the tarmac with a tax bill. Last Congress, it was her legislation to provide fair tax treatment to Americans held hostage or wrongfully detained abroad that ultimately advanced to the House of Representatives.
▶ 0:23:59Previous legislation that would prevent the IRS from imposing fines and penalties on Americans held hostage also received unanimous approval in the Senate. This is as common sense as it comes. I appreciate Representative Tenny for keeping up this fight and I urge my colleagues to once again support this effort and I'm pleased to recognize the gentle lady from New York, Miss Tenny, for an opening statement.
▶ 0:24:23Thank you so much, Mr. Chairman. Uh, and thank you for having this hearing and and recognizing the very sensitive and difficult situation that some Americans unfortunately find themselves in. Uh, I had a constit I still have a constituent, a a man named Ryan Corbett, who was detained in a 9 by9 foot cell in Afghanistan for over two years. uh while his wife and children were were home alone, not knowing what the outcome would be.
▶ 0:24:47Uh miraculously, uh Ryan was able to be released on January 20th uh 2025, literally the evening of President Trump's inauguration. Uh we are grateful to everyone for that. But during this time period, people like like Ryan Corbett, for example, continued to have penalties against them and and assessments by the IRS because their filings were late and they weren't able to put their tax returns in.
▶ 0:25:13Obviously, he was unable uh being in a 9 by9 cell in Kabell, Afghanistan uh under the Taliban's rule. Uh so this is a really common sense provision as the chairman uh indicated. Let's give these Americans people who are are unable to for for circumstances beyond their control particularly in this situation uh to give them a chance and and there's num numerous uh division sections of this uh for postponing tax deadlines also uh to refund an abatement for anything that any fines and these
▶ 0:25:43individuals may incur and also uh this also extends the period of time for which they can put in timely tax returns. It's really just common sense. It's about helping Americans in the worst of situations. And uh we're just hopeful that my colleagues will will join us and uh and and make sure this legislation gets passed. And I appreciate the chairman uh bringing this to the forefront and recognizing the plight of Americans who end up in this unfortunate situation.
▶ 0:26:09And uh you know certainly we are so grateful for the miracle that Ryan Corbett is home with his wife and three three beautiful children. But thank you again, Mr. Chairman, and I yield.
▶ 0:26:18Thank you. I now recognize the ranking member from Massachusetts.
▶ 0:26:21Thank you. Let me yield my time to the distinguished gentleman from Virginia, Mr. Byer.
▶ 0:26:25Uh, thank you, Mr. Neil, very much. And thank you, Mr. Chairman. I also want to thank Representative Kennedy for her leadership on this long overdue legislation, the end tax penalties on American Hostages Act. After enduring captivity overseas, Americans who have been taken hostage are wrongfully detained often return home to massive tax bills from the IRS. These charges come in the form of interest on late tax payments and fines for non-payment of taxes during their detention. In some cases, they can total tens of thousands of dollars.
▶ 0:26:56Remember, these are people these are faced by people who are returning from months or even years of imprisonment overseas who are doing their best to put their lives back together. Besides these penalties being financially ruinous, it's hard to overstate the emotional and mental toll of having to deal with them as the process can drag on for months. This absurd situation is obviously not the fault of the individual taxpayers. But nor is it the fault of the IRS, which doesn't have the authority to fully wave or delay these payments.
▶ 0:27:25So, it's up to us to fix this problem. It's long past time that we did so. I'm glad to say that with the advocacy of Representative Tenny along with other champions in the House and Senate, we're on the cusp of providing urgently needed relief for these taxpayers. The bill postpones tax deadlines for any US national held hostage, detained abroad, while also extending relief to the spouse of the hostage or detainee. Additionally, it reimburses fees and penalties paid by American detainees and hostages released since 2021.
▶ 0:27:54With this legislation, we can do our part to make these Americans lives a little easier and put them on the path towards being whole again. I urge my colleagues to vote yes and I thank you. Yield back. Thank you. The committee will now proceed to consideration of HR 9496, the end tax penalties on American Hostages Act. Without objection, the measure will be considered as read and open for amendment at any point.
▶ 0:28:19At 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. I will now turn to Tom Bartal, chief of staff for the joint committee on taxation to provide a technical description of the amendment and 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.
▶ 0:28:49Chairman, the committee members have before them two joint committee documents, JCX 2026 and JCX 2726, which describe HR 9496 and the chairman's amendment, the nature of a substitute. The chairman's amendment, the nature of a substitute, makes uh small clerical corrections to the underlying provision. And that underlying provision extends the due dates for filing and payment in the case of persons held as a hostage or persons wrongfully detained.
▶ 0:29:19In addition, the period of detention or as a hostage is disregarded for determination of any interest or penalties and this relief is also extended to the spouse of such an in uh individual. The Secretary of the Treasury is to engage with the Secretary of State and the Attorney General uh to properly identify persons who would qualify under this provision and the provision would be effective for taxable years ending after the date of an date of enactment.
▶ 0:29:49Also, there's a companion provision that directs the Secretary of the Treasury to initiate a program under which individuals detained during the period beginning January 1st of 2021 and extending through the date of enactment um uh may seek refunds uh for any uh uh any assessments that uh were imposed during that period.
▶ 0:30:12uh the staff of the joint committee has estimated this would have a negligible effect on federal receipts during the budget period fiscal 2027 through fiscal 2036. That concludes my brief description. I'd be happy to answer any questions that the members might have.
▶ 0:30:28Thank you. Are there any technical questions about the amendment in the nature of a substitute?
▶ 0:30:33Seeing none, we will move to strike the last word. Mr. Dogget is recognized to strike the last word.
▶ 0:30:39Thank you, Mr. Chairman. Uh I'm very pleased to see this bill uh so belatedly here before the committee for approval. Certainly no American who's held hostage uh or their families should have to worry about staying current on their taxes, returning from captivity only to be met by an IRS penalty. To its credit, the IRS has worked to resolve this problem on its own.
▶ 0:31:03It has used the legislative authority that it already had to ease this burden An Inspector General's report this year confirms that the IRS implemented new procedures for penalty relief. But that report also found that the relief is still lacking with some of the freed not really getting all that they're entitled to.
▶ 0:31:27And the IRS has been candid about its own limits that under current law it cannot forgive the interest that keeps acrewing while an American sits in a foreign cell. This bill gives these protections the force of law and closes the gap the RS cannot reach on its own. Uh it has my full support. Of course, Miss Tenny's bill could have long ago become the law of the land.
▶ 0:31:50In the prior Congress, as the chairman just noted, the Senate unanimously passed this very same relief for hostages. But this committee's Republican majority refused to give them that certainty. Instead, they were intent on using our shared concern for Americans wrongly held abroad as an excuse for expanding the Trump regime's power to undermine a nonprofit by revoking its tax exempt status without providing a shred of evidence based solely on a claim that they were supporting
▶ 0:32:21terrorists. terrorist supporter uh a rather expansive term that authorit authoritarian governments use can be implemented uh in a way by the Trump regime as most anyone who does not accept Trump as a self-described messiah.
▶ 0:32:37While the court uh while the House passed the bill over my objection last year and the objection of most Democrats, the Senate wisely refused to expand Trump's uh power to weaponize the tax code.
▶ 0:32:52That bill, the nonprofit killer, as some called it, would have let the president's appointee simply label a nonprofit a terrorist supporting organization, flipped the burden on to the accused, give them 90 days to prove a negative, revoke their status without ever offering a shred of evidence, or even stating the reason why their uh status was being revoked.
▶ 0:33:15And of course, an appeal after your tax exempt status is revoked uh is no relief at all for a nonprofit. The nearly 300 groups that implored Congress to vote no were not terrorists. They were churches. They were hospitals, immigrant aid organizations, charities, and nonprofit newsrooms like the ones that give the public the facts on this level of government and every other one.
▶ 0:33:41Uh this uh effort that was made last year was never a shield against our enemies. It was a sword against Trump's enemies. The very same language came back here last year once again in this committee buried in Trump's big ugly bill which Republicans are celebrating. And this committee passed it on a totally partisan vote 26 to 19.
▶ 0:34:04Only after hundreds of charities across the country again raised the alarm was it quietly stripped from the bill before it reached the House floor. Americans across the political spectrum opposed giving the president the unilateral power by overwhelming major margins because they understand a simple truth. A president that can destroy his critics without evidence has far more room to enrich himself and to rig the next election.
▶ 0:34:32So, I'm pleased that we're finally being permitted to do this the right way. It should have happened from the start. A clean bill for the hostages and their families without any poison hidden inside. The first rule of confronting a would-be strongman is not to hand him more tools. Today, we take this one off the table and give American hostages the relief they've earned. I support this bill and I yield back.
▶ 0:34:58Miss Soul.
▶ 0:35:00Thank you, Mr. Chairman. I would like to thank our colleagues, Representatives Tenny and Byer for advancing this bipartisan legislation. You know, after um Russia invaded Ukraine in February of 2022, two Alamians by the name of Alex Duki and Andy Wyn volunteered uh to join Ukraine resistant efforts and were captured by Russian forces.
▶ 0:35:26Uh these Alamians were held captive as PSWs for over four months and it took a coordinated effort from the entire Alabama delegation and the state department to re to secure their release. If we passed this legislation, they would have been able to fully focus on their medical treatment and recovery instead of worrying about tax penalties from the um from the federal government.
▶ 0:35:50I therefore really support this legislation and ask that we that this bipartisan educ bipartisan legislation uh become law. The bipartisan in tax penalties on American hostages act which stop the IRS from levying fines on Americans who have been wrongfully detained or held hostage abroad. I urge my colleagues to support this legislation and I yield back the balance of my time.
▶ 0:36:15Are there additional members that wish to strike the last word? Seeing none, um are there any amendments to the amendment in the nature of a Seeing none, the question is on the adoption on the amendment in the nature of a substitute. All those in favor signify by saying I. I.
▶ 0:36:36Those 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
▶ 0:36:45Mr. Chairman, I move the committee favorably report HR 9496 as amended to the House of Representatives.
▶ 0:36:52The question is on the motion to favorably report HR 9496 as amended to the House of Representatives. The clerk will call the role.
▶ 0:37:00Mr. Buchanan,
▶ 0:37:01Mr. Buchanan, yes. Mr. Smith of Nebraska. Mr. Smith of Nebraska. Yes. Mr. Kelly. Mr. Kelly. Yes. Mr. Schwiker. Mr. Schwikert. Yes. Mr. Mr. Lood, Mr. Arrington,
▶ 0:37:24Mr. Estus,
▶ 0:37:25Mr. Estus, yes, Mr. Smucker. Mr. Smucker, yes. Mr. Hearn,
▶ 0:37:32Mr. Hearn, yes. Mrs. Miller, Mrs. Miller, yes. Dr. Murphy,
▶ 0:37:39Dr. Murphy, yes. Mr. Kustoff,
▶ 0:37:42Mr. Kustoff. Yes. Mr. Fitzpatrick. Mr. Fitzpatrick. Yes. Mr. Stwie. Mr. Stwie. Yes. Miss Tenny. Miss. Tenny. Yes. Mrs. Fishbach. Mrs. Fishbach. Yes. Mr. Moore. Mr. Moore. Yes. Miss. Van. Miss. Van. Yes. Mr. Fenstra. Mr. Fenstra. Yes. Miss Maliaakus. Miss Maliaakus. Yes. Mr.
▶ 0:38:11Mr. Harry. Yes. Mr. Yakam.
▶ 0:38:15Mr. Yakam. Yes. Mr. Miller.
▶ 0:38:18Mr. Miller. Yes.
▶ 0:38:21Mr. Bean.
▶ 0:38:25Mr. Moran.
▶ 0:38:34M. Moran. How is Mr. Arrington recorded?
▶ 0:38:43Mr. Arrington is not recorded.
▶ 0:38:45Mr. Arrington.
▶ 0:38:56Mr. Neil.
▶ 0:38:58Mr. Neil.
▶ 0:39:00Mr. Dogget.
▶ 0:39:02Mr. Do Mr. Dogit. Yes. Mr. Thompson.
▶ 0:39:06Mr. Thompson. Yes. Mr. Larson. Yes,
▶ 0:39:09Mr. Larson. Yes, Mr. Davis.
▶ 0:39:12Mr. Davis. Yes, Miss Sanchez.
▶ 0:39:15Miss Sanchez. Yes, Miss Su.
▶ 0:39:18Miss Su. Yes, Miss Delben.
▶ 0:39:21Miss Delben. Yes, Miss Chu. Hi,
▶ 0:39:24Miss Chu. Yes, Miss Moore.
▶ 0:39:27Miss Moore. Yes. Mr. Bole.
▶ 0:39:30Mr. Bole. Yes. Mr. Byer.
▶ 0:39:33Mr. Byer. Yes. Mr. Evans.
▶ 0:39:37Mr. Evans. Yes, Mr. Schneider.
▶ 0:39:41Mr. Schneider. Yes, Mr. Petta.
▶ 0:39:44Mr. Petta. Yes, Mr. Gomez.
▶ 0:39:48Mr. Gomez. Yes, Mr. Horsesford. Miss Plask. Mr. Swasy, Mr. Hood, Mr. Bean, Mr.
▶ 0:40:14Horseford, Miss Plask, Mr. Swasy.
▶ 0:40:25Chairman Smith,
▶ 0:40:26Chairman Smith, yes.
▶ 0:41:00The clerk will report the vote.
▶ 0:41:03Mr. Chairman, the yeses are 40 and the nos are zero.
▶ 0:41:06There being 40 yeses and zero nos, the motion is agreed to and HR 9496 as amended is ordered favorably reported to the House. Without objection, I ask that staff be authorized to make technical and conforming changes to HR 9496 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 HR 9500, the tax relief for fraud victims act introduced by representatives Max Miller and Suazi.
▶ 0:41:36As a leading voice on our oversight subcommittee, Representative Miller has made combating fraud and protecting the interests of taxpayers a top priority. I commend him for his focus on ensuring taxpayers get the relief they need as they try to rebuild their finances. I urge my colleagues to support this legislation and I'm pleased to recognize a gentleman from Ohio, Mr. Miller, for an opening statement.
▶ 0:42:00Thank you, Mr. Chairman, and I want to thank my colleague, uh, Mr. Swisy. I'm pleased that this committee is taking up my bill, the Tax Relief for Frauds Victims Act. This is a common sense, bipartisan answer to a crisis that is devastating families and seniors across our nation. A crisis that has hit record levels. We are living in an era where technology has fundamentally altered the landscape of crime. The FBI's 2025 internet crime report paints a grim picture.
▶ 0:42:27Cyber enabled crimes have defrauded Americans of nearly $21 billion in a single year. That's a 26% increase in losses from the year prior. We're witnessing an industrialization of deception before our very eyes. For the first time, the FBI's report features a dedicated section on artificial intelligence used in over 22,000 complaints and costing Americans nearly $900 million.
▶ 0:42:54Criminals are now using generative AI to clone the voices of our loved ones and launch hyperpersonalized attacks at scale. The numbers for our seniors are particularly devastating. Last year, Americans over the age of 60 reported $7.7 billion in losses, a 37% increase in the number of complaints compared to the previous year. These aren't just statistics. These are the life savings, retirement accounts, and securities of our constituents.
▶ 0:43:23When a taxpayer is targeted by these increasingly sophisticated scams, they suffer an unimaginable blow they never see coming and can never recover from. But the law adds a second layer of injury. Under the current tax code, we effectively treat those stolen assets as taxable income. It is a fundamental failure of our system when a victim is robbed by a criminal and then taxed by their own government on the money that was stolen from them.
▶ 0:43:49the their victims twice over by the fraudster and by the tax code that hasn't kept pace with today's digital threats. This bill restores theft loss deduction, provides flexibility for reporting losses, and ensures retirement accounts are not treated as taxable windfall when drained by scammers.
▶ 0:44:07I want to thank Representative S Swazi for his partnership on this issue of fundamental taxpayer fundamental taxpayer fairness which serves as a powerful reminder that we can deliver effective realworld solutions when we work across the aisle. We cannot stop the evolution of technology but we can ensure our tax code provides a safety net for those who fall through the cracks. This bill is a lifeline for the vulnerable and I urge my colleagues to support this legislation. Thank you, Mr. Chairman. I yield back.
▶ 0:44:34I now recognize the ranking member from Massachusetts, Mr. Neil,
▶ 0:44:37thank you. Let me yield my time to the distinguished gentleman from Connecticut, Mr. Larson.
▶ 0:44:42Thank you, Mr. Neil. Thank you, Mr. Chairman. And uh congratulations to Mr. Miller and Mr. Swisy on what I think as Mr. Miller described it as a common sense bill and a common sense approach. I especially want to commend Mr.
▶ 0:44:58Swisi for underscoring something he's been working on since 2017 when he arrived here and uh as it deals with uh crumbling foundations and pirateite again it's uh something that may not be known to all members uh but it's related to a similar kind of disaster that occurred for people called dry well. I also want to acknowledge the work of Mr.
▶ 0:45:28Neil during this time to make sure that victims uh in this strongly hit uh southern New England and uh Massachusetts but also New York and other states. Uh imagine uh having bought a home and invested and then only to come to find that uh an element called pyite actually crumbles the foundation.
▶ 0:45:56People were seeing sunlight through their basic foundations or taking chunks away from it. So uh as Mr. Miller indicated, this is a tremendous step forward. Uh and uh the bill repeals the limitation on casualty loss deduction put in place by the 2017 Trump law and u made permanent by OB.
▶ 0:46:24Uh this limitation uh limited the deduction to damage caused by presidentially declared natural disasters. In Representative Courtney and others and Mr.
▶ 0:46:41Neil uh, met to get the guidance from Treasury Department that, uh, how homeowners impacted by crumbling foundation were able to use the casualty loss deduction to write off the cost of uh in 2017, shortly after uh we were able to secure the 2017 uh when the Trump Trump uh tax law of 2017 passed, uh we were able to secure a safe
▶ 0:47:11harbor that allowed homeowners to amend their tax returns. Uh the work of Mr. Miller and Mr. Suazi expands upon this and does a great service. As Mr. Miller said, from a common sense perspective, I know this uh effort by Mr. Swisy was personal and uh had the opportunity to work with him uh directly.
▶ 0:47:39Uh I wanted also to submit for the record um Mr. chairman, a uh uh a letter from uh Representative Joe Courtourtney who has uh been immersed in this issue since Uh for the record, if if I might and uh also without
▶ 0:48:00uh wanted to uh again thank the efforts uh by the committee staff also and working with the IRS throughout this. This is a uh when you're confronted with something like this and visit citizens through no fault of their own who are subject to uh and we all know how critical the issue of housing is.
▶ 0:48:23But when you have a house and it's your key investment and through no fault of your own, it's crumbling before your very eyes, you can, I think, rightfully understand uh the need to address this, which makes the uh bipartisanship of this uh and the work together that Mr. Miller and Mr. Swisy provided uh outstanding and sets an example.
▶ 0:48:47And I know uh my colleagues are probably wondering how I'm going to sneak social security into this. Uh so I would only I would only add that it demonstrates what happens when you work bipartisanly as uh representative excuse me as Senator Warren and uh Senator Moreno recently demonstrated. And with that uh I'll yield back.
▶ 0:49:14Thank you. Thank you. The committee will now proceed to consideration of HR 9500, the Tax Relief for Fraud Victims Act. 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 the 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.
▶ 0:49:41I will now turn to Tom Bartold, chief of staff for the joint committee on taxation to provide a technical description of the amendment and 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.
▶ 0:49:55Mr. Chairman, the members of the committee have before them two joint committee documents, JCX21 and JCX28, which describe HR 9500 and the chairman's amendment, the nature of a substitute. The chairman's amendment, the nature of a substitute, makes uh clerical corrections to the underlying legislation and contains uh generally three components.
▶ 0:50:17First, the proposal generally reinstates the pre208 law, which allows an individual taxpayer a deduction for a personal casualty loss, including theft losses to the extent such losses exceed 10% of the taxpayers's adjusted gross income. with specifically with respect to thefts from fraud.
▶ 0:50:38Uh the provision allows the taxpayer to elect to treat that loss uh as occurring in the taxable year in which the loss in which the theft occurred rather than the year in which it's discovered. And to accomplish that, it extends the limitation period for filing for uh uh for refunds. It also makes uh comp provides comparable relief in the case of a taxpayer who has incurred an additional tax on an early distribution from a qualified retirement plan.
▶ 0:51:09And then as just noted by Mr. Larson, it provides a special rule for losses to a principal residence that are attributable to concrete foundations adversely impacted by pyite. Uh the general limitations period again is treated as not expiring before one year after the date of enactment. Uh and it's not limited to taxes uh paid within the prior two or three years.
▶ 0:51:34This provision would be effective for casualty losses sustained and retirement plan distributions after December 31st of 2025 and with respect to pyite losses uh losses after December 31st of 2020. Uh the joint committee staff has estimated that the uh effect on federal receipts would be a loss of $6.52 billion dollars over the fiscal period of fiscal years 2027 through 2036.
▶ 0:52:04That concludes my brief description. I'd be happy to answer any questions that the members might have.
▶ 0:52:09Thank you. Are there any technical questions about the amendment and the nature of a substitute?
▶ 0:52:15Seeing none, does any member wish to strike the last word? Seeing none. Um, are there any amendments to the amendment in the nature of a substitute?
▶ 0:52:28Mr. Petta,
▶ 0:52:29I have an amendment at the desk. Mr.
▶ 0:52:32would the gentleman suspend while the amendment is distributed?
▶ 0:52:35Yes. Thank you.
▶ 0:52:38Yeah. I reserve a point of order.
▶ 0:52:46A po a point of order has been reserved. U Mr. Mr. Panata, proceed.
▶ 0:52:49Thank you. Uh, Mr. Chairman, obviously I appreciate this bill, appreciate the good work between Mr. Miller and Mr. Swisy. Um, but I just have one issue that I think needs to be addressed through this amendment, which would ensure that the bill's provisions apply retroactively. I support the goal of this legislation to provide critical tax relief to those who have suffered devastating financial losses at the hands of scammers.
▶ 0:53:15Unfortunately, because the bill's provisions only apply for tax years 2025 and beyond as written, the bill would leave many of our constituents without relief. Now, my office have seen too many seniors defrauded of their retirement savings and hit with a double blow, meaning that not only are their funds stolen, but they are facing a tax liability on money that they no longer have. And the consequences are devastating.
▶ 0:53:41As we know, when someone's retirement savings are stolen, it shatters decades of financial planning. It can financially destabilize entire families, forcing seniors to delay medical care, rely on their adult children for support, and suffer a diminished quality of life after years of frugal living. After contending with that loss, taxing victims on money that was stolen from them is borderline cruel.
▶ 0:54:08I have had multiple seniors come to my office hoping that their tax bill was a mistake and that we could fix the situation with casework. Sadly, unless we make this bill retroactive, there is little that our offices can do. I believe it's borderline irresponsible to leave these victims without tax relief simply because they were defrauded during a single 8-year period.
▶ 0:54:31It condemns them to manage an unfair and unfort unaffordable tax bill at the very moment they are most financially vulnerable. However, Mr. Chairman, and as we've discussed prior to this hearing, uh I would withdraw this amendment if there is a commitment to work with us towards incorporating this provision on the floor as we go forward.
▶ 0:54:54Thank you, Mr. Petta. Um definitely uh want to work with you on this. I think it's uh it serves a very good purpose and a good idea to try to implement.
▶ 0:55:04And with that commitment, Mr. Chairman, I will withdraw my amendment.
▶ 0:55:07Thank you.
▶ 0:55:07Thank you.
▶ 0:55:09Are there additional amendments to the amendment in the nature of a substitute?
▶ 0:55:14Seeing none, the question is on the adoption of the amendment in the nature of a substitute. All those in favor signify by saying I.
▶ 0:55:21Those 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
▶ 0:55:31Mr. Chairman, I move the committee favorably report HR 9500 as amended to the House of Representatives.
▶ 0:55:38The question is on the motion to favorably report HR 9500 as amended to the House of Representatives. The clerk will call the role.
▶ 0:55:45Mr. Buchanan,
▶ 0:55:47Mr. Buchanan,
▶ 0:55:49Mr. Smith of Nebraska,
▶ 0:55:51Mr. Smith of Nebraska, yes. Mr. Kelly,
▶ 0:55:55Mr. Kelly. Yes. Mr. Schwiker. Mr. Le Hood. Mr. Arrington. Mr. Estus.
▶ 0:56:19Mr. Smucker. Mr. Smucker. Yes. Mr.
▶ 0:56:24Mr. Hearn. Yes, Mrs. Miller. Mrs. Miller. Yes, Dr. Murphy.
▶ 0:56:31Dr. Murphy. Yes, Mr. Kustoff. Mr. Kustoff. Yes, Mr. Fitzpatrick. Mr. Fitzpatrick. Yes, Mr. Stwie.
▶ 0:56:40Mr. Stwie. Yes, Miss Tenny. M. Tenny. Yes. Mrs. Fishbach. Mr. Moore.
▶ 0:56:52Mr. Moore. Yes. Miss Vanine Miss Vanine Yes. Mr. Fenstra Mr. Fenstra. Yes. Miss
▶ 0:57:03Miss Maliaakis. Yes. Mr. Kerry.
▶ 0:57:06Mr. Kerry. Yes. Mr. Yakam.
▶ 0:57:10Mr. Yakam. Yes. Mr. Miller.
▶ 0:57:13Mr. Miller. Yes. Mr. Bean.
▶ 0:57:16Mr. Bean. Yes. Mr. Moran.
▶ 0:57:19Mr. Moran. Yes.
▶ 0:57:22Mr. Neil.
▶ 0:57:23Yes. Mr. Neil, yes. Mr. Dogget.
▶ 0:57:29Mr. Dogget. Yes. Mr. Thompson. Hi.
▶ 0:57:33Mr. Thompson. Yes. Mr. Larson.
▶ 0:57:36Mr. Larson. Yes. Mr. Davis.
▶ 0:57:40Mr. Davis. Yes. Miss Sanchez.
▶ 0:57:43Miss Sanchez. Yes. Miss Su.
▶ 0:57:47Miss Su. Yes. M. Delen.
▶ 0:57:50Miss. Delen. Yes. Miss Chu. Miss two. Yes. Miss Moore. Miss Moore. Yes. Mr.
▶ 0:58:03Mr. Byer.
▶ 0:58:05Mr. Byer. Yes.
▶ 0:58:07Mr. Evans.
▶ 0:58:08Mr. Evans. Yes.
▶ 0:58:11Mr. Schneider.
▶ 0:58:12Mr. Schneider. Yes. Mr. Petta.
▶ 0:58:16Mr. Petta. Yes. Mr. Gomez. Hi.
▶ 0:58:19Mr. Gomez. Yes. Mr. Horseford Miss Plask
▶ 0:58:28Mr. Swazy,
▶ 0:58:33Mr. Schwiker.
▶ 0:58:35Mr. Schwiker. Yes. Mr. Le Hood. Mr. Arrington. Mr. Arrington. Yes. Mr. Estus. Mrs. Fishbach. Mrs. Fitchbach. Yes. Mr. Bole Mr. Horford.
▶ 0:59:06Miss Plask. Mr. Swazy. Chairman Smith.
▶ 0:59:16Chairman Smith. Yes. The clerk will report the vote.
▶ 0:59:39Mr. Chairman, the yeses are 39 and the nos are zero. There being 39 yeses and zero nos, the motion is agreed to and HR 9500 as amended is ordered favorably reported to the House. Without objection, I ask that staff be authorized to make technical and conforming changes to HR 9500 and that members have two additional days to file with the committee clerk supplemental additional dissenting or minority views.
▶ 1:00:09next order of business is HR 9501, the AI Tax Integrity Act of 2026, introduced by Ways and Means Committee Vice Chairman Buchanan and Representative Horsford. The pilot program authorized by this legislation is a reasonable approach toward embracing the power of AI while ensuring our tests drive the policy first.
▶ 1:00:34with his years of experience on his commit on this committee, including as our current vice chairman and previous chairman of the tax subcommittee and oversight subcommittee, Representative Buchanan understands better than anyone that we can always do more to enforce our tax laws. But at the same time, we must be cautious to implementing new, perhaps sweeping policies and never undermine our oversight over how the IRS goes about its business.
▶ 1:01:02I appreciate the vice chairman's leadership on this issue and I urge my colleagues to support this legislation that takes a thoughtful approach towards better tax treatment. I'm pleased to recognize the gentleman from Florida, Mr. Buchanan for an opening statement.
▶ 1:01:18Thank you. Thank you, Mr. Chairman, for moving forward with my legislation that will enable the IRS to take a serious look at tax fraud using artificial intelligence. Billions of dollars are lost to fraudsters each year, as much as 600600 billion dollars.
▶ 1:01:36As AI continues to advance, Congress has a responsibility to evaluate, and that's the key, how this might make a difference uh in terms of being more effective, efficient, and more accountable than what we've had the past. The AI Tax Integrity Act establishes a temporary pilot program to evaluate whether AI can be effectively identify different opportunities in terms of tax fraud.
▶ 1:02:03Following the pilot, the GAO will report to Congress on its effectiveness. Most importantly, the bill does not, that's critical to a lot of people, expand the IRS enforcement activity and is focused on the evaluation of AI to the IRS. I'd like to thank Congressman Horsford, Striker, and Bean for standing with me as we work to close the gap in terms of a lot of the tax fraud that's out there. I urge my colleagues to support the bill, and I yield back.
▶ 1:02:38The ranking members recognized.
▶ 1:02:40Thank you. This legislation has been tra uh championed by Congressman Horsford and we want to thank him for his leadership on the effort along with uh Bern Buchanan. Artificial intelligence is already reshaping our economy and many of the processes we rely upon to this day. We've heard quite a few big promises from the Secretary of the Treasury about the use of AI at the IRS. I'll note that those remain aspirational, but this bill takes a different approach.
▶ 1:03:09Like with any emerging technology, this legislation seeks to thoughtfully deploy AI with clear guide rails guardrails to establish a limited pilot program at the IRS focused on narrow areas to help improve tax administration. This includes identifying identity theft, the use of ghost preparers, and even fraudulent claims.
▶ 1:03:31Just as important is that this pilot program is temporary, but it's also subject to independent review by the GAO before any broader application is considered. When new tools have the potential to strengthen our current systems while remaining accountable to the people, they are worth further exploration. And for that reason, I will support this legislation. And I yield back my time. Thank you, ranking member.
▶ 1:04:12Thank you. The committee will now proceed to consideration of HR 9501, the AI Tax Integrity Act of 2026. 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. 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.
▶ 1:04:38I will now turn to Tom Bartal, chief of staff for the joint committee on taxation to provide a technical description of the amendment and 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. Chairman, the committee members have before them two joint committee documents, JCX23 and JCX30, which describe the underlying legislation HR9501 and the chairman's amendment in the nature of a substitute.
▶ 1:05:07The chairman's amendment nature of a substitute makes a modest clerical correction to the underlying legislation and the amendment uh starts from while the IRS is developing presently the use of artificial intelligence for use across the agency.
▶ 1:05:22This legislation directs the secretary to establish a specific artificial intelligence uh pilot project specifically targeting inaccurate returns um inaccurate returns from identity theft, fraudulent claims for earned income tax credit and improperly identified third-party preparers.
▶ 1:05:43It also provides that the government accountability office prepare a report assessing this pilot program and to deliver that report to this committee and the senate committee on finance. Uh this uh legislation would be effective on the date of enactment and the staff of the joint committee on taxation has estimated that it would have a negligible effect on government receipts uh during the budget period of fiscal years 2027 through 2036. That concludes my brief description.
▶ 1:06:13and I'd be happy to answer any questions that the members might have.
▶ 1:06:20Are there any technical questions?
▶ 1:06:24Does any member wish to strike the last Seeing none, are there any amendments to the amendment in the substitute?
▶ 1:06:36Seeing Seeing that there's no amendments, the question is on the adoption of the amendment and the nature of a substitute. All those in favor signify by saying I.
▶ 1:06:44Those opposed say no. The eyes have it. I will now recognize Mr. Buchanan for the purpose of offering a motion.
▶ 1:06:52Mr. Chairman, I move the committee favorably report HR 9501 as amended to the House of Representatives.
▶ 1:06:59The question is on the motion to favorably report HR 9501 as amended to the House of Representatives. The clerk will call the role.
▶ 1:07:06Mr. Buchanan.
▶ 1:07:08Mr. Buchanan. Yes. Mr. Mr. Smith of Nebraska. Mr. Smith of Nebraska. Yes. Mr. Kelly. Mr. Kelly. Yes. Mr. Schwiker. Mr. Schwikert. Yes. Mr. Le Hood. Mr. Arrington. Mr. Estus. Mr. Smucker. Mr. Smucker. Yes. Mr.
▶ 1:07:43Mrs. Miller. Mrs. Miller. Yes. Dr. Murphy. Dr. Murphy. Yes. Mr. Kustoff. Mr. Kustoff. Yes. Mr. Fitzpatrick.
▶ 1:07:54Mr. Fitzpatrick. Yes. Mr. Stwie.
▶ 1:08:02Miss Tenny.
▶ 1:08:04Miss Tenny. Yes. Mrs. Fishbach.
▶ 1:08:07Mrs. Fishbach. Yes, Mr. Moore.
▶ 1:08:12Mr. Moore. Yes, Miss Vanine. Miss Vanine. Yes, Mr. Fenstra. Mr. Fenstra. Yes, Miss Maliotakus. Miss Malotakus. Yes, Mr. Kerry.
▶ 1:08:26Mr. Kerry. Yes. Mr. Yakam. Mr. Yakam. Yes. Mr. Miller.
▶ 1:08:36Mr. Miller. Yes, Mr. Bean.
▶ 1:08:40Mr. Bean. Yes, Mr. Moran.
▶ 1:08:44Mr. Moran. Yes, Mr. Neil.
▶ 1:08:48Mr. Neil. Yes, Mr. Dogget.
▶ 1:08:54Mr. Dogget. Yes. Mr. Thompson.
▶ 1:08:57Mr. Thompson. Yes. Mr. Larson.
▶ 1:09:01Mr. Larson. Yes.
▶ 1:09:03Mr. Davis.
▶ 1:09:05Mr. Davis. Yes, Miss Sanchez.
▶ 1:09:09Miss Sanchez. Yes, Miss Su.
▶ 1:09:12Miss Su. Yes, Miss Delben.
▶ 1:09:16Miss Delen. Yes, Miss Chu.
▶ 1:09:19Miss Chu. Yes. Miss Moore.
▶ 1:09:23Miss Moore. Yes. Mr. Boille.
▶ 1:09:26Mr. Bole. Yes. Mr. Byer.
▶ 1:09:30Mr. Byer. Yes. Mr. Evans.
▶ 1:09:34Mr. Evans. Yes, Mr. Schneider. Mr. Schneider. Yes, Mr. Petta. Mr. Petta. Yes, Mr. Gomez.
▶ 1:09:46Mr. Gomez. Yes, Mr. Horzford. Miss Plask. Mr. Swazy, Mr. Hood. Mr. Arrington. Mr. Arrington. Yes. Mr. Estus.
▶ 1:10:16Mr. Hearn.
▶ 1:10:18Mr. Hearn. Yes. Mr. Stwie.
▶ 1:10:23Mr. Stwie. Yes. Mr. Horford. Miss Plask.
▶ 1:10:33Mr. Swazy. Chairman Smith.
▶ 1:10:42Chairman Smith. Yes. The clerk will report the vote.
▶ 1:11:02Mr. Chairman, the yeses are 40 and the nos are zero.
▶ 1:11:05There being 40 yeses and zero nos, the motion is agreed to and HR9501 as amended is ordered favorably reported to the house. Without objection, I ask that staff be authorized to make technical and conforming changes to HR9501 and that members have two additional days to file with the committee clerk supplemental additional dissenting or minority views.
▶ 1:11:34Our next order of business is HR7972, the taxpayer workforce modernization act introduced by representative by oversight subcommittee chairman Schweiker. I commend Chairman Schwikert for his unwavering commitment to a forward-looking approach to IRS operations and for his commitment to advancing the government's technology capabilities and usage.
▶ 1:11:57He's always thinking outside the box and his efforts here will allow that agency to attract top talent from institutions and industries outside of Washington. Chairman Schweikert understands that bringing more expertise and experience to the table will spur a more innovative mindset that is desperately needed. The IRS can always be doing more to better serve American taxpayers, a goalong champion by our oversight chairman.
▶ 1:12:25I urge my colleagues to support this legislation and I'm pleased to recognize a gentleman from Arizona, Mr. Schwikert, for an opening statement.
▶ 1:12:32Thank you, Mr. Chairman. Um, fairly simple bill. It's basically trying to design a fellowship program of data scientists. And you'll notice in the language we've tried to make sure that it has in there for rules and mechanics to do audits to being able to track fraud. Um I I can read all sorts of parts of it. It's not that complicated.
▶ 1:12:57Um but you know I and we've talked about this in previous years of increasing the quality and access to data science data analytics for decision making and then training IRS staff on the use of those tools. And with that I yield back. Mr. Chairman
▶ 1:13:16I now recognize the ranking member.
▶ 1:13:18I'm going to yield my time Mr. Chairman to Mr. Dogate.
▶ 1:13:22Thank you very much. Uh I want to start by giving the gentleman from Arizona his due. Uh we seldom have a hearing that Mr. Schwher doesn't talk about data. It's important. He has spent years pressing this committee to drag the IRS into the modern age. And on the premise of this bill, uh I do not disagree.
▶ 1:13:39The IRS does need worldclass data scientists, sophisticated tax evasion, the kind hidden in partnership structures, in offshore entities, in the returns of the very wealthy, in the returns of the president. It's not caught by a clerk with a calculator. It is caught by economists and statisticians building models that find the needle in more than 260 million return hay stacks.
▶ 1:14:05So if the question is whether the IRS needs the kind of talent that he's discussing, the answer is yes. Emphatically yes. But I do not support this bill because it asked the committee to applaud the hiring of the very people that the Trump regime just spent a year firing. Here is what I mean. The IRS already had a division full of data scientists.
▶ 1:14:28It's called the research, applied analytics and statistics division, RAS, and it was staffed with exactly the very kind of economist and administrators and statisticians, data scientists that this bill claims to desire. They will build the models that flag high-end tax cheating.
▶ 1:14:47That capability is what led the Internal Revenue Service in 2023 to use artificial intelligence to identify 75 of the country's largest partnerships, hedge funds, real estate empires, the nation's biggest law firms, each averaging more than 10 billion dollars in assets, and open them to audit. And what happened to them?
▶ 1:15:08Well, the Government Accountability Office told us that one division lost 63 of its key employees who had been working on artificial intelligence. Three of its directors, the people leading the AI work, departed in a single month. And the GAO reported something that ought to stop the committee cold. The model that IRS had built to flag tax returns for audit may now be shelved because there may not be any staff that knows how to use it.
▶ 1:15:38They have a machine that can find the tax cheating. They fired the people that will operate the machine. So what does this bill do about it? It stands up a boutique fellowship to recruit a handful of data scientists from the private sector at salaries that the bill sets uh at a level that is $400,000 uh equivalent to the president's salary. Uh and this is not a story about one division.
▶ 1:16:04In a single year, the Trump administration and its Doge henchmen uh had uh dismissed more than 31,000 IRS employees. almost an third of the IRS workforce, a third of all revenue agents gone, 46% of the AY's senior executives gone. Seven different commissioners in 12 months. That's the kind of stability the Trump regime has offered.
▶ 1:16:31Senior employees resign reassigned to answer the telephone while highend tax cheats ran rampant and they continue to do so. That's not modernization. It's demolition. And we are not guessing at the damage. We are already measuring it. IRS data obtained under the Freedom of Information Act shows that enforcement revenue has fallen by nearly $5 billion in a single year as the agency opened more than 120,000 fewer audits.
▶ 1:17:01Independent analysts estimate that the staffing cuts will cost the Treasury on the order of $600 billion in the coming decade. That's 600 billion that could have been applied to reduce our nation's soaring debt or to fund much needed programs. Real money owed and never collected. The Treasury Secretary's answer to all this when he was here, no, don't worry. The fewer agents would not cost a dime because the agency would lean on smarter IT.
▶ 1:17:28But the GAO looked at that promise and poured cold water on it. You cannot run artificial intelligence without intelligent people running it and feeding it. After a decade of Republican budget cuts, I voted for the funding that finally let the IRS build this capacity. They took a wrecking ball to that funding and now they bring us a fellowship and call it modernization. I'm not against hiring data scientists.
▶ 1:17:54I'm against the pretense that a handful of fellas can backfill the thousands of skilled and dedicated employees who the Trump regime fired. Fully fund the IRS, restore the analyst, rebuild the enforcement staff until this bill is part of that work and not just a fig leaf for demolition. I urge my colleagues to oppose it and I yield
▶ 1:18:16Thank you. The committee will now proceed to consideration of HR7972, the Taxpayer Workforce Modernization Act. 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. 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.
▶ 1:18:42I 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 substitute with an emphasis on the changes made since introduction. and I ask that members hold their questions until after his presentation.
▶ 1:18:55Mr. Chairman, the committee members have before them two joint committee documents, JCX25 and JCX32, which describe HR7972 and your amendment in the nature of a substitute.
▶ 1:19:08Your amendment, the nature of substitute uh makes modest uh clerical changes uh uh and the general provision would establish not later than September 30th of this year a fellowship program within the IRS to recruit skilled data scientists with the goal to help address the most complex issues that the IRS faces.
▶ 1:19:31The program would be staffed with at least 10 uh 10 such fellows and it would establish an audit task force staffed by these fellows and regular IRS employees. Uh the uh legislation further requires that after the fellowship program is stood up that the uh secretary would provide an annual report to Congress on the uh effectiveness of the fellowship program. This legislation would be effective on the date of enactment.
▶ 1:20:02Uh a cost estimate of this uh uh provision would will be provided by the Congressional Budget Office as it involves an outlay That concludes my brief description of uh this legislation. I'd be happy to answer any questions that the members might have.
▶ 1:20:19Thank you. Are there any technical questions about the amendment and the nature of a substitute? Seeing none, we will move to strike the last word. Mr. Davis is recognized to strike the last word.
▶ 1:20:31Thank you, Mr. Chairman, and um I'd like to associate myself with many of the comments made by Mr. Dogget. I strongly oppose the Taxpayer Workforce Modernization Act. This bill is a boondoggle to the Trump administration to gift high paid government jobs to their donors and Doge loyalists.
▶ 1:20:56Over and over, the Trump administration has undermined the Internal Revenue Service workforce, while Republicans have aided and abetted or remained
▶ 1:21:08After cutting over $1 billion from the Internal Revenue Service, the base IRS budget is about 50% below its 2010 level after adjusting for inflation.
▶ 1:21:22The tick to just reported that the Trump IRS lost 30% of its workforce between January 2025 and January 2026 and that 42% of the AY's IT staffers are gone are involuntarily The Trump administration cut the research applied analytics and statistics unit with experts specifically
▶ 1:21:53trained to do the work listed in this bill. The Doge team bragged about how they could use AI to reduce the workforce. Instead of supporting the actual Internal Revenue Service agency and workforce, the Republicans are rubber stamping high salaries for politically connected individuals to do the work of the professional Internal Revenue staff and the Trump administration
▶ 1:22:24fired. Republicans have greenlighted Trump's eternal immunity from internal revenue service audits for himself, his family, and his businesses. Now they want to gift $400,000 in salaries to his handpicked politically connected friends while firing the trained professionals doing the work that this bill purports
▶ 1:22:55to do. Let's support those professional staff who currently work for the Internal Revenue Service. And I yield back.
▶ 1:23:06Mr. Thompson.
▶ 1:23:10Thank you, Mr. Chairman. I move to strike the last word. Mr. Chairman, while I appreciate my colleagues interest in modernizing the IRS, I have serious concerns with this piece of legislation. We should absolutely be looking for ways to make the IRS more efficient, more effective, and better equipped to serve taxpayers. Modernization is an important goal and I sus I support responsible innovation.
▶ 1:23:40But replacing tens of thousands of dedicated public servants and critical investments in tax administration with just 10 data scientists, a fellowship program is simply not a serious modernization strategy. The IRS is one of the most important agencies in the federal government. It collects the revenue that funds our national priorities.
▶ 1:24:06Ad ministers critical tax benefits and serves millions of taxpayers every year. If we want an IRS that's modern, efficient, and responsive, we should be investing in both technology and the experienced workforce needed to use it effectively. Technology should enhance the work of skilled employees, not be treated as a substitute for those employees.
▶ 1:24:36We should embrace innovation, but we should not undermine the AY's ability to enforce the law, to combat fraud, and to provide taxpayers with the services that they deserve. For those reasons, I have significant concerns with this piece of legislation and I'll be voting no. Thank you, Mr. Chairman, and I yield back. Miss Chu, I move to strike the last word. First, look at where we are.
▶ 1:25:06For decades, the IRS was asked to do more with less. As its resources dwindled, its workload grew. The result was exactly what you would expect. Wealthy tax cheats slipped through the cracks. Audits declined, taxpayer service deteriorated, refunds took long to process, and the tax gap continued to grow. That's why Democrats created a solution to fix this problem.
▶ 1:25:33We invested a historic $80 billion for the IRS and the Inflation Reduction Act to address the problems plaguing the agency for so long. Those investments were already paying off. Customer service improved. The agency was able to devote more resources to pursuing wealthy tax cheats and experts projected those investments would return over half a trillion dollars in revenue for taxpayers.
▶ 1:25:59Unfortunately, this was cut short by Republicans who made it their mission to claw back this funding at every single opportunity. They've clawed back nearly 90% of that funding. And President Trump has fired more than 28,000 dedicated IRS employees, more than one quarter of the AY's workforce. Now, Republicans bring us this bill.
▶ 1:26:25It would create a new fellowship program to recruit data scientists to address complex tax issues. But the IRS already has a division dedicated to exactly that work. The research applied analytics and statistics division already employs data scientists and technical experts who developed advanced tools to detect tax evasion, estimate the tax gap, and strengthen te tax compliance.
▶ 1:26:53And the irony is impossible to ignore. While Republicans propose creating a new fellowship to recruit experts, President Trump has already fired more than 25% of the very division that performs this work today. This bill does not solve the problem. It duplicates existing responsibilities while ignoring the real issue.
▶ 1:27:18The IRS has been stripped of the funding and personnel that it needs to do its job. If Republicans truly wanted to modernize the IRS IRS and improve taxpayer service, they would restore the staff and resources they eliminate it instead of creating another unnecessary program. I urge my colleagues to join me in voting against this bill and I yield
▶ 1:27:44Does anyone wish to strike the last
▶ 1:27:48Seeing none, um, are there any amendments to the amendment in the nature of a substitute?
▶ 1:27:53Mr. Mr. Chairman, I have an amendment at the desk.
▶ 1:27:56Mr. Chairman, I reserve a point of
▶ 1:27:57A point of order has been reserved. Will the gentle lady um uh suspend while the amendment is distributed? Gentle lady may proceed.
▶ 1:28:17The amendment I am offering today would prohibit the data scientists hired by this bill's fellowship program from auditing or conducting data analysis on working Americans who earn less than $100,000 annually until the IRS audit immunity settlement between President Donald Trump, the Department of Justice, and the IRS is permanently rescended.
▶ 1:28:44As we all know, the IRS audits disproportionately target earned income tax credit recipients and lowincome working families. Meanwhile, the Republicans gutted the funding Democrats provided the IRS to go after wealthy taxpayers who can use sophisticated schemes to dodge paying taxes.
▶ 1:29:05Furthermore, President Trump just made a corrupt deal with his own DOJ and IRS to that his family, his businesses are immune from IRS audits forever. Just this week, we learned that President Trump made more than1 billion dollars from crypto since he took office last year, while everyday working families are struggling to pay for higher grocery prices as well as gas prices and skyrocketing health care costs.
▶ 1:29:36But but President Trump and his wealthy friends don't have to worry because they know that the IRS will not be coming after them. We will not stand by for this hypocrisy. If this new IRS fellows, if these new IRS fellows cannot go after Trump, they should not be able to go after workingclass Americans making less than $100,000 a year. We will not stand for this hypocrisy.
▶ 1:30:02Therefore, my amendment prohibits these new fellows from targeting working families as long as President Trump is immune from audits. I urge all my colleagues to vote for my amendment. We should choose to stand with hardworking taxpayers and we should not be defending President Trump and his rich friends from I also want to acknowledge that this is supported by studies showing how the focus
▶ 1:30:32on audits on highincome individuals who often have the resources to evade paying taxes could help collect $700 billion dollars in taxes that goes unpaid to the IRS each year. A 2022 report by the GAO explains that in recent years, audit rates have dropped for the most wealthiest among us. Those who are making $200,000 or more are paying less taxes.
▶ 1:31:01And this fellowship program would not be necessary if the Republicans had not gutted the workforce in the IRS. The problem of declining audit rates has only been made worse by dramatic uh reductions in the workforce by the IRS in the current administration and the 2025 Doge cuts. By the middle of last year, the IRS audit staff had been reduced by approximately 31% or 3,600 employees.
▶ 1:31:31Every hour used to audit taxpayers who earn over five million generates nearly five $5,000 in additional tax revenue in comparison to only 65 generated from auditing taxpayers who make about $200,000. This is a clear reason for us to ensure that higher earners pay their fair share.
▶ 1:31:53I'm skeptical that these data science scientists from this fellowship program will actually create more revenue, but rather go after lowincome hardworking Americans. But if my colleagues want to in increase uh employment at the IRS, which we desperately need, we should guarantee that the highest rates on investments from that decision would be made by going after higher uh tax earners.
▶ 1:32:22I asked my colleagues to support this important amendment because we should be going after the wealth the wealthiest among us, not the the uh hardworking average Americans who um are often the lowest hanging fruit when it comes to audits. With that, I yield back the balance of my time.
▶ 1:32:41Does anyone wish to strike the last word on the amendment?
▶ 1:32:46Seeing none, um the question is on agreeing to the amendment offered by Miss Soul. All All those favor. Um we'll let the clerk call the role.
▶ 1:32:58Mr. Buchanan.
▶ 1:33:00Mr. Buchanan. No. Mr. Smith in Nebraska. Mr. Smith of Nebraska. No. Mr. Kelly. Mr. Kelly. No. Mr. Schwikert. Mr. Schwikert. No. Mr. Le Hood. Mr. Arrington. Mr. Estus. Mr. Smucker.
▶ 1:33:30Mr. Smucker. No. Mr. Hearn. Mr. Hearn. No. Mrs. Miller. Mrs. Miller. No. Dr. Murphy. Dr. Murphy. No. Mr. Kustoff. Mr. Kustoff. No. Mr. Fitzpatrick. Mr. Stwie. Miss Tenny.
▶ 1:33:58Miss Tenny. No. Mrs. Fishbach. Mrs. Fishbach. No. Mr. Moore. Mr. Moore. No. Miss. Van. Miss. Van. No. Mr. Fenstra. Mr. Fenstra. No. Miss. Maliotakis. Miss Maliaakus. No. Mr. Carrie. Mr. Carrie. No. Mr. Yakam Mr. Yakam. No. Mr. Miller. No.
▶ 1:34:24Mr. Miller. No. Mr. Bean.
▶ 1:34:26Mr. Bean. No. Mr. Moran.
▶ 1:34:29Mr. Moran. No.
▶ 1:34:32Mr. Neil.
▶ 1:34:33Mr. Neil. Yes. Mr. Dogget.
▶ 1:34:37Mr. Dogget. Yes. Mr. Thompson.
▶ 1:34:40Mr. Thompson. Yes. Mr. Larson.
▶ 1:34:43Mr. Larson. Yes. Mr. Davis.
▶ 1:34:46Yes. Mr. Davis, yes. Miss Sanchez,
▶ 1:34:50Miss Sanchez, yes. Miss Su, hi.
▶ 1:34:53Miss Su, yes. Miss Delben,
▶ 1:34:56Miss Delben, yes. Miss Chu,
▶ 1:35:00Miss Chu, yes. Miss Moore,
▶ 1:35:03Miss Moore, yes. Mr. Boille,
▶ 1:35:06Mr. Boille. Yes. Mr. Byer.
▶ 1:35:10Mr. Byer. Yes. Mr. Evans.
▶ 1:35:14Mr. Evans. Yes. Mr. Schneider,
▶ 1:35:18Mr. Schneider, yes. Mr. Petta,
▶ 1:35:21Mr. Petta, yes. Mr. Gomez,
▶ 1:35:26Mr. Gomez, yes. Mr. Horford, Miss Plask, Mr. Swisy, Mr. Hood Mr. Arrington Mr. Estus Mr.
▶ 1:35:55Fitzpatrick Mr. Stwie
▶ 1:36:03Mr. Stwie No Mr. for Horzford. Miss Plask Mr. Mr. Swazy
▶ 1:36:16How is Mr. Arrington recorded?
▶ 1:36:18Mr. Arrington is not recorded. Mr. Arrington, no.
▶ 1:36:28Chairman Smith,
▶ 1:36:29Chairman Smith, no. The clerk will report the vote.
▶ 1:36:59Mr. Chairman, the yeses are 16 and the nos are 23.
▶ 1:37:03There being 16 yeses and 23 nos, the amendment is not agreed to. Are there additional amendments uh to the amendment in the nature of a substitute?
▶ 1:37:10Mr. Chairman, I have an amendment at the
▶ 1:37:12Mr. Mr. Chairman, I reserve a point of
▶ 1:37:14A point of order has been reserved. Miss Delmeet, um can you suspend while the amendment is distributed?
▶ 1:37:30Proceed. Thank you, Mr. Chairman. Um my amendment is very simple. It restores the funding the IRS needs to do its job properly. The nearly 80 billion in enforcement and taxpayer service funding that from the inflation reduction act was delivering real results.
▶ 1:37:46The IRS hired 5,000 additional customer service representatives, raising taxpayer service levels from 15% to 87%, reducing call wait times from nearly 30 minutes to 2 minutes and jumpstarting the long overdue modernization of its decades old technology. But repeated Republican cuts to these investments have stalled this progress, leaving only 10 billion of the original funding.
▶ 1:38:13It's ironic that my colleagues across the aisle talk about how they want to root out waste, fraud, and abuse when they want to cut services to working families, but not when it impacts their wealthy friends and donors. The tax gap between the amount of taxes legally owed but not paid currently totals $700 billion annually.
▶ 1:38:34These are predominantly wealthy people who are dodging their taxes, and Republicans are effectively taking away the IRS's ability to ensure they're paying what they owe. Instead, Republicans are tasking the IRS with more responsibilities like overseeing a fellowship program with fewer resources. We need an IRS that can answer the phones, process returns efficiently, upgrade technology, and make sure everyone pays their fair share.
▶ 1:39:04And if Republicans truly want to improve the IRS, they should give them the resources they need and make sure they're using it to enforce our tax laws. I urge the adoption of this amendment and I yield
▶ 1:39:28for uh does the gentleman insist on his point of order?
▶ 1:39:39Does the sponsor of the amendment want to be heard on um Mr. Buchanan's point of order.
▶ 1:39:48He needs to say his point of order.
▶ 1:39:53yes, Mr. Chairman. Um I just want to be clear. We're talking about funding fellowship programs. I don't know why it's out of order to be talking about funding actually enforcement activity at the IRS. This seems like the basic thing that we should be focused on. Okay. I'm prepared to rule um on the amendment um as not being germanine and the point of order is sustained. The amendment is not in order.
▶ 1:40:26I disagree, Mr. Chairman.
▶ 1:40:28Are there additional amendments to the amendment in the nature of a substitute?
▶ 1:40:36Uh Mr. Chairman, I have an amendment at the desk.
▶ 1:40:40Mr. Chairman, I reserve the point of
▶ 1:40:42A point of order has been reserved. Mr. Dogget, will you suspend while the amendments distributed?
▶ 1:40:49Thank you.
▶ 1:40:51Proceed, Mr. Dogget.
▶ 1:40:53Thank you, Mr. Chairman. By its own terms, this bill is built to quote support the audit of selected taxpayers. My amendment simply makes certain that that capability is allowed to reach the only set of returns that selected taxpayer who has been placed off limits. That would be President Trump, his family, and the growing number of entities that they control.
▶ 1:41:17In effect, the amendment repeals for this narrow investment the tax immunity that the president has granted himself. uh we invest uh in building a tool to fund unpaid taxes and recover revenue for the treasury. And in the very same breath uh this has walled off an audit of the commander-in-chief who sets an example for all taxpayers in America, a very bad example.
▶ 1:41:44This bill even asked uh the IRS to prove its return on investment. And what better place to do that than with the activities of the Trump family. We can recruit the data scientist. We can give them all the analytics in the world, the transaction level testing, the modeling.
▶ 1:42:02And it will all amount to very little if we also tell them that one family, only one family in all of America, the most powerful family, the one that daily, corruptly enriches itself with private gain off the public trust.
▶ 1:42:16if that one family, the Trump family, is simply In what is among the most brazen acts of public corruption in the history of America, uh the president reached a settlement with himself, not only for himself, but for his family and the quote affiliated individuals, whoever they may be, sweeping immunity from the tax laws that no other American has ever enjoyed.
▶ 1:42:42The settlement papers themselves solemnly declare that the president will receive quote no monetary payment or damages of any kind. And yet the New York Times has estimated that this immunity is worth at the very least $100 million to him on a single longunning audit. Remember this is the president who said he would he would disclose all his tax returns but they were under audit. No payment of any kind.
▶ 1:43:11a tax bill that exceeds $100 million just quietly disappears for him. And how did this come about? Well, he appointed his former criminal defense attorney as the acting attorney general to sign the release. That individual cannot lawfully erase a tax audit and had no right to participate in this very corrupt deal. And when the companion $1.8 8 billion fund.
▶ 1:43:39That's the one that would have taxpayers pay those who assaulted police officers here on January six and Trump's attempt to overthrow our government. The Trump regime tried to sidestep that one. It's still unclear where it stands, but the audit immunity for President Trump, the real direct benefit for him and that actually lets him to walk away from his taxes, that all survived.
▶ 1:44:05Take note that 35 federal judges, 35 from both political parties, uh, appointed by presidents of both parties went to court to challenge this wretched settlement as the fraud that it truly is, singling out the very addendum that bars the government pursuing claims against the president and his family as an extraordinary benefit handed over for nothing in return. Special treatment in a lawsuit that the president never formally asked for.
▶ 1:44:34this type of relief. A federal judge has taken these allegations serious enough to reopen the case and order the president to answer. And former IRS and Justice Department officials have separately called this audit immunity quote breathtakingly improper, warning that it would create two tax codes, one for the Trump family and one for all the rest of us. My amendment adds a single duty to the very task list that this bill gives these new data scientists.
▶ 1:45:04Review for accuracy and support the audit of any return filed by the president, any immediate relative or entity. My colleagues say they want to invest in the agency. I'm offering them the chance to make the investment mean something because there's no sense in building the capability and then handcuffing it to spare Trump, the one taxpayer with the most to hide. If we believe in this workforce, let it do its work. Let it do its job without a special exemption for the powerful.
▶ 1:45:35I yield back and urge the adoption of the
▶ 1:45:38Does anyone wish to strike the last word on the amendment?
▶ 1:45:43Seeing none, the question is on agreeing to the amendment offered by Mr. Dogget. Um the clerk will call the role.
▶ 1:45:51Mr. Buchanan,
▶ 1:45:53Mr. Buchanan, no. Mr. Smith of Nebraska. Mr. Smith in Nebraska. No. Mr. Kelly. Mr. Kelly. No. Mr. Schwikert. Mr. Schwikert. No. Mr. Le Mr. Arrington. Mr. Estus. Mr. Smucker. Mr. Smucker. No. Mr.
▶ 1:46:24Hearn. Mr. Hearn, no. Mrs. Miller, Mrs. Miller, no. Dr. Murphy. Dr. Murphy, no. Mr. Kustoff,
▶ 1:46:37Mr. Kustoff, no. Mr. Fitzpatrick.
▶ 1:46:46Mr. Stwie.
▶ 1:46:47Mr. Stwie. No. Miss Tenny. Miss. Tenny. No. Mrs. Fishbach.
▶ 1:46:54Mrs. Mrs. Fishbach. No. Mr. Moore. Mr. Moore. No. Miss. Van Dy.
▶ 1:47:02Miss. Van. No. Mr. Fenstra. Mr. Fenstra. No. Miss Maliaakis.
▶ 1:47:09Miss Maliaakis. No. Mr. Kerry.
▶ 1:47:13Mr. Kerry. No. Mr. Yakam.
▶ 1:47:17Mr. Yakam. No. Mr. Miller.
▶ 1:47:21Mr. Miller. No. Mr. Mr. Bean. Mr. Bean. No. Mr. Moran. Mr. Neil. Mr. Neil. Yes. Mr. Dogget. Mr. Dogget. Yes. Mr. Thompson. Mr.
▶ 1:47:51Thompson. Yes. Mr. Mr. Larson.
▶ 1:47:53Mr. Larson. Yes. Mr. Davis. Mr. Davis. Yes. Miss Sanchez.
▶ 1:48:00Miss Sanchez. Yes. Miss Su.
▶ 1:48:03Miss Su. Yes. Miss Delben.
▶ 1:48:06Miss Delben. Yes. Miss Chu.
▶ 1:48:11Miss. Chu. Yes. Miss. Moore.
▶ 1:48:15Miss Moore. Yes. Mr. Bole.
▶ 1:48:19Mr. Boille. Yes. Mr. Byer.
▶ 1:48:21Yes. Mr. Byer. Yes. Mr. Evans.
▶ 1:48:25Mr. Evans. Yes. Mr. Schneider.
▶ 1:48:35Mr. Schneider. Yes. Mr. Petta. Mr. Petta. Yes. Mr. Gomez. Mr. Gomez. Yes. Mr. Horseford. Miss Plask. Mr. Suazi
▶ 1:48:55Mr. Leood
▶ 1:48:59Mr. Arrington
▶ 1:49:02Mr. Arrington No Mr. Estus
▶ 1:49:09Mr. Fitzpatrick
▶ 1:49:14Mr. Moran
▶ 1:49:16Mr. Moran no
▶ 1:49:19Mr. Horsford Miss Plask Mr. Swazy
▶ 1:49:28Chairman Smith
▶ 1:49:30Chairman Smith No. The clerk will report the vote.
▶ 1:49:55Mr. Chairman, the yeses are 16 and the nos are 23.
▶ 1:49:59There being 16 yeses and 23 nos, the amendment is not agre agreed to. Are there additional amendments to the amendment in the nature of a substitute?
▶ 1:50:08Seeing none, the question is on the adoption of the amendment in the nature of a substitute. All those in favor signify by saying I. I. Those opposed say no.
▶ 1:50:19In 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.
▶ 1:50:26Mr. Chairman, I move the committee favorably report HR7972 as amended to the House of
▶ 1:50:34The question is on the motion to favorably report HR 7972 as amended to the House of Representatives. The clerk will call the role.
▶ 1:50:41Mr. Buchanan,
▶ 1:50:42Mr. Buchanan, yes. Mr. Smith of
▶ 1:50:46Mr. Smith of Nebraska. Yes. Mr. Kelly.
▶ 1:50:50Mr. Kelly. Yes. Mr. Schwiker.
▶ 1:50:54Mr. Schwikert. Yes. Mr. Le Hood. Mr. Arrington.
▶ 1:51:01Mr. Arrington. Yes. Mr. Estus. Mr. Smucker. Mr. Smucker. Yes. Mr. Hearn. Mr. Hearn. Yes, Mrs. Miller. Mrs. Miller. Yes, Dr. Murphy. Dr. Murphy. Yes, Mr. Kustoff.
▶ 1:51:23Mr. Kustoff. Yes, Mr. Fitzpatrick.
▶ 1:51:30Mr. Stwie.
▶ 1:51:32Mr. Stwie. Yes. Miss Tenny. Miss Tenny. Yes. Mrs. Fishbach.
▶ 1:51:39Mrs. Fishbach. Yes. Mr. Moore.
▶ 1:51:42Yes. Mr. Moore, yes. Miss Vanine, Miss Vanine, yes. Mr. Fenstra, Mr. Fenstra, yes. Miss Malotakus, Miss Maliaakus, yes. Mr. Kerry,
▶ 1:51:57Mr. Kerry, yes. Mr. Yakam.
▶ 1:52:04Mr. Miller.
▶ 1:52:06Mr. Miller. Yes. Mr. Bean.
▶ 1:52:10Mr. Bean. Yes. Mr. Moran.
▶ 1:52:13Mr. Moran. Yes. Mr. Neil Mr. Neil. No.
▶ 1:52:19Mr. Dogget.
▶ 1:52:22Mr. Dogget. No. Mr. Thompson.
▶ 1:52:25Mr. Thompson. No. Mr. Larson.
▶ 1:52:29Mr. Larson. No. Mr. Davis. No.
▶ 1:52:33Mr. Davis. No. Miss Sanchez.
▶ 1:52:36Miss Sanchez. No. Miss Su Miss Su. No. Miss Delben,
▶ 1:52:43Miss Delben, no. Miss Chu,
▶ 1:52:47Miss Chu, no. Miss Moore,
▶ 1:52:51Miss Moore, no. Mr. Boille,
▶ 1:52:54Mr. Boille, no.
▶ 1:52:56Mr. Byer,
▶ 1:52:57Mr. Byer, no. Mr. Evans,
▶ 1:53:01Mr. Evans, no.
▶ 1:53:03Mr. Schneider,
▶ 1:53:05Mr. Schneider,
▶ 1:53:07Mr. Petta,
▶ 1:53:10Mr. Panetta. No. Mr. Gomez.
▶ 1:53:14Mr. Gomez. No. Mr. Horford. Miss Plask. Mr. Suazi. Mr. Le Hood. Mr. Estus. Mr. Fitzpatrick. Mr. Fitzpatrick. Yes. Mr. Yakam,
▶ 1:53:41Mr. Yakam, yes. Mr. Horford, Miss Plask. Mr. Swasy.
▶ 1:53:54Chairman Smith.
▶ 1:53:56Chairman Smith. Yes.
▶ 1:54:12The clerk will report the vote.
▶ 1:54:14Mr. Chairman, the yeses are 24 and the nos are 16.
▶ 1:54:18There being 24 yeses and 16 nos, the motion is agreed to in HR 7972 as amended is ordered favorably reported to the House. Without objection, I ask that staff be authorized to make technical and conforming changes to HR 7972 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 HR 9504, the taxexempt hospital transparency act introduced by representative Murphy.
▶ 1:54:45Tax exempt status is a privilege, not a right. And I appreciate that Dr. Murphy, someone who knows a thing or two about h how hospitals operate, is asking some of our largest health care empires in this country, our nonprofit hospitals to be more transparent about what and where they spend their money while enjoying tens of billions of dollars in tax benefits. I appreciate Dr.
▶ 1:55:11Murphy bringing to this effort his expertise and experience as we continue to work to lower health care costs for families across this country. Urge my colleagues to support this legislation. I'm pleased to recognize a gentleman from North Carolina, Mr. Murphy, for an opening
▶ 1:55:27Thank you, Mr. Chairman. Transparency in government or in any entity that the taxpayer pay for pays for is always a good thing. Transparency builds trust. Openness is the cornerstone of public confidence and public scrutiny is a powerful safeguard.
▶ 1:55:44There's been growing concern with certain nonprofit hospital spending practices that everything from and let me just say, let me just reiterate certain nonprofit hospitals, not everyone, and this is where it's very very important. uh everything from lavish executive spending compensation, overseas investments to advertising on sports stadiums and questionable charity care.
▶ 1:56:08Just remind my colleagues on this committee that the majority of most hospital funds come from the US taxpayer and accountability is the function is one of the functions of Congress. With burgeoning hospital consolidation and health care costs rising for all Americans, taxpayers and patients have a right to know that their hospital which receive generous substances and tax benefits from the federal government and how they are spending their money. There is something there is simply nothing wrong with that.
▶ 1:56:37As I've always said, the greatest stick disinfectant is sunlight. As we are all told in grade school, show your work. There's nothing wrong with that. I believe we've done a good job of striking the right balance with this policy by ensuring the requirements set forth are not overly burdensome, yet at the same time providing policymakers and the public with the necessary information to make informed decisions about whether or not certain hospitals are judiciously using an everinccreasingly scare
▶ 1:57:07tare taxpayer dollars. As I've said before, and I mean this very very uh strongly, I've been an equal opportunity offender when it comes to healthcare. And I'll call out anyone of those in the medical community, any sector who are not being good stewards of the taxpayer dollar or patient premiums. While the majority of nonprofit hospitals are being very good stewards, there are some that are not. This the American taxpayer needs to know the difference.
▶ 1:57:34At the same time, I do believe that we should require the same of our health insurance to see how they are using and abusing something called the medical loss ratio. But, Mr. Chairman, we'll wait and save that investigation for another day in what I hope will be the not too distant future. I want to thank his thank our chairman for his interest and support for this policy and I look forward to continuing our work together providing much neededed reforms in healthcare. With that, I'll yield back.
▶ 1:58:01I now recognize the ranking member from Massachusetts. Thank you. First, let's talk about what this bill doesn't do. It doesn't lower hospital costs. It doesn't reduce drug prices, and it doesn't address the affordability crisis. And it doesn't help hospitals that are struggling to keep the doors open succeed. Instead, it piles on duplicative reporting requirements with no clear benefit.
▶ 1:58:28Once again, our colleagues are invoking the healthc care transparency as some sort of cure all, as though more paperwork will somehow undo the damage that they're doing to our health care system with their big ugly tax bill scheduled to kick in after the November elections. It was in that bill that more than $1 trillion was cut out of the health care system, all to pay for tax cuts for billionaires. The result so far, 8 million Americans have lost their health coverage.
▶ 1:58:59Countless more are facing increased premium costs, higher deductibles, and skimpier coverage. That isn't just a threat to one's health care. It's a threat to our entire system. The harm doesn't discriminate. I guarantee that most members on this dis have one facility back home that is now struggling to stay afloat in the face of these cuts and cost shifts.
▶ 1:59:23They're cutting mental health care, maternity care, cancer care in an effort just to keep doors open. I hear from my hospitals weekly about the strain they are under. The last thing they need is another unfunded reporting mandate. They should be investing in patient care, not more compliance staff. This bill makes good on Republicans long-standing desire to undermine and disrupt the 340B program by cooking the books on reporting requirements.
▶ 1:59:54This bill will make it seem like hospitals are scamming the program and purposely omitting any data collection on how the facilities are using 340B dollars. Rather than lowering d drug prices, our Republican colleagues are going to increase them and the burden to penalize those who already are going to have limited access. It's no surprise that pharma is supporting this bill.
▶ 2:00:19The bill is a stalking horse for our Republican colleagues because this indeed in the long run will raise prices, a distraction from the real issues hospitals in our communities are facing and the technical merits because there really are none. Americans are about to feel the Republican big ugly bill right after the November election. This is an effort to get out front of the calamity that their legislation has caused. American families and the hospitals that care for them deserve better.
▶ 2:00:49I yield back my time.
▶ 2:00:51The committee will now proceed to consideration of HR 9504, the taxexempt hospital transparency act. 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. 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.
▶ 2:01:16I will now turn to Tom Bartal, chief of staff for the joint committee on taxation to provide a technical description of the amendment and the nature of a substitute with an emphasis on the changes made since introduction. and I ask that members hold their questions until after his presentation.
▶ 2:01:31Mr. Chairman, the members of the committee have before them two joint committee documents, JCX 26 and JCX 33 which describe HR 9504 and your amendment in the nature of a sub substitute. Your amendment nature of a substitute makes certain clerical uh changes to the underlying legislation and the proposal itself requires that all taxexempt hospital organizations report additional information on their form 990.
▶ 2:01:59This information is generally subject to public disclosure. In addition, the legislation specifically defines two addition specific classes of taxexempt hospital organization. It defines a large taxexempt hospital organization. This would be an organization that is uh not a critical access hospital, not a rural emergency hospital and has more than 100 inpatient beds.
▶ 2:02:27Would also define a high revenue taxexempt hospital organization. A high revenue taxexempt organization is not uh has net patient revenue in excess of $100 million annually for these two classes of uh uh taxexempt hospital organization. Uh there are requirements for additional and more detailed in uh information.
▶ 2:02:55The proposal also uh provides that for a one-year period that begins three years after the date of enactment of this legislation that the Government Accountability Office uh would study and report to the Ways and Means Committee and the Senate Committee on Finance. the additional cost to the Treasury for administering uh these new requirements, the additional cost to the hospital organizations to comply with these requirements.
▶ 2:03:26And in the case of the 25 largest revenue uh uh taxexempt hospital organizations, it would require the government accountability office to calculate a hypothetical income tax liability that would arise were those organizations subject to the income tax.
▶ 2:03:45Uh the proposal would be effective on the date of enactment and the staff of the joint committee on taxation has estimated that the effect on government revenues during the uh fiscal year uh periods of 2027 through 2036 would be negligible. That concludes my brief description of this legislation. I'd be happy to answer any questions that the members might have.
▶ 2:04:07Thank you, Mr. Bartold. Are there members with technical questions? Seeing none, are there members wishing to strike the last word? Mr. Smucker is
▶ 2:04:20Thank you uh Mr. Chairman. Uh thanks uh for bringing up this important bill today and I'd like to uh voice my strong support for this legislation. I appreciate Dr. Murphy's uh leadership on it.
▶ 2:04:35I'm uh proud to be an original uh co-sponsor because I think uh this is an important bill uh in the context of um the uh special status that we grant um um which we've done for a long time from the IRS code from the tax code uh we we nonprofit status and forgiveness on uh taxes in reg in exchange for
▶ 2:05:05a public benefit provided um by that organization. We've seen over the past few decades a a a large growth in the number of nonprofit organizations. They are now about 5% of the uh total GDP economic activity uh employ over 12 million uh individuals.
▶ 2:05:28And so I think uh it's incumbent on this committee to to revisit that uh relationship and that benefit um on on a periodic basis and particularly uh as it relates to uh nonprofit hospitals um you know again we have uh provided enormous tax advantages um in exchange for an expectation that they'll provide meaningful charitable benefits to their communities And you know
▶ 2:05:58I'll I'll uh repeat what Mr. Murphy had said. Many hospitals do that uh particularly rural hospitals uh critical access hospitals provide uh safety net providers. But we have to also um look at the total landscape and realize that it looks very different um than it did when many of these tax policies were created.
▶ 2:06:24We now have large nonprofit health uh systems that have become very sophisticated multi-billion dollar Um we've heard they own investment portfolios. They're certainly acquiring many physician practices. They advertise extensively and in many cases they operate very similarly uh to their for-profit competitors.
▶ 2:06:47A few weeks ago at the hearing here um with multiple hospital CEOs, I asked the CEO of the nation's uh nation's largest for-profit hospital system whether he believed that there was a meaningful difference, operational difference between forprofits and some of the nonprofit hospital systems that were represented there. His answer was really simple. It was just the short answer is no. Um he doesn't see a meaning meaningful difference.
▶ 2:07:15And so if if taxpayers are providing uh more than 37 billion annually in tax benefits to nonprofit hospitals and roughly it'd be roughly 260 over the next decade, Congress has an obligation to understand what taxpayers are receiving in return. And I think that's exactly what this bill does. Uh to be clear, it doesn't revoke anyone's tax exempt status. It simply asks hospitals uh to show their work.
▶ 2:07:44It requires more meaningful reporting on charity care, financial assistance, spending to address community health needs, advertising, health service lines, participation in 340B program uh with reporting broken down by individual hospital facilities instead of um massive systemwide um aggregates. Um and so this in my view really shouldn't be this is transparency that shouldn't be uh controversial.
▶ 2:08:12If if nonprofit hospitals are delivering extraordinary value to their communities, then this legislation will help them demonstrate that. And if taxpayers are subsidizing activities that do not advance charitable care, then Congress should know that as well. I think good policy begins with transparency and good information. So, I again thank Mr. Murphy for leading this effort. I urge my colleagues to support this bill and I yield back, Mr.
▶ 2:08:42Thank you. I recognize Mr. Thompson for five minutes.
▶ 2:08:46Thank you, Mr. Chairman. I move to strike the last word. Mr. Chairman, I'm deeply concerned about this legislation. Too many Americans are already struggling to access and afford basic health care. That challenge is even more acute in rural communities like the ones that I represent where every hospital is a nonprofit. In many of these communities, the local nonprofit hospital is the only hospital for miles. It's not just a health care provider.
▶ 2:09:15It's an economic anchor and a lifeline during emergencies. At a time when rural hospitals are already facing tremendous financial pressure from rising costs and reductions in uh federal healthc care funding, which will only be exacerbated by HR1, the big ugly bill, we should be looking for ways to strengthen them, not create new burdens that could further jeopardize their future and
▶ 2:09:45their service to our communities. While this bill is framed as a reporting requirement, and I might add that my Republican colleagues are increasing paperwork burden on these hospitals and adding yet another unfunded mandate. I'm concerned it could become the first step towards challenging the taxexempt status of nonprofit hospitals.
▶ 2:10:13That would place additional strain on providers that are already operating on thin margins and make it even harder for rural communities to maintain access to care. We should be focused on preserving access to quality, affordable health care, especially in communities that have the fewest alternatives. For those reasons, I urge a no vote on this piece of legislation and I yield back. Mr.
▶ 2:10:43gentleman yields back. Mr. Bean is recognized for five minutes.
▶ 2:10:47Thank you very much, Mr. Chairman. Good morning to you. I move to uh strike the last word. Good morning, committee. Uh it was going down exactly 250 years ago today, right up the road in Philadelphia. Have you thought about it? What they were doing? They were in the room, locked in the room, debating Jefferson's declaration. Lots of amendments were being discussed.
▶ 2:11:14You can only imagine the uh the great the great thinkers of the day debating should we go forward with declaring we have two things today. I you know in this room they don't have uh one we have air conditioning. I think we're all grateful for that because I know it was hot uh in Philadelphia. We also have the fiveminute clock. I don't know if they had a fiveminute clock or not.
▶ 2:11:42Uh probably not the one that's staring me in the face right now, but it um in this room uh often limits our ability to debate and engage in ideas at a at a great level. And we we hopefully solve or at least attempt to solve big problems for our country and challenges.
▶ 2:12:00uh we have uh met after hours trying to build consensus particularly in health care the healthc care arena I've done some after hours uh thanks to chairman Smith we've been able to use this room we've gotten rid of the clock and brought in thinkers of health care and industry leaders to try to come together and build consensus we if we're going to fix the deficit which we have to we have to solve health care and we need to improve healthcare put patients first of of
▶ 2:12:30how that goes. And we've had some great debate. We've had great debate in the uh pharma executives and arena. We need them healthy. We need them competitive. We need to keep uh our country on the cutting edge of of uh of of technology of how they design our medications. We need uh managed care to help manage the the patient and put the patient first and get and bring value to the taxpayers.
▶ 2:12:55And we need providers like hospitals that are able to uh give us all that we want, the absolute best care, patient centered and and so all that being said, the consensus is still being formed right now. I support Dr. Murphy and if you want to watch one of the great five minute debates of his five minutes of coming in and really saying that the system is broken, we need to do better. Uh I support him.
▶ 2:13:25He I know his heart is there. I believe the right answer is to vote yes on this bill. It advances the cause of uh of moving forward. However, I just feel like the consensus is still not there. I've heard from many hospitals in Florida, several in my my region that says, "Wait, we thought we were talking. We thought we were having a discussion of how we can improve health care and uh and to continue to go on." Transparency is great.
▶ 2:13:54It also has some ways that it changes how we how we fund hospitals. So, I want to say vote yes on the bill, but I and I know he is. I'm already looking at him. He's in because nobody is scared of the debate more than uh Dr. Murphy when it comes to to to health care. Uh I u appreciate that very much. Florida hospitals, you know, we're still struggling. We we are already extremely efficient.
▶ 2:14:18Uh and then some of the caps of of what we've what we've limited of their growth has has brought great concern. But yet we support transparency. We support the debate of going forward. So vote yes. Thank you for uh being open. You're open. You came and spoke Dr. Murphy at one of the consensus. Uh you were very lively and uh energized the room.
▶ 2:14:43So, with that, uh, we're voting yes today, but I just hope that this committee will continue to debate so we can have a product that, uh, that moves America forward. Happy birthday, America. Yield back.
▶ 2:14:58As gentleman yields back, I'd now recognize Mr. Davis for five minutes to strike the last word.
▶ 2:15:04Thank you, Mr. Chairman. I move to strike the last word. And I certainly appreciate Dr. Murphy's skill, passion, and interest in health care, in healthc care delivery.
▶ 2:15:18But one year after Donald Trump and the Republicans cut over $1 trillion out of health care to fund tax cuts for billionaires and big millions of people have lost health Millions more are crushed by exploding health care costs. Hospitals are closing and cutting services and staff.
▶ 2:15:46People face the impossible choice between seeing a doctor, paying rent, eating, or getting gasoline. Yet, the Republican leadership is moving a bill that does absolutely nothing, nothing to lower health costs or stabilize hospitals.
▶ 2:16:13More than 175,000 have lost their Medicaid chip or ACA coverage after the GOP's big ugly bill. Premiums for Illinoans receiving Aka tax cuts increased by an average of this year.
▶ 2:16:39Illinois hospitals alone are expected to lose just under $ 31.3 billion annually with 26 healthc care providers at risk. Now cuts closing or have closed including one across the street from where I live.
▶ 2:17:07At a time when we should be helping after we cut $1 trillion dollar from health care, the GOP solution is a bill with additional paperwork rather than tax credits to help people buy health insurance and rather than funding to help hospitals hire health professionals to care for people.
▶ 2:17:34I just happen to have more hospital beds in my district than any other member of My professional work background includes working with health centers to provide lowcost health care to people in need.
▶ 2:17:52I co-led the bipartisan rural and underserved health task force where we recognized that rural and underserved face similar challenges as urban This bill is an offensive answer to the urgent health care crisis facing The bill does absolutely nothing to lower cost for patients.
▶ 2:18:21It does nothing to help hospitals provide lowcost care. It does nothing to push farmer to lower drug costs. The bill rejects the needs of hospitals in urban areas by carving out protections for certain rural hospitals, ignoring the very work done bipartisansly by members of this committee.
▶ 2:18:48It unfairly targets hospitals solely on the basis of their size without accounting for their unique cost structures, especially for academic health systems and teaching hospitals who invest in their communities and ensure access to care for patients with complex highly acute care needs such as level one trauma, care,
▶ 2:19:18needle nail intensive care, and burn care. These health systems and hospitals train tomorrow's healthc care workforce and in medical research. Rather than helping health systems and hospitals focus on treating patients, train future health care providers, conduct cutting edge research, and serve their communities.
▶ 2:19:47This bill forces these health entities to divert critical funding to administratively burdensome requirements. So I strongly oppose the taxexempt hospital transparency act for its abject failure to meet the healthc care crisis facing Americans hospitals and communities. And Mr.
▶ 2:20:10Chairman, I ask unanimous consent to submit to the record statements by the American Hospital Association, the Association of American Medical Colleges, and America's Essential Hospitals, voicing their concerns about the Tax Exempt Hospital Transparency Act. And I yield back.
▶ 2:20:34Without objection, so order. The gentleman yields back. I recognize to strike the last word, Miss Sanchez. Thank you, Mr. Chairman. I support the goal of added transparency for nonprofit hospitals and large health systems. However, this legislation before us is unvetted. There is currently no singular source of public data on hospital costs and finances.
▶ 2:21:01Medicare costs reports are publicly accessible, but may be misreported or inconsistently reported. Audited financial statements are not universally available and often only completed on the system level and private nonprofit hospitals or health systems can have their 990s audited by the IRS. However, multiple investigations have found major inconsistencies and errors in these forms. My colleagues across the aisle and I can agree.
▶ 2:21:32340B participants now spend less on uncompensated care compared to earlier 340B participants. And unlike non-hosco covered entities, hospitals are not required to reinvest their 340B savings. And that's why I support the intent of this bill. We do need transparency and I think it would be good for the public to know which specific drugs hospitals acquire under this program.
▶ 2:22:01Hospitals also currently do not need to report 340B drug volume or revenue and how they use this revenue, including whether they fund safety net services. I think there is much that we can work together on to improve hospital transparency, but unfortunately this bill only adds a reporting burden and compliance costs for hospitals while failing to improve our system.
▶ 2:22:28And I'm sure we all have heard how much reporting burdens and compliance burdens eat into the um ability of hospital systems to say to stay in in service. This bill ultimately fails to create a solution to ensure that 340B savings are being reinvested into the communities that they are intended to serve. We need to hold some of these largely taxpayer funded hospital systems accountable.
▶ 2:22:57But this effort makes clear to me that the Republicans are only piling on to the $1 trillion in health care cuts they passed almost one year ago today. And for these reasons, I cannot support this bill. I urge a no vote and I yield back the balance of my
▶ 2:23:17I recognize Mr. Dugget to strike the last word.
▶ 2:23:20Well, big pharma strikes again today. Transparency is an important uh gold enabling uh enforcement of our federal rules, assuring reasonable spending, and allowing the Congress to consider reforms. But when reporting requirements are duplicative, vague, or near impossible to interpret, as is true with this bill, they only serve to provide more confusion and room for error.
▶ 2:23:47And that's what we have in this rush bill with cherrypicked entities and data to create a misleading narrative about the 340B program, one of big farmers favorite scapegoats. Republicans have long opposed doing anything to restrain big pharma monopoly prices. Instead, working to undo the work that Democrats did to establish an overly narrow price negotiation program.
▶ 2:24:14Now, in another gift to the industry, uh, which has twice as many lobbyists as there are members of Congress, uh, the nonprofit hospitals are being targeted. They are the most vulnerable in our They're dealing with the most vulnerable neighbors in our communities and they're getting targeted instead of big pharma which is charging Americans the highest prices for pharmaceuticals in the world and remains one of the most profitable industries in America.
▶ 2:24:44Big pharma clearly has a strangle hold on this Congress. And while we still have a little transparency into how much manufacturers and uh are are contributing to the research and development of new treatments and cures versus the simple marketing and repackaging of older drugs. This bill demands that hospitals report to be clear on that.
▶ 2:25:08We don't know enough about what big pharma is doing and why it is devoting more to advertising than to helping us get new cures. But this bill is demanding great uh specificity from nonprofits and asking that they report on what value they derive from the 340B pricing discounts using an inaccurate comparative reference price that misleads and inflates what they're actually receiving.
▶ 2:25:36requiring reporting on what discounts hospitals collect through 340B was based on commercial insurance prices that have no bearing on what these hospitals actually receive through much lower group negotiated prices. This requirement in the bill serves only to exaggerate the claim that 340B is a cash cow for nonprofit hospitals.
▶ 2:25:59Meanwhile, the hospitals are rightfully required to use the modest funds from 340B discounts to improve care to the underserved. Big pharma has never been required to reinvest its unreasonable profits into R&D or lower prices or any other public benefit.
▶ 2:26:16The 340B program is not perfect and I would support some reforms particularly with transparency uh that I think could be improved, but in accurate analysis only undermines an important safety net program supporting our lowincome and uninsured consumers. And it's unfortunately that's a population of Americans that has grown substantially because of Republican sabotage of the affordable Obamacare program and trying to turn it into Trump.
▶ 2:26:45nothing care for millions of Americans. Indeed, reports out this week indicate that more than one of every 10 Americans who has relied on the marketplace to get their health insurance, and they did that last year. They no longer have it this year because of Republican policies. So, I strongly urge my colleagues to reject this measure, and I yield back.
▶ 2:27:10Miss Su is recognized to strike the last word. Just one year ago, Republicans cut nearly $1 trillion dollars from our health care system in order to give tax breaks to the wealthy. And hospitals are carrying much of that burden. Now, on top of those cuts, this bill would impose duplicative and burdenome reporting requirements on hospitals that are already struggling to keep their doors open.
▶ 2:27:33While this bill correctly recognizes that these requirements could be more burdensome for critical access hospitals and rural emergency hospitals, the bill fails to recognize that safety net and dish hospitals face many of those same financial pressures. As we speak, Jackson Hospital, just outside of my district in Montgomery, Alabama, is facing immediate closure.
▶ 2:27:57Under this bill, hospitals like Jackson would likely have to use limited resources to hire more accountants and compliance officers to navigate the red tape in this bill instead of hiring new nurses and doctors or keeping their lights on. We should be making it easier for hospitals to keep their doors open, not harder. Since Republicans refused to extend the ACA subsidies last year, over 22,000 Alamians that once had health care have lost their health care.
▶ 2:28:27To add insult to injury, members received this this bill late last night, just 26 hours before today's m today's markup. That is simply not enough time for members or stakeholders to fully review legislation with consequences as significant as these. Issues as serious as these require a thoughtful legislative process and meaningful stakeholder engagement.
▶ 2:28:53I support efforts to increase transparency and lower health care costs, but this bill falls far short of that standard, and I look forward to working with my colleagues across the aisle on a better approach. But I must vote no on this current bill. And I yield back the balance of my time.
▶ 2:29:10Further members to strike the last word. Miss Chu is recognized for five minutes.
▶ 2:29:15I move to strike the last word. I have to say I find today's markup incredibly Americans Americans are facing a healthc care affordability crisis. Across this country, families are making impossible choices every day. They are skipping prescriptions because they can't afford them. They're delaying doctor's appointments because they're worried about the bill.
▶ 2:29:39Millions of Americans are facing higher premiums, higher out-ofpocket costs, and because of Republican policies, many are losing their health care altogether. And yet, what is this committee doing? We are debating whether nonprofit hospitals should provide additional information on an IRS form. Nonprofit hospitals already submit extensive information to the IRS, to CMS, and to the public.
▶ 2:30:07If Congress believes additional information is necessary, then we should be able to answer a simple question. How will any of this lower costs for patients? Does it lower the cost of a single prescription drug, reduce a family's insurance premium, lower a hospital bill? Does it help a single American keep their health care coverage? This legislation does none of those things.
▶ 2:30:37At a moment when hospitals are preparing to care for more uninsured patients and communities are struggling to keep health care within reach, we're asking those hospitals to spend more time complying with new federal reporting requirements. This committee has the authority to tackle the real drivers of health care costs. We should be lowering prescription drug prices. We should be strengthening Medicare's ability to negotiate lower prices.
▶ 2:31:07We could be expanding access to affordable coverage. We could be helping families who are choosing between filling a prescription and paying their rent. That's what's so disappointing about today's markup. Every hour this committee spends on legislation that doesn't lower health care costs is an hour we're not spending helping families who are worried about losing their coverage, affording their prescriptions, or paying their medical bills.
▶ 2:31:37We must do better than this. I yield back.
▶ 2:31:42Thank you. Dr. Murphy is recognized to strike the last word.
▶ 2:31:45Thank you, Mr. Chairman. I I appreciate all my my Democratic colleagues um comments. Actually, it seems like they support it more than they don't like it, but they're just afraid to like it because it's Republican. Um you know, I I I find this very interesting. I I appreciate all the different constituencies that u were involved in writing and rewriting this bill, especially the American Hospital Association because a lot of uh the carveouts, a lot of things that we did were at uh their suggestions and their request, which is great.
▶ 2:32:14I find it troublesome actually really troublesome given the amount of fraud that's now being found out around the country the what's going on in Minnesota what's happened in Los Angeles and all the different things that we actually are going to have folks that vote against this there's no reason that these are American taxpayer dollars and I guys tell you probably the only person on the dis here that's been involved in an active role uh being in part of hospital administration when I was chief of staff is
▶ 2:32:45uh I had a I had a great hospital system, a great nonprofit hospital system that does a fantastic job, but we have some bad actors and unless uh as I said in my opening comments, it's part of our job is oversight and when we have bad actors and you guys talk about the billionaires and all this other stuff, look at some of the uh nonprofit CEO compensation that goes around this country. This is a little bit disconcerting that we you guys are saying one thing and then attacking it in the same breath.
▶ 2:33:13um we have some real problems and if we're not going to be good stewards of the taxpayer dollars then we just need to walk away. And by the way, all this burdensome stuff, um guys, they have the information already. And by the way, this is nonprofit, non-t taxed. All we're asking them to do is put it on the tax form. Put it on the tax form. And again, I'll say this again and again and again. It's very simple. It's fourth grade stuff. Show your work.
▶ 2:33:43Let us all be reassured that the good actors are doing the good things. And if there are bad actors, they're the ones who are raising probably the most alarm. They're the ones who are probably raising the most alarm. And given the amount of quote effort, I would submit this will take probably about six or eight hours um from a hospital system to just move one data from the other. Maybe a day or two, but boy, it's surely not going to do anything to uh take down huge massive CEO compensations.
▶ 2:34:11So, you know, I know this legislation does not save the whales. It does not do everything that is perfect and they want it to do. I don't know what the hell it has to do with big pharma. This is not has nothing to do with that. I don't know where that argument comes from. This is merely about transparency and we want transparency in everything. We went after insurance companies. I'm happy for us to go after big pharma. Look, we talk about drug prices. Thank God President Trump has done what he's done to lower drug prices.
▶ 2:34:42Um it's a big deal for the average American. And if nonprofits, we have some bad actors that are jacking up prices to do things that they shouldn't be doing, that's something the American public needs to do. That will lower prices. You know, hospital bills can be a lot. Things cost a lot in hospitals. But transparency is never a bad thing. A lot of fraud going on. We have a lot of carveouts for those indiv those individual hospitals um that need it.
▶ 2:35:08But um this is long overdue as we look at our entire health care system because people cannot afford it. And any avenue that we do should be a bipartisan effort to look at where we're spending money, where we should not be spending money. And if it is in hospitals that are doing things, even if in 340B program, which we don't have jurisdiction, but why not spread a little sunlight on that because there are some problems with the 340B program.
▶ 2:35:36There are people who are abusing um the 340B program in the country. So, look, it's very easy. show your work and sunlight's the best disinfectant and uh let's just uh let the American people know what's going on in a place where they have tax privilege status. With that, Mr. Chairman, I'll yield back. Thank you. Any others wishing to strike the last word? Seeing none, are there any amendments to the amendment in the nature of a substitute? Mr. Byer.
▶ 2:36:09Thank you, Mr. Chairman. I have an amendment at the desk.
▶ 2:36:11Okay. I've
▶ 2:36:13Mr. Chairman, I I reserve a point of
▶ 2:36:15Point of order has been reserved.
▶ 2:36:19clerk will distribute the amendment, and I ask the gentleman to suspend while the clerk distributes Gentlemen may proceed.
▶ 2:36:44Thank you, Mr. Chairman. Five minutes. Mr. Chairman, this amendment is simple. It would exempt from these new administrative burdens any hospital that's facing funding or revenue cuts from the OBBBA. I understand and share the appetite to get more data on the community benefits that hospitals provide. I'm very sympathetic to what Dr. Murphy is trying to do. Um, I too have been uh distraught at leaders of nonprofit hospitals making three and $6 million a year.
▶ 2:37:11But and tax exempt status comes with concrete responsibility to provide care to the communities that rely on these hospitals. But it has to be done in a way that avoids unnecessarily adding to hospitals administrative costs. And it cannot add to the severe challenges that my Republican friends have already imposed on these same hospitals. Last year, congressional Republicans in the White House cut $1 trillion dollar from Medicaid.
▶ 2:37:33Those cuts, in addition to denying healthc care coverage to millions of people, will cut funding for many of our nation's most vulnerable hospitals, we're already seeing this severe impact on rural hospitals. A Harvard study found that 85% of the hospitals most threatened by the Republican healthc care cuts are actually located in urban areas. And those same hospitals are also facing new indirect costs from the big bill. We've seen millions of people lose healthcare coverage over the past year, but they don't stop getting sick because they don't have insurance.
▶ 2:38:03They also don't stop going to the hospital and receiving care when they're there. Some hospitals are in financial situations where they can absorb that additional cost, but many are not. And adding new admin administrative burdens and red tape is only going to add to the challenges for all those hospitals. Implementing this bill will require them to spend more money that does not go directly to patient care. My colleagues understand that. That's why they're written in a narrow car already for some vulnerable hospitals.
▶ 2:38:31But these are not the only hospitals that are facing challenges. So my amendment is a common st common sense solution to avoiding some more administrative costs to our most vulnerable hospitals. We have to be very careful when we propose requirements like this that the cost to implement them doesn't translate to hospital closures or get transferred to patients hospital bills. We can't risk further closures nor higher bills for patients. I urge my colleagues to vote yes.
▶ 2:38:59Thank you, uh, Mr. Byer. I I do want to, uh, present my objection to the amendment. Um, I want to remind folks that our legislation invested $50 billion in rural health care through the working families tax cuts bill. I I realize that the amendment is probably more of a messaging amendment than anything else, but on a technical basis, virtually impossible to enforce or detect what uh would trigger various action.
▶ 2:39:30So on on its uh drafting I I have concerns, but certainly I think on the practical side of things, $50 billion invested uh in rural health care, I think speaks for itself. And it does represent the single largest investment in rural health care in more than 20 years.
▶ 2:39:49and uh myself uh I represent a significantly rural constituency, many critical access hospitals and I appreciate their communication on details and concerns and uh we want to move forward in a productive fashion. Uh but certainly uh I would need to I I will need to object to the amendment here and urge a no vote. Thank you. Anyone wishing to uh strike the last word on the amendment to speak on the amendment?
▶ 2:40:20Seeing none,
▶ 2:40:25Miss Moore is recognized for five to strike the last word.
▶ 2:40:31I'd like to yield my time to Mr.
▶ 2:40:34Thank you, Congresswoman Moore. The only thing I'd say is this bill already exempts rural hospitals. What this amendment is trying to do is to get at the urban hospitals in the suburban hospitals hard hit by the OBBA that are not exempted in this bill. So the the $50 billion rural healthc care thing I approve. I'm glad we've done that for the rural hospitals. Those are not the ones at risk from from Dr. Murphy's bill. I yield back.
▶ 2:41:00Thank you. Does anyone else wish to speak on the amendment and strike the last word? Seeing none, the question is on agreeing to the amendment offered by Mr. Byer. All those in favor signify by saying yes.
▶ 2:41:13Those opposed, no. No.
▶ 2:41:16In the opinion of the chair, the nos have it. The clerk will call the role.
▶ 2:41:20Mr. Buchanan,
▶ 2:41:22Mr. Buchanan, no. Mr. Smith of Nebraska.
▶ 2:41:26Mr. Smith of Nebraska. No. Mr. Kelly.
▶ 2:41:30Mr. Kelly. No. Mr. Schwikert. Mr. Schwikert. No. Mr. Leood. Mr. Arrington, Mr. Estus, Mr. Estus, No. Mr. Smucker, Mr. Hearn, Mr. Hearn, no Mrs. Miller.
▶ 2:42:03Mrs. Miller, no. Dr. Murphy, Dr. Murphy. No. Mr. Kustoff. Mr. Kustoff. No. Mr. Mr. Stwie.
▶ 2:42:26Miss Tenny.
▶ 2:42:30Miss Tenny. No. Mrs. Fishbach.
▶ 2:42:34Mrs. Fishbach. No. Mr. Moore, Miss Vanine, Miss Vanine, No Mr. Fenstra, Mr. Fenstra, No Miss Maliaakis, Miss Maliaakis, no Mr. Carrie. Mr. Kerry, no. Mr. Yakam, Mr. Yakam, no. Mr.
▶ 2:43:02Mr. Miller, no Mr. Bean.
▶ 2:43:04Bean, no.
▶ 2:43:05Mr. Bean. No. Mr. Moran.
▶ 2:43:09Mr. Moran. No. Mr. Neil.
▶ 2:43:14Mr. Neil. Yes. Mr. Dogget. Mr. Dogget. Yes. Mr. Thompson.
▶ 2:43:21Mr. Thompson. Yes. Mr. Larson.
▶ 2:43:24Mr. Larson. Yes. Mr. Davis. Mr. Davis. Yes. Miss Sanchez. Miss Sanchez. Yes. Miss Su. Miss Su, yes. Miss Delen, Miss Delben, yes. Miss Chu, Miss 2, yes. Miss Moore, Miss Moore, yes. Mr. Bole,
▶ 2:43:49Mr. Boille, yes. Mr. Byer,
▶ 2:43:52Mr. Byer. Yes. Mr. Evans.
▶ 2:43:56Mr. Evans. Yes. Mr. Schneider.
▶ 2:44:00Mr. Schneider. Yes. Mr. Petta.
▶ 2:44:03Mr. Mr. Petta, yes. Mr. Gomez,
▶ 2:44:07Mr. Gomez, yes. Mr. Horford, Miss Plask, Mr. Swazy, Mr. Le Hood, Mr. Arrington, Mr. Smucker Mr.
▶ 2:44:36Fitzpatrick Mr. Stwie Mr. Moore
▶ 2:44:51Mr. Moore No Mr. Horseford Miss Plask Mr. Mr. Swazy. Chairman Smith. Chairman Smith. No.
▶ 2:45:43Cler will record.
▶ 2:45:45Mr. Chairman, the yeses are 16 and the nos are 21.
▶ 2:45:49The eyes being 16, the nose being 21, the amendment is not adopted. Are there additional amendments?
▶ 2:45:58Miss Chu.
▶ 2:45:59Mr. Chair, I have an amendment at the
▶ 2:46:01Mr. Chairman, I reserve a point of
▶ 2:46:03Point of order has been reserved. If the gentle lady will suspend while the amendment is being distributed. The gentle lady may proceed.
▶ 2:46:31Mr. Chair, if this committee is truly interested in transparency, then let's be transparent about the biggest driver of prescription drug costs in America, the prices charged by pharmaceutical companies. My amendment is simple. This bill requires hospitals to report information about the savings they receive through the 340. Would the member suspend please?
▶ 2:46:54I would ask all those present to take your conversations out in the hallway uh out of respect for the conversation happening and especially the introducer of the amendment uh Miss Chu. Miss Chu, you may
▶ 2:47:08This bill requires hospitals to report information about the savings they receive through the 340B program. My amendment simply asked the secretary to use that same information to calculate how much those hospitals would have saved if pharmaceutical manufacturers charged Americans the same prices paid in other developed countries under a most favored nation benchmark.
▶ 2:47:33This is information Congress should have because if we're going to scrutinize the discounts hospitals receive, we should also scrutinize the prices that makes those discounts necessary in the first place. The reality is that Americans pay three to four times more for many prescription drugs than patients in other developed countries. That's why programs like 340B are so important.
▶ 2:48:00Safety net hospitals rely on those discounts to stretch limited resources and continue serving their communities. But instead of doing anything to lower drug prices, this committee is asking hospitals to fill out more paperwork. Democrats took historic action by allowing Medicare to negotiate lower prescription drug prices, capping insulin prices at $35 for Medicare enrolles, and lowering out-of- pocket health care costs.
▶ 2:48:29But we did it without a single Republican vote. We know there's more work to do. This amendment helps illustrate exactly why. It doesn't require hospitals to collect any new information. It doesn't create any new reporting burden. It simply asks Treasury to calculate how much hospitals and the patients they serve could have saved if Americans paid the same fair prices that our peer nations pay for prescription drugs.
▶ 2:48:59If this committee truly wants transparency, then let's have transparency about the cost of America's skyigh drug prices. I urge adoption of my amendment, and I yield
▶ 2:49:11Thank you. Are those wishing to strike the last word speaking to the amendment? Dr. Murphy is recognized for five
▶ 2:49:18Yeah. Thank you. Um, yeah. Again, I'm going to say again, like I've said a couple times before, the hospitals for the original bill are not making any new data. They're just putting it onto their tax form. And the issue with the 340B program is not much how much hospitals uh is primarily how much hospitals are charging patients, not how much they're paying for it. Um, I I think it's it's kind of interesting.
▶ 2:49:44I think it's kind of nice actually uh that we want to talk about um you know what the drug prices are charged in other countries um because Americans are paying way too much for drugs and you know I think the president's made some inroads on that. So you know I applaud my colleague for that but again let's get back to the issue of 340B program. It's about how much they're charging the patients not how much they're paying for the drug.
▶ 2:50:08So, I would just say, hey, happy to work on this, but I don't think this is ready for prime time as far as what this uh this bill goes. Yield back. Thank you. Anyone else wish to strike the last word? Seeing none, the question is on agreeing to the amendment offered by Ms. Chu. All those in favor say signify by saying yes. I
▶ 2:50:32All those opposed say no.
▶ 2:50:34No. Opinion of the chair, the nos have it. Cler call the role.
▶ 2:50:39Mr. Buchanan.
▶ 2:50:41Mr. Buchanan. No. Mr. Smith of Nebraska. Mr. Smith in Nebraska. No. Mr. Kelly. Mr. Kelly. No. Mr. Schwikert. Mr. Schwikert. No. Mr. Le Hood. Mr. Arrington. Mr. Estus. Mr. Estus. No. Mr. Smucker.
▶ 2:51:16Mr. Hearn. Mr. Hearn. No. Mrs. Miller. Mrs. Miller. No. Dr. Murphy. Dr. Murphy. No. Mr. Kustoff. Mr. Kustoff. No. Mr. Mr. Stwie. Miss Tenny. Miss Tenny. No. Mrs. Mrs. Fishbach.
▶ 2:51:46No. Mr. Moore. Miss. Van. Miss. Vanine. No. Mr. Fenstra. Mr. Fenstra. No. Miss Mr. Kerry. Mr. Kerry. No. Mr. Yakam.
▶ 2:52:09Mr. Yakam. No. Mr. Miller.
▶ 2:52:14Mr. Miller. No. Mr. Bean.
▶ 2:52:17Mr. Bean. No. Mr. Moran.
▶ 2:52:20Mr. Moran. No.
▶ 2:52:23Mr. Neil.
▶ 2:52:30Mr. Dogget. Mr. Dogget. Yes. Mr. Thompson.
▶ 2:52:37Mr. Thompson. Yes. Mr. Larson.
▶ 2:52:41Mr. Larson. Yes. Mr. Davis. Mr. Davis. Yes. Miss Sanchez. Hi.
▶ 2:52:48Miss Sanchez. Yes. Miss Soul.
▶ 2:52:51Miss Su. Yes. Miss Delen. Miss Delen. Yes. Miss Chu. Miss Chu. Yes. Miss
▶ 2:53:01Miss Moore. Yes. Mr. Boille.
▶ 2:53:04Mr. Bole. Yes. Mr. Byer.
▶ 2:53:08Mr. Byer. Yes. Mr. Evans.
▶ 2:53:16Mr. Schneider.
▶ 2:53:23Mr. Petta.
▶ 2:53:25Mr. Petta. Yes. Mr. Gomez. Mr. Gomez. Yes, Mr. Horsford. Miss Plask. Mr. Swazy, Mr. Le Hood, Mr. Arrington, Mr.
▶ 2:53:51Smucker, Mr. Fitzpatrick, Mr. Stwie, Mr. Moore,
▶ 2:54:07Mr. Moore, No Miss Malotakus. Miss Malotakus, no.
▶ 2:54:19Mr. Neil,
▶ 2:54:21Mr. Neil, yes. Mr. Evans.
▶ 2:54:28Mr. Evans. Yes,
▶ 2:54:30Mr. Schneider.
▶ 2:54:32Mr. Schneider. Yes, Mr. Horford. Miss Plask. Mr. Swazy.
▶ 2:55:39Chairman Smith. Chairman Smith. No. Clerk clerk will record. Mr. Chairman, the yeses are 16 and the nos are 21.
▶ 2:56:01There being 16 eyes and 21 nazs, the amendment is not adopted. Are there additional amendments?
▶ 2:56:07Mr. Chairman, I have an amendment at the
▶ 2:56:09Mr. Dogget.
▶ 2:56:10Mr. Chairman, I reserve a point of
▶ 2:56:12Point of order has been reserved. Gentlemen will suspend while the amendment is being distributed.
▶ 2:56:34Good short. Good to go.
▶ 2:56:40You may proceed.
▶ 2:56:42Thank you very much, Mr. Chairman. And uh this bill and the Republican majority are today targeting taxexempt hospitals. What they should be concerned with is a taxexempt president. My amendment is really straightforward. It provides that this bill shall not take effect until two sets two acts of selfdeing by the administration are undone.
▶ 2:57:04The president's $ 1.8 $8 billion slush fund and the secret addendum that grants him and his family immunity from IRS audit. I'm not against transparency. This bill significantly expands the reporting requirements for hospitals and I understand that. But it's important that we address the real issue here about President Trump. You know, it's interesting.
▶ 2:57:28We've had within the last day or two a financial disclosure statement of $2.2 2 billion dollar that the president's uh earned apparently last year while he served as our What those stories don't reveal is whether he's going to pay a dime of taxes on those uh earnings.
▶ 2:57:49Uh we know that in a number of prior years, uh he had profitable operations and paid $750 in taxes two years in a row. And in another year, he didn't pay a dime. That's why it was under audit. And so, uh, we know of the slush fund here that it was one negotiated with a man who was recently his criminal defense attorney.
▶ 2:58:16And that second, in addition to the slush fund, is his immunity agreement. He brought a 10 billion dollar lawsuit against himself uh over the fact that there was disclosure uh of some of his tax returns. That was done by a government contractor named Charles Little John, who unlawfully disclosed the tax returns of thousands of Americans, including the presidents. It was wrong.
▶ 2:58:42And when other victims of that same leak sued, the government's lawyers argued that the IRS was not liable precisely because middle little John was a contractor, not an employee of the IRS. Also of note is the fact that all this occurred under President Trump's administration during his first term of office. It was his IRS that was in charge.
▶ 2:59:05Yet somehow out of that case about a contractor's leak, the president's former lawyer produced an addendum barring the IRS from ever auditing or pursuing the president or his family for returns they filed. And that would include any return that they filed on that $2.2 2 billion from last year. For years, the president told the American people he just couldn't release his returns because they were under audit. That was a lie.
▶ 2:59:35Nothing in the law prevents any taxpayer from releasing it returns under audit as Richard Nixon did. Every president for a half a century has released returns. And under our Democratic majority, this committee investigated whether the IRS was actually auditing the president.
▶ 2:59:53And we learned that though there is a mandatory presidential audit program in law after Richard Nixon's violations, we learned that there was one partially contreated completed audit and that in four years of the Trump presidency, the law was basically ignored before the president became uh came into office. An audit was already underway on questionable claims he had made go dating back to 2010.
▶ 3:00:22claims that involve millions of dollars. It is th it is that audit that the president would have ended through this deal with his former criminal defense lawyer. Uh the New York Times has now reported that it may be worth $und00 million, but you know, just applying it to last year's earnings, the figure could jump significantly.
▶ 3:00:48$2.2 2 billion off earned while he served as president. more than 600 million from the memecoin that he launched days before his second inauguration and 500 million from token sales by world financial uh these are the very kind of novel transactions complex self-deing digital tokens licensing agreements that is serious IRS audit which is required by law but it largely ignored during the first four years of
▶ 3:01:18the Trump presidency that you need to scrutinize to see that this president is dealing with the American people correctly. No, we know he is a president who's boasted that he's smart by evading taxes. We know that the audit has not been completed in the past. It's time to assure that uh the indefensible does not occur.
▶ 3:01:41And I think the total failure today of Republican members to engage in debate to defend this deal shows that is it in fact totally indefensible. This amendment should be adopted quickly. I yield back.
▶ 3:01:54Gentleman yields back. Does the gentleman insist on his point of order?
▶ 3:02:02Does the sponsor of the amendment wish to be heard on the point of order?
▶ 3:02:05Mr. Speaker, uh I do, Mr. uh chairman, I do uh I understand the desire to avoid uh any uh evaluation of this president. the uh committee has a history of doing all it could to suppress access to any of his tax returns for a number of years during his first term of office.
▶ 3:02:26Uh I think this amendment is directly gerine to what's involved here that we're talking about nonprofits taxexempt entities and this president is seeking to be a taxexempt entity. uh this is an opportunity to uh simply have an audit continue of uh all of the money that he has avoided paying as any other taxpayer would have to do.
▶ 3:02:52Uh and so certainly I hope that the chair will not sustain a point of order that simply allows evading this committee's responsibility to hold the president accountable.
▶ 3:03:06Thank you to the gentleman. I am prepared to rule that the amendment is not gerine and the point of order is sustained. The amendment uh is not gerine to the underlying resolution and amendment is not germanine if it makes the effectiveness of a bill contingent upon an unrelated event or determination. The condition imposed by this amendment is unrelated to the subject matter of the underlying resolution which which is specific to taxexempt hospital reporting. Therefore, the amendment is not germanine and the
▶ 3:03:37Mr. Chairman, uh because it is such an important matter to the confidence of our tax system, I would appeal the ruling of the chair.
▶ 3:03:44The gentleman moves to appeal the ruling of the chair.
▶ 3:03:47Mr. Chairman, I move to table.
▶ 3:03:48There's a motion to table. Clerk, call the role.
▶ 3:03:56Mr. Buchanan.
▶ 3:03:59Yes. Yes. Mr. Smith in Nebraska.
▶ 3:04:07Mr. Smith in Nebraska. Yes. Mr. Kelly. Mr. Kelly. Yes. Mr. Schwiker. Mr. Le Hood. Mr. Arrington. Mr. Estus. Mr. Estus. Yes. Mr. Smucker.
▶ 3:04:34Mr. Smucker. Yes. Mr. Hearn. Mrs. Miller. Mrs. Miller. Yes. Dr.
▶ 3:04:47Dr. Murphy. Yes. Mr. Kustoff. Mr. Fitzpatrick. Mr. Stwie. Mr. Stwie. Yes. Miss Tenny. Miss Tenny.
▶ 3:05:07Yes. Mrs. Fishbach.
▶ 3:05:10Mrs. Fishbach. Yes. Mr. Moore.
▶ 3:05:23Oh. Say yes. Yes. Yes.
▶ 3:05:24Mr. Moore. Yes. Miss Vanine. Miss Vanine, yes. Mr. Fenstra,
▶ 3:05:32Mr. Fenstra,
▶ 3:05:33yes. Miss Maliaakis,
▶ 3:05:35Miss Malotakus, yes. Mr. Kerry,
▶ 3:05:39Mr. Kerry, yes. Mr. Yakam,
▶ 3:05:43Mr. Yakam, yes. Mr. Miller,
▶ 3:05:46Mr. Miller, yes. Mr. Bean,
▶ 3:05:49Mr. Bean, yes. Mr. Moran,
▶ 3:05:53Mr. Moran. Yes,
▶ 3:05:55Mr. Neil.
▶ 3:05:56Mr. Neil, No Mr. Dogget
▶ 3:06:00Mr. Dogget. No Mr. Thompson
▶ 3:06:05Mr. Thompson. No Mr. Larson
▶ 3:06:08Mr. Larson. No Mr. Davis
▶ 3:06:12Mr. Davis. No Miss Sanchez
▶ 3:06:15Miss Sanchez. No Miss Su
▶ 3:06:19Miss Su. No Miss Albenn. No, Miss Chu.
▶ 3:06:27Miss Chu. No, Miss Moore.
▶ 3:06:30Miss Moore. No, Mr. Boille.
▶ 3:06:34Mr. Boille. No,
▶ 3:06:36Mr. Byer.
▶ 3:06:37Mr. Byer. No, Mr. Evans.
▶ 3:06:41Mr. Evans? No. Mr. Schneider?
▶ 3:06:45Mr. Schneider? No. Mr. Petta? No.
▶ 3:06:48Mr. Petta? No. Mr. Gomez? Mr. Horford, Miss Plask, Mr. Swisy, Mr. Schwikert, Mr. Schwikert. Mr. Le Hood, Mr. Arrington,
▶ 3:07:18Mr. Hearn Mr. Kustoff Mr. Kustoff. Yes, Mr. Fitzpatrick. Mr. Gomez, Mr. Mr.
▶ 3:07:44Horsford, Miss Plask, Mr. Swazy, Chairman Smith. Chairman Smith. Yes.
▶ 3:08:20Clerk will record.
▶ 3:08:22Mr. Chairman, the yeses are 22 and the nos are 15. There being 22 yeses and 15 nos, the motion is tabled. Are there additional amendments?
▶ 3:08:36Mr. Thompson.
▶ 3:08:38Thank you, Mr. Chairman. I have an amendment at the desk.
▶ 3:08:41There's an amendment at the desk and there is a a point of order has been reserved. Gentlemen will suspend while the amendment is distributed. What do they have for dinner?
▶ 3:09:27truncating my stuff. Consider that those are trying to fly Maybe it's cool in California.
▶ 3:09:44Texas weather. to this climate crisis. Have you been down? What a mess.
▶ 3:10:11You ready?
▶ 3:10:16Mr. Thompson's recognized for 5 minutes.
▶ 3:10:18Thank you, Mr. Chairman. Uh, my amendment requires that uh this legisa this legislation not take effect until the American taxpayers are reimbursed for any taxpayer funds spent on the construction of the White House ballroom. Mr. Chairman, the American people are already facing an affordability crisis.
▶ 3:10:42Families are struggling to pay for groceries, struggling to fill up their gas tanks, struggling to afford housing, and to keep up with the cost of health care. At the same time, the federal government is spending hundreds of millions of dollars on a lavish ballroom at the White House. We were told that this project would be privately funded.
▶ 3:11:04Yet, public reporting indicates that at least $300 million in taxpayer funds have been already spent on this project. Mr. Chairman, I asked unanimous consent to enter into the record a Washington Post article detailing the use of taxpayer dollars for this project.
▶ 3:11:26Without objection, so
▶ 3:11:27Thank you, Mr. Chairman. Those taxpayer dollars should be helping lower cost for American families, not subsidizing an unnecessary, lavish ballroom. If this ballroom is truly being financed by private donations, then there should be no objection to reimbursing taxpayers and providing full transparency about who those donors are. Mr.
▶ 3:11:53Chairman, I urge my colleagues to support this amendment and I yield back.
▶ 3:11:58Gentleman yields back. Mr. Buchanan is
▶ 3:12:03I make I make a point of order to against the amendment. The amendment is not germanine to the underlying underlying resolution an effective non-gerain if it's made effectively uh of a bill contingent upon the unrelated events or determination. The condition imposed by this amendment is unrelated to this subject matter of underlying resolution which is specific to the tax exempt hospital reporting.
▶ 3:12:29Therefore, amendment is not germanine and I urge the chair to sustain the point of order.
▶ 3:12:34Does the sponsor of the amendment wish to be heard on the point of order?
▶ 3:12:39The gentleman is shocked.
▶ 3:12:44For the record.
▶ 3:12:45For the record. That's right. I am prepared to rule the amendment is not germaine and the point of order is sustained. The amendment is not in
▶ 3:12:57Are there additional amendments?
▶ 3:12:59Mr. Chairman, I have an amendment at the
▶ 3:13:03Mr. Chairman, I reserve a point of
▶ 3:13:05Point of order has been reserved. Mr. Doug, if you'll suspend while the amendment is being distributed. Take a little longer. Get in at five.
▶ 3:13:44gentleman may proceed.
▶ 3:13:46Thank you, Mr. Chairman. Uh the Republican disastrous cuts to Medicaid are estimated to result in the closing or reduction in service of 446 hospitals across the country. Uh they now offer a bill that once again targets the facilities in America that do the most to serve uh lowerincome Americans. Uh Republicans seem obsessed with taxexempt organizations except of course for the Trump organization.
▶ 3:14:17As to nonprofits, they've assailed organizations defending access to the ballot box, combating injustice, protecting our planet, and their latest target, facilities delivering health care to vulnerable families. Meanwhile, Republicans ignore for-profit facilities and the private equity firms that are quickly gobbling up hospitals, physician practices, nursing homes where they've been devastating, and more.
▶ 3:14:44We need more transparency in healthcare, but this bill's oversight of the role of private equity is a missed opportunity. My amendment is simple. It simply ensures a more complete picture by requiring transparency into where our care dollars are going in private equity owned facilities. These uh facilities uh have more than doubled in the last five years.
▶ 3:15:07By 2024, private equity investments had ballooned to $104 billion in a single year with nearly a third of for-profit hospitals owned by private equity. The result has been more debt, bankruptcies, closures, staff layoffs, and less quality care at a greater price.
▶ 3:15:27In 2023, more than 20% of healthc care bankruptcies were owned by private equity as short-term investments and nearly 90% of health entities at high risk of default have been bought by private equity. This puts consumers at immense risk in communities that lose access to what is perhaps their only hospital or healthc care facility.
▶ 3:15:50Private equity is fueling consolidation with a single firm owning half of physicians in uh 13% of metropolitan areas. This consolidation and misaligned incentives of private equity owners that are not focused on delivering quality health care is causing higher prices and declining quality. One review of these pee-owned facilities found increased consumer cost in nine out of 10 cases and no decreases anywhere.
▶ 3:16:20Another study found that hospital prices increased by almost a third after private equity investment. Meanwhile, other studies have found private equityowned hospitals and nursing homes have fewer staff, increased infections, and patient falls, and higher mortality rates compared to their nonPE counterparts. In one of the most egregious examples, a private equity firm, Leonard Green, purchased Prospect Medical, a five hospital system in Southern California.
▶ 3:16:51That deal was primarily financed by debt. Through more debt financed expansion, Prospect grew to 16 hospitals in five states, including my home state of Texas. Quality of care deteriorated, services were reduced, facilities closed as some communities lost their only hospital. Last year, Prospect filed for bankruptcy with $2.3 billion in debt.
▶ 3:17:16But the investors received over half a billion dollars in dividends and stock redemptions. It's just not right. It's not fair. And it deprivives many communities of the health care they so desperately need. It's time to lift the hood on private equity.
▶ 3:17:33My amendment would simply require the secretary to promulgate regulations concerning PE ownership of health facilities, including information regarding debt payments, owned or lease property addresses, amounts paid for debt secured by real estate, and rental payments. I urge its adoption and yield back.
▶ 3:17:52Gentleman yields back. Mr. Hearn is recognized to strike the last word.
▶ 3:17:55Thank you, Mr. Chairman. Um my Democratic colleagues are very concerned about private equity and um has been widely reported year over year over year over year that tax exempt hospitals actually spend less on charity than for-profit hospitals. In fact, the majority of nonprofit hospitals receive more taxpayer subsidies than they return in community benefits according to the nonpartisan loan institute.
▶ 3:18:21And out of respect for my colleagues across the aisle, I won't mention this particular hospital by name, but um one significantly sized hospital uh had a tax exempt estimated to be worth tax exemption estimated to be worth more than $400 million annually. Yet it is invested a mere 90 million in his community, resulting in what the loan institute called a quote fair share deficit end quote of more than $325 million each year.
▶ 3:18:47My Democratic colleagues may have concerns about private equity, and I know many of my Republicans do as well, but nonprofit hospitals have escaped serious transparency for way too long, and I urge my colleagues to support this bill. I yield back.
▶ 3:19:01Thank you. Do others wish to strike the last word. Mr. Thompson, Mr.
▶ 3:19:06Chairman, I move to strike the last word and yield my time to Mr. Dog.
▶ 3:19:11Gentleman is recognized.
▶ 3:19:13Well, I want to acknowledge Mr. turn uh for his defense of private equity. Uh there's no doubt that there are some circumstances where private equity plays a private a positive role, but it has not played a particularly positive role in the healthc care area. And as I mentioned, the result has been higher cost, lower quality care, loss of hospitals that a community is relying on, and devastation for many nursing homes.
▶ 3:19:40But there's something also noteworthy about his presentation today. Uh, Republicans, every Republican on this committee has remained 100% silent about the whole concept of the taxexempt presidency, about the corrupt audit deal that was negotiated between Trump and himself and his criminal defense lawyer. This is wrong. It undermines confidence in our entire tax system.
▶ 3:20:07When the commanderin-chief can avoid any audit, any responsibility, and claim to be smart by evading taxes, he may well have been granted an exemption on the $2.2 billion that he allegedly earned this past year.
▶ 3:20:24We don't know if he'll pay a dime of taxes on any or all of those earnings, making them all the more uh an indication of the corruption that sound that that surrounds it administration where regardless of the country or the interest around the world, we find the Trump organization with a hand in the till. The public uh cannot have confidence in a corrupt administration of this type.
▶ 3:20:51Uh, I urge adoption of this amendment about private equity, but I think it is noteworthy the committee's unwillingness to debate the merits of the corruption surrounding this administration and particularly its evasion of taxes. I yield back.
▶ 3:21:09Gentlemen, Gentleman yields back. Others wishing to strike the last word. Seeing none, clerk call the role.
▶ 3:21:18Mr. Buchanan. Mr. Smith of Nebraska.
▶ 3:21:26Mr. Smith of Nebraska. No.
▶ 3:21:29Mr. Kelly,
▶ 3:21:31Mr. Kelly, no. Mr. Schwiker. Mr. Schwikert. No. Mr. Le Hood. Mr. Arrington. Mr. Essis. Mr. Ess. No, Mr. Smucker Mr. Hearn Mr. Hearn. No
▶ 3:21:59Mrs. Miller.
▶ 3:22:01Mrs. Miller, no. Dr. Murphy. Dr. Murphy. No. Mr. Kustoff.
▶ 3:22:10Mr. Kustoff. No. Mr. Fitzpatrick.
▶ 3:22:17Mr. Stwie.
▶ 3:22:19Mr. Stwie. No Miss Tenny. Miss Tenny. No. Miss Fishbach. Miss. Fishbach. No. Mr. Moore. Mr. Moore. No. Miss. Van. Miss. Van. No. Mr. Fenstra. Mr. Fenstra. No. Miss. Malotakus. Miss. Maliaakis. No. Mr. Carrie. Mr. Carrie. No Mr. Yakam.
▶ 3:22:49Mr. Yakam. No
▶ 3:22:52Mr. Miller.
▶ 3:22:54Mr. Miller. No Mr. Bean.
▶ 3:22:57Mr. Bean. No Mr. Moran.
▶ 3:23:01Mr. Moran. No. Mr. Neil. Mr. Neil. Yes. Mr. Dog.
▶ 3:23:08Mr. Dog. Yes. Mr. Thompson.
▶ 3:23:12Mr. Thompson. Yes. Mr. Larson.
▶ 3:23:14Mr. Larson. Yes. Mr. Davis.
▶ 3:23:32Miss Sanchez.
▶ 3:23:34Miss Sanchez. Yes. Miss Su.
▶ 3:23:40Miss Su. Yes. Mr. Alen.
▶ 3:23:42Mr. Alen. Yes. Miss Chu. M two. Yes. Miss Moore.
▶ 3:23:49Miss Moore. Yes. Mr. Boille.
▶ 3:23:52Mr. Bole. Yes. Mr. Byer.
▶ 3:23:54Mr. Byer. Yes. Mr. Evans.
▶ 3:23:58Mr. Evans. Yes. Mr. Schneider.
▶ 3:24:01Mr. Schneider. Yes. Mr. Petta. Mr. Petta. Yes. Mr. Gomez. Mr. Horseford. Miss Plask Mr. Swisy Mr. Buchanan Mr. Buchanan No Mr. Le Hood Mr.
▶ 3:24:28Arrington Mr. Smucker
▶ 3:24:34Mr. Smucker no Mr. Fitzpatrick
▶ 3:24:39Mr. Fitzpatrick no Mr. Mr. Davis.
▶ 3:24:45Mr. Davis. Yes. Mr. Gomez.
▶ 3:24:52Mr. Horseford. Miss Plask. Mr. Swazy. Chairman Smith. Chairman Smith. No.
▶ 3:25:22clerk record.
▶ 3:25:24Mr. Chairman, the yeses are 15 and the nos are 24.
▶ 3:25:28The yeses being 15 and the nos being 24, the amendment is not adopted. Are there additional amendments? 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.
▶ 3:25:47Those opposed, nay. No.
▶ 3:25:49The opinion of the chair, 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.
▶ 3:25:57Mr. Chairman, I move the committee favorably report HR 9504 as amended to the House of Representatives. The question is on the motion to favorably report HR 9504 as amended to the House of Representatives. Clerk, call the role. Mr. Buchanan,
▶ 3:26:13Mr. Buchanan,
▶ 3:26:16Mr. Smith in Nebraska,
▶ 3:26:18Mr. Smith in Nebraska, yes. Mr. Kelly,
▶ 3:26:21Mr. Kelly, yes. Mr. Schwikert.
▶ 3:26:25Mr. Schwikert. Yes. Mr. Le Hood. Mr. Arrington. Mr. Estus Mr. Estus. Yes. Mr. Smucker.
▶ 3:26:42Mr. Smucker. Yes. Mr. Hearn
▶ 3:26:46Mr. Hearn. Yes. Mrs. Miller.
▶ 3:26:50Mrs. Miller. Yes. Dr. Murphy.
▶ 3:26:53Dr. Murphy. Yes. Mr. Kustoff. Mr. Kustoff. Yes. Mr. Fitzpatrick. Mr. Mr. Fitzpatrick. Yes, Mr. Stwie.
▶ 3:27:04Mr. Stwie. Yes, Miss Tenny, Miss Tenny. Yes, Mrs. Fishbach.
▶ 3:27:11Mrs. Fishbach. Yes, Mr. Moore. Mr. Moore. Yes, Miss Vanine. Miss Vanine. Yes. Mr. Fenstra. Mr. Fenstra. Yes. Miss Malotakus. Miss Malotakus. Yes. Mr. Carrie. Mr. Kerry. Yes. Mr. Mr. Yakam.
▶ 3:27:32Mr. Yakam.
▶ 3:27:34Yes. Mr. Miller.
▶ 3:27:36Mr. Miller.
▶ 3:27:37Yes. Mr. Bean.
▶ 3:27:40Mr. Bean. Yes. Mr. Moran.
▶ 3:27:43Mr. Moran. Yes.
▶ 3:27:45Mr. Neil. Mr. Neil. No. Mr. Dogget.
▶ 3:27:51Mr. Dogget. No. Mr. Thompson. Mr. Thompson. No. Mr. Larson.
▶ 3:27:58Mr. Larson. No. Mr. Davis. Mr. Davis. No. Miss Sanchez. Miss Sanchez. No. Miss Su. Miss Su. No. Miss Delen.
▶ 3:28:13Mr. Delben. No. Miss Chu.
▶ 3:28:16Miss Chu. No. Miss Moore.
▶ 3:28:20M. Moore. No.
▶ 3:28:22Mr. Bole.
▶ 3:28:24Mr. Bole. No.
▶ 3:28:26Mr. Byer.
▶ 3:28:28Mr. buyer. No. Mr. Evans. Mr. Schneider. Mr. Schneider. No. Mr. Petta. Mr. Petta. No. Mr. Gomez. Mr. Horseford. Miss. Plask. Mr.
▶ 3:28:56Swazy Mr. Le Hood Mr. Arrington
▶ 3:29:13Mr. Arrington. Yes,
▶ 3:29:20Mr. Evans. Mr. Mr. Evans. No. Mr. Gomez. Mr. Horseford. Miss Plask. Mr. Swazy.
▶ 3:29:45Chairman Smith.
▶ 3:29:46Chairman Smith. Yes. clerk uh the
▶ 3:30:17clerk report the vote?
▶ 3:30:18Mr. Chairman, the yeses are 25 and the nos are 15. There being 25 yeses and 15 nos, the motion is agreed to and HR 9504 as amended is ordered favorably reported to the House. Without objection, I ask that staff be authorized to make technical and conforming changes to HR 9504 and that members have two additional days to file with the committee clerk supplemental additional dissenting or minority views.
▶ 3:30:44Our next order of business is HR9499, the Protecting Taxpayers from Ghost Preparers Act, introduced by Representative Mallet Takis. Representative Malotakus has spent years combating fraud and protecting taxpayers, having seen individuals and families in her own district become victims of these same crimes. Last year, she fought to ensure that taxpayers who refund checks are lost or stolen can get the money that they are owed without additional hurdles.
▶ 3:31:14I appreciate her continued leadership on this front and urge my colleagues to support this legislation. I'm pleased to recognize the gentle lady from New York, Miss Mallet Takis, for an opening statement.
▶ 3:31:24Thank you, Mr. Chairman. I'm pleased that my legislation HR9499, the Protecting Taxpayers from Ghost Preparers Act, is before the committee today. This legislation takes an important step in ensuring that taxpayers who are victims of preparer fraud are not unfairly punished for actions they did not commit.
▶ 3:31:43Unfortunately, over the past several years, we have seen too many cases of dishonest tax preparers exploiting hardworking Americans, senior citizens, and other vulnerable taxpayers who are simply just trying to pay their taxes. In Kentucky this past April, two individuals pleaded guilty to operating a major tax preparation fraud scheme.
▶ 3:32:06Between 2018 and 2021, they prepared nearly 6,000 fraudulent federal tax returns, causing more than $10 million in tax losses to the IRS while collecting more than $700,000 in fees from their unsuspecting clients. In my own state of New York, an individual in Long Island pleaded guilty to nearly $12 million tax fraud scheme.
▶ 3:32:30They prepared fraudulent tax returns, charged clients more than 1 million in fees, including a percentage of their refunds, and they put innocent taxpayers at risk while enriching themselves. And in 2025, an individual in the Bronx was sentenced to four years in prison for orchestrating a decadel long 145 million tax fraud scheme.
▶ 3:32:54He oversaw the filing of tens of thousands of false tax returns generating approximately $12 million in fraudulent proceeds. These are not isolated is incidents. Across the country, ghost preparers continue to file fraudulent returns and skim money from taxpayers refunds, leaving the taxpayer on the hook to deal with the consequences.
▶ 3:33:18Under current law, when a ghost preparer commits fraud without taxpayers's knowledge, it can leave an innocent taxpayer subject to an indefinite statute of limitations, even though the taxpayer had no intent to invade their tax obligations. My bill addresses this gap in the law by clarifying that the unlimited statute of limitations for fraudulent tax returns applies only when the taxpayer intended to commit fraud, not when a dishonest tax prepareer acted alone without the taxpayers's knowledge.
▶ 3:33:48It's a simple, easy, common sense bill that protects taxpayers who have been victimized by fraud. And I also want to say that this is just a small piece of the puzzle. We have a lot more work to do and I know my colleagues, Representative Stubie and Panetta have been working also very diligently on this issue and I know, Mr.
▶ 3:34:07Chairman, that after we pass this bill today, which I hope will pass with unanimous bipartisan support, I think that we're going to be able to do a lot more uh all together in a bipartisan manner to address this issue and go after these fraudsters and make sure that they're being held accountable. Thank you and I yield back.
▶ 3:34:26Thank you. I now recognize Mr. Panetta from California for his opening
▶ 3:34:30Oh, thank you, Mr. Chairman. I appreciate that and thanks to Miss Maliotakus and the committee's attention uh to the issue of ghost preparers as I have long advocated for action on this topic. I also want to thank Chairman Smith. Uh thank you for the steps taken today to address the concerns raised by myself and Mr. Stwie about previous provisions that were in the bill prior to the amendment.
▶ 3:34:53Now, this current legislation uh by Miss Malotakus advances an important provision to ensure that when tax preparers commit fraud, unwitting taxpayers are not targeted by the IRS decades after the case. Currently, there is no statute of limitations on tax assessments for taxpayers whose preparers file a false or fraudulent return with the intent to evade taxes.
▶ 3:35:18That means that decades later, taxpayers can be subject to IRS enforcement action even though they had no idea that their preparer filed fraudulently. They do not benefit from the three-year statute of limitations for mistakes and returns filed without intent to evade tax. Now, this bill also takes the important step of shifting the responsibility from the taxpayer to the preparer being paid to file returns.
▶ 3:35:45We still need to pass legislation to establish basic professional standards for tax preparers and ensure that the IRS can enforce those standards. I do hope to work with the committee on those issues in the future. However, this bill is a very positive step forward. I appreciate Miss Malitakius for this and I and I support this bill.
▶ 3:36:06That is why I urge my colleagues to vote yes to ensure that innocent taxpayers are not indefinitely exposed to IRS enforcement actions when the wrongdoing was committed by a third party preparer without the taxpayers's knowledge. And with that, Mr. Chairman, I thank you and I yield back. Thank you. The committee will now proceed to consideration of HR 9499, the Protecting Taxpayers from Ghost Preparers Act. Without objection, the measure will be considered as read and open for amendment at any point.
▶ 3:36:35At 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 the 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 and 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.
▶ 3:37:02Mr. Chairman, the members of the committee have before them two joint committee documents, JCX 24 and JCX 31, which describe HR 9499 and your amendment in the nature of a substitute. The amendment, the nature of substitute makes uh clerical correction to the underlying legislation. Uh and it really consists of three components.
▶ 3:37:24In section two, the provision ensures that preparer penalties apply to both valid filings made by taxpayers and to documents submitted that do not meet the criteria to be treated as a valid return.
▶ 3:37:39This provision would be effective upon the date of enactment and the staff of the joint committee on taxation has estimated that this provision would raise approximately $5 million over the budget period of fiscal 2027 through fiscal uh 2036.
▶ 3:37:56The next component of the legislation resolves a discordant resolves discordant judicial rulings by restricting the authority of the Internal Revenue Service to extend the period of limitations with respect to fraud to those cases in which the taxpayer is alleged to be the person committing the fraud.
▶ 3:38:19This provision would be effective for assessments and proceedings uh initiated after the date of enactment and this would result uh in an estimated revenue loss of approximately $2 million over the 2027 to 2036 fiscal year budget period. Lastly, uh the legislation makes a technical correction to the disaster related extension of deadlines act.
▶ 3:38:44It would this technical correction as with uh all technical corrections generally passed out of this committee would be effective retroactive to the date of uh enactment of that act. Uh that concludes my brief description of this legislation. I'd be happy to answer questions that the members might have.
▶ 3:39:03Thank you. Are there any technical questions about the amendment and the nature of a substitute?
▶ 3:39:08Seeing none, we will move to strike the last word. Does any member wish to strike the last word? Seeing none, we will move to amendments. And I recognize myself for an amendment.
▶ 3:39:22When a report
▶ 3:39:25Thank you. Thank you. Thank you, Mr. Thompson. Um, when a when a fraudulent return is filed with the intent to evade tax, the IRS can access tax at any time, even beyond the three-year statute of limitations. Unfortunately for honest taxpayers, that intent is currently not tied to their actions. Fraudsters and ghost preparers can intentionally file fraudulent returns on behalf of the taxpayer without their knowledge.
▶ 3:39:53In doing so, they leave that honest taxpayer on the hook when the IRS comes to access, even if it if it's decades later. This bill corrects that issue, requiring that the limitation on the statute of limitation only applies to cases where the taxpayer themselves fight a filed a fraudulent return with intent to evade tax and and pulls honest taxpayers out of the equation.
▶ 3:40:17Section two of this legislation was added to the bill to expand the definitions of tax returns to be identical to language in the Senate TAZ Act that would ensure as many ghost preparers are captured by this bill. um with still ongoing items that's resolved.
▶ 3:40:37Um both sides are insisting on including additional provisions um regarding paid prepares that were not intended to be part of Miss Tal Malotakus' bill. In an effort to ensure we continue moving these tax administration bills in a bipartisan fashion, I'm offering this amendment to strike section two.
▶ 3:40:58Um, Representative Mali Takis has spent years combating fraud and protecting taxpayers, having seen individuals and and families in her own district become victims of these same crimes. Last year, she fought to ensure that taxpayers who refund checks are lost or stolen can get the money that they are ow owed without additional hurdles. I appreciate her continued bipartisan leadership on this front and urge my colleagues to support this amendment. Any member wish to strike the last word on the amendment?
▶ 3:41:30See, point of order.
▶ 3:41:33Do you have a point of order?
▶ 3:41:34I just wanted you to know that I still loved you, Mr.
▶ 3:41:36I love you, too, Mr. Thompson. Thank you. I want to make sure you get your flight. So, um um will the clerk call the role?
▶ 3:41:51Mr. Buchanan.
▶ 3:41:53Mr. Mr. Buchanan. Yes. Mr. Smith of Nebraska. Mr. Kelly.
▶ 3:42:03Mr. Kelly. Yes. Mr. Schwiker. Mr. Schwikert. Yes. Mr. Le Hood. Mr. Arrington. Mr. Estus. Mr. Estus. Yes. Mr. Smucker. Mr. Smucker. Yes. Mr. Hearn
▶ 3:42:25Mr. Hearn. Yes. Mrs. Miller.
▶ 3:42:28Mrs. Miller. Yes. Dr. Murphy.
▶ 3:42:35Mr. Kustoff.
▶ 3:42:36Mr. Kustoff.
▶ 3:42:38Yes. Mr. Fitzpatrick.
▶ 3:42:41Mr. Fitzpatrick. Yes. Mr. Stwie.
▶ 3:42:44Mr. Stwie. Yes. Miss. Tenny.
▶ 3:42:47Miss. Tenny. Yes. Mrs. Fishbach.
▶ 3:42:50Mrs. Fishbach. Yes, Mr. Moore. Mr. Moore. Yes, Miss Vanine. Miss Vanine. Yes, Mr. Fenstra. Mr. Fenstra. Yes, Miss Malotakus. Miss Malotakus. Yes, Mr. Kerry. Mr. Kerry. Yes, Mr.
▶ 3:43:10Mr. Yakam. Yes. Mr. Miller. Mr. Bean.
▶ 3:43:19Mr. Bean. Yes. Mr. Mr. Moran.
▶ 3:43:22Mr. Moran. Yes.
▶ 3:43:25Mr. Neil.
▶ 3:43:30Mr. Dogget.
▶ 3:43:33Mr. Dogit. Yes. Mr. Thompson.
▶ 3:43:37Mr. Thompson. Yes. Mr. Larson. Mr. Davis. Mr. Davis. Yes. Miss Sanchez. Miss Sanchez. Yes. Miss Sul Su Yes. Miss Delen,
▶ 3:43:57Miss Delben, yes. Miss Chu,
▶ 3:44:00Miss Chu, yes. Miss Moore,
▶ 3:44:03Miss Moore, yes. Mr. Boille,
▶ 3:44:05Mr. Boille, yes. Mr. Byer,
▶ 3:44:08Mr. Byer. Yes. Mr. Evans.
▶ 3:44:11Mr. Evans. Yes. Mr. Schneider.
▶ 3:44:14Mr. Schneider. Yes. Mr. Petta. Mr. Petta. Yes. Mr. Mr. Gomez, Mr. Horsford, Miss Plask, Mr. Swazy, Mr. Smith of Nebraska.
▶ 3:44:36Mr. Smith of Nebraska. Yes, Mr. Le Hood.
▶ 3:44:41Mr. Arrington, Dr. Murphy. Mr. Murphy.
▶ 3:44:53Dr. Murphy.
▶ 3:44:57Mr. Miller.
▶ 3:45:06Mr. Neil.
▶ 3:45:08Mr. Neil. Yes. Mr. Larson.
▶ 3:45:17Mr. Gomez. Mr. Horford, Miss Plask, Mr. Swazy.
▶ 3:45:30Chairman Smith,
▶ 3:45:31Chairman Smith, yes. The clerk will report the vote.
▶ 3:45:58Mr. Chairman, the yeses are 37 and the nos are zero.
▶ 3:46:01There being 37 yeses and zero nos, the amendment is adopted. Are there additional amendments to the amendment in the nature of a substitute? Seeing none, 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
▶ 3:46:26Mr. Chairman, I move the committee favorably report HR 9499 as amended to the House of Representatives.
▶ 3:46:34The question is on the motion to favorably report HR 9499 as amended to the House of Representatives. The clerk will call the role.
▶ 3:46:41Mr. Buchanan,
▶ 3:46:42Mr. Bckinan, yes. Mr. Mr. Smith in Nebraska. Mr. Smith in Nebraska. Yes. Mr. Kelly. Mr. Kelly. Yes. Mr. Schwiker. Mr. Schwikert. Yes. Mr. Leood. Mr. Arrington. Mr. Estus. Mr. Estus. Yes. Mr. Smucker. Mr. Smucker. Yes. Mr. Hearn.
▶ 3:47:12Mr. Hearn. Yes, Mrs. Miller. Mrs. Miller. Yes, Dr.
▶ 3:47:19Dr. Murphy. Yes, Mr. Kustoff. Mr. Kustoff. Yes, Mr. Fitzpatrick. Mr. Fitzpatrick. Yes, Mr. Stwie. Mr. Stwie. Yes, M. Tenny. Miss. Tenny. Yes. Mrs. Fishbach. Mrs. Fishbach. Yes. Mr. Moore. Mr. Moore. Yes. Miss. Van. Miss. Van. Yes. Mr. Fenstra. Mr. Fenstra. Yes. Miss Mayotakis. Miss Mayotakis. Yes.
▶ 3:47:49Mr.
▶ 3:47:51Mr. Kerry. Yes. Mr. Yakam.
▶ 3:47:54Mr. Yakam. Yes. Mr. Miller.
▶ 3:47:58Mr. Miller. Yes. Mr. Bean.
▶ 3:48:01Mr. Bean. Yes. Mr. Moran. Mr. Moran. Yes. Mr. Neil. Mr. Neil. Yes. Mr. Dogget. Mr. Thompson.
▶ 3:48:17Mr. Thompson. Yes. Mr. Larson.
▶ 3:48:21Mr. Larson. Yes. Mr. Davis.
▶ 3:48:24Mr. Davis. Yes. Miss Sanchez.
▶ 3:48:28Miss Sanchez. Yes. Miss Su.
▶ 3:48:33Miss Su. Yes. Mr. Delen. Miss Delen. Yes. Miss Chu. Miss Chu. Yes. Miss Moore. Miss Moore, yes. Mr. Boille,
▶ 3:48:44Mr. Boille, yes. Mr. Byer,
▶ 3:48:47Mr. Byer, yes. Mr. Evans,
▶ 3:48:51Mr. Evans, yes. Mr. Schneider,
▶ 3:48:54Mr. Schneider, yes. Mr. Petta,
▶ 3:48:58Mr. Petta, yes. Mr. Gomez, Mr. Horford, Miss Plask, Mr. Swazy Mr. Le Hood Mr. Arrington
▶ 3:49:18Mr. Arrington yes
▶ 3:49:22Mr. Dogget
▶ 3:49:24Mr. Dogget yes Mr. Gomez Mr. Horsford Miss Plask Mr. Swazy.
▶ 3:49:34Chairman Smith.
▶ 3:49:36Chairman Smith. Yes.
▶ 3:49:50The clerk will report the vote.
▶ 3:49:52Mr. Chairman, the yeses are 40 and the nos are zero. There being 40 yeses and zero nos, the motion is agreed to and HR 9499 as amended is ordered favorably reported to the House. Without objection, I ask that staff be authorized to make technical and conforming changes to HR 9499 and that members have two additional days to file with the committee clerk supplemental additional dissenting or minority views.
▶ 3:50:16Our next order of business is HR 9498, the Taxpayer Advocate Participation Act, introduced by Representative Stwie and Delben. With this legislation, Representative Stwie is building on his record as a tireless advocate for American taxpayers. This important reform to current law follows on the heels of previous efforts he has made, including the Taxpayer Notification and Privacy Act, which the House approved last year with unanimous consent.
▶ 3:50:46Legislation that not surprisingly reflects recommendations of the NA National Taxpayer Advocate. I applaud Representative Stuby's continued leadership on this front and urge my colleagues to support this legislation. I'm pleased to recognize the gentleman from Florida, Mr. Stwie for his opening
▶ 3:51:04Thank you, Mr. Chairman, and thank you for the opportunity for me to speak today in support of HR 9498, the Taxpayer Advocate Participation Act, or TAPA. When a federal court is deciding a case that may affect the rights of many or all taxpayers, it would benefit all for the National Taxpayer Advocate to submit an amicus brief to share her views as the voice of the taxpayer. However, under current law, the NTA is not authorized to submit amicus briefs in a federal tax litigation. This bill is a narrow common sense fix.
▶ 3:51:33It would allow the national taxpayer advocate to appear as amicus cure in federal tax cases, but only to present views on issues that may broadly affect the rights of taxpayers. This authority is expected to be used sparingly, similar to the authority exercised by the Small Business Administration's Chief Council for Advocacy. The Office of the Taxpayer Advocate already plays an important role in helping taxpayers resolve problems with the IRS, identifying systematic issues in tax administration and making recommendations to Congress.
▶ 3:52:02The National Taxpayer Advocate is also required to report annually to Congress on the most litigated tax issues and ways to mitigate those disputes. It makes sense that in appropriate cases, the advocate should be able to share the taxpayer focused expertise with federal courts. I'm thankful that the committee is facilitating bipartisan legislation aimed at protecting taxpayer rights and ensuring that courts can hear from an independent office whose mission is to identify and protect taxpayers from systematic problems in tax administration.
▶ 3:52:31I'm also thankful that this bill has been endorsed by a number of organizations including the National Taxpayer Union, the Small Business and Entrepreneurship Council in it 60 plus association and the National Association of Consumer Advocates. This is a bipartisan effort and I'm honored to work with Representative Dell Benning because protecting taxpayers and improving their right to representation should not be a partisan issue. I urge my colleagues to support HR 9498, the Taxpayer Advocate Participation Act, and I yield back.
▶ 3:53:00I now recognize the ranking member.
▶ 3:53:03Thank you, Mr. Chairman. Let me yield my time to the gentle lady from Washington State, Miss Delenny.
▶ 3:53:08Thank you, Mr. Chairman, um, and to the ranking member. And thank you to my colleague, Mr. Dubie, who's been a great partner on this bill. The Taxpayer Advocate Participation Act would ensure that the National Taxpayer Advocate is able to advocate on behalf of taxpayers when a court decision may affect their fundamental rights.
▶ 3:53:28The National Taxpayer Advocate is often referred to as the voice of the taxpayer because they assist taxpayers in resolving problems with the IRS, identifying systemic issues, and making legislative recommendations to Congress. based on their extensive experience. The Taxpayer Advocate Participation Act is a result of one of those recommendations.
▶ 3:53:50Under current law, the NTA is not authorized to submit amicus briefs and share her views, meaning that no one is representing the interests of taxpayers as a group in cases that could impact those rights. HR 9498 addresses this gap by authorizing the National Taxpayer Advocate to submit amicus briefs in federal tax litigation, ensuring that the voices of taxpayers are heard.
▶ 3:54:16This bill is a targeted common sense measure to ensure taxpayers voices are heard and reinforces fairness, transparency, and accountability in our tax system. Um, I urge my colleagues to support this legislation and I yield back.
▶ 3:54:31Thank you. The committee will now proceed to consideration of HR 9498, the Taxpayer Advocate Participation Act. 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. 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.
▶ 3:54:56I 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.
▶ 3:55:10Mr. Chairman, the members of the committee have uh before them two joint committee documents, JCX22 and JCX 29, which describe HR 9498 and your amendment in the nature of a substitute. your amendment, the nature of a substitute uh makes a modest clerical change in the underlying text. By way of background, under present law, uh it is generally the case that only officers of the Department of Justice may represent the United States in litigation.
▶ 3:55:41One such uh limited exemption is that the IRS chief counsel represents the Secretary of the Treasury in litigate litigation before the tax court. This legislation in the amendment nature of a substitute authorizes the national taxpayer advocate to appear as amicus curi uh in any action before a court of the United States related to federal tax law with respect to issues affecting the rights of taxpayers.
▶ 3:56:10Uh this legislation would be effective upon the date of enactment. uh our staff has estimated it would have a negligible effect on federal receipts over the uh budget period of fiscal years 2027 through 2036. Uh that concludes my brief uh description. I'd be happy to answer any questions that the members might
▶ 3:56:30Thank you. Are there any technical questions about the amendment and the nature of a substitute? Seeing none, does anyone wish to strike the last word? Seeing none, are there any amendments to the amendment in the nature of a That's wonderful. The the question is on the adoption of the amendment in the nature of a substitute. All those in favor signify by saying I. I.
▶ 3:56:59Those 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
▶ 3:57:09Mr. Chairman, I move the committee favor Mr. Chairman, I move the uh that the committee favorably report HR 9498 as amended to the House of Representatives.
▶ 3:57:22The question is on the mo the question is on the motion to favorably report HR 9498 as amended to the House of Representatives. The clerk will call the
▶ 3:57:31Mr. Buchanan,
▶ 3:57:33Mr. Buchanan, yes. Mr. Mr. Smith in Mr. Smith in Nebraska. Yes. Mr. Kelly. Mr. Kelly. Yes. Mr. Schwiker. Mr. Schwikert. Yes. Mr. Leood. Mr. Arrington. Mr. Estus.
▶ 3:57:57Mr. Estus. Yes. Mr. Smucker. Mr. Smucker. Yes. Mr. Hearn. Yes,
▶ 3:58:05Mr. Hearn.
▶ 3:58:07Yes, M. Mrs. Miller.
▶ 3:58:10Mrs. Miller. Yes, Dr. Murphy.
▶ 3:58:14Dr. Murphy.
▶ 3:58:15Yes, Mr. Kustoff. Mr. Kustoff. Yes, Mr. Fitzpatrick. Mr. Fitzpatrick. Yes. Mr. Stwie. Mr. Stwie. Yes. M. Tenny. Miss. Tenny. Yes. Mrs. Fishbach. Mrs. Fishbach. Yes. Mr. Moore. Mr. Moore. Yes. Miss Vanine.
▶ 3:58:41Miss Vanine. Yes.
▶ 3:58:44Mr. Fraure. Miss Motakus. Miss Malotakus. Yes. Mr. Kerry. Mr. Kerry. Yes. Mr. Yakam. Mr. Yakam. Yes. Mr. Miller,
▶ 3:59:04Mr. Miller, yes. Mr. Bean,
▶ 3:59:07Mr. Bean,
▶ 3:59:10Mr. Moran,
▶ 3:59:11Mr. Moran, yes. Mr. Neil,
▶ 3:59:15Mr. Neil, yes. Mr. Dogget.
▶ 3:59:19Mr. Dogget. Yes. Mr. Thompson.
▶ 3:59:22Mr. Thompson. Yes. Mr. Larson.
▶ 3:59:26Mr. Larson. Yes. Mr. Davis.
▶ 3:59:28Mr. Davis. Yes. Miss Sanchez. Hi. Miss Sanchez, yes. Miss Sul, Miss Su, yes. Mr. Alben, Mr. Albenet, yes. Miss Chu, Miss Chu, yes. Miss Moore. Miss Moore. Yes. Mr. Boille. Mr. Bole. Yes. Mr.
▶ 4:00:00The guilty don't run.
▶ 4:00:04Mr. Barer.
▶ 4:00:07We're done.
▶ 4:00:07Mr. Evans.
▶ 4:00:09Mr. Evans. Yes. Mr. Schneider.
▶ 4:00:12Mr. Schneider. Yes. Mr. Petta.
▶ 4:00:15Mr. Petta. Yes. Mr. Gomez. Mr. Horzford. Miss Blask. Mr. Swazy
▶ 4:00:29Mr. Le Hood Mr. Arrington
▶ 4:00:33Mr. Arrington yes Mr. Fenstra Mr. Gomez Mr. Horford Miss Plask Mr. Swazy.
▶ 4:00:53Chairman Smith.
▶ 4:00:55Chairman Smith. The clerk will report the vote.
▶ 4:01:15Mr. Chairman, the yeses are 39 and the nos are zero.
▶ 4:01:18There being 39 yeses and zero nos, the motion is agreed to an HR 9498 as amended as ordered favorably reported to the House. Without objection, I ask that staff be authorized to make technical and conforming changes to HR 9498 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 journal.