As we reported earlier, I had the opportunity to testify before the Senate Finance Committee on a panel gathered as a part of its ongoing effort to consider major tax reform. The panel on which I participated focused its attention on tax simplification. My role on the panel was to represent the interest of low income taxpayers.
I am writing this post just to talk about the experience of being a part of the panel and to put forward my view of simplification for low income taxpayers. I did not take a standard view of simplification but, perhaps because I blog on procedural matters, it will not surprise readers to learn that I focused on simplifying the process rather than the substance.
The process of joining the panel deserves first mention. On Thursday, February 26, at 5:50 PM I received a message from Ryan Abraham, Senior Tax and Energy Counsel, Democratic Staff, Senate Finance Committee, asking if I might be available to testify at a hearing on March 10. Ryan attended American University Law School, the home of a leading low income tax clinic headed by Nancy Abramowitz. Ryan had contacted Nancy and she could not attend the hearing on March 10 and suggested he reach out to me. I was available that day but by the time he contacted me I had already left Villanova for spring break. I was planning to spend spring break in Florida getting warm, watching baseball and bicycling.
When Ryan contacted me, he was unsure if the committee would want someone from the low income taxpayer community and had to coordinate with the Chair of the committee Senator Hatch. I said I was interested if they decided they wanted someone from the low income taxpayer community. I had never testified before Congress. In 1997 I spent a day in a Senate Finance investigation hearing with staffers as they looked at IRS abuses, or alleged abuses, in collecting taxes but had never been to or testified at a “real” hearing.
By the end of the day on February 27, Ryan reached back to me to let me know that they did want me to testify. At that point I did not have details on what was expected. At the end of the day on Monday, March 2, I heard back from Ryan letting me know my testimony would be limited to 5 minutes and I should make a written submission by close of business on Friday, March 6. At that point I began to focus in earnest on what I would write and say. I reached out to Les and other to help me focus my thoughts.
On Tuesday, March 3, at 3:00 PM I received the official invitation by email informing me that my written statement was due by Friday, March 6 at 10:00 AM EST. The pressure was mounting and I could see my time at the pool reading the novels I brought to Florida diminishing. I worked with my RA to finish a written paper and received great input from Les. I turned in the written testimony on Friday before the deadline; however, I have since noticed the typos I missed in my haste.
On Tuesday, March 10, I took an early train from Philadelphia to DC in order to be at the hearing well before the 10:00 start time. I had not taken time to watch the earlier hearings before the committee nor even to read about the others who would testify with me. I also failed to ask about the order of testimony among the four of us. The Senate invited a diverse group to testify on simplification. I enjoyed meeting my fellow panelist and thought they each brought important perspectives on the tax system: Carol Markman, a CPA from Long Island; Professor Mihir Desai from Harvard Law School and Business School and Bruce Bartlett who had served in prior administrations and on the Hill.
The Senate Finance Committee has a membership equal to more than 25% of the Senate, viz., 26 members. The ornate horseshoe of the committee members’ seats stood before the table where the four of us sat. I occupied the end seat at the left side of the table. As I took my seat, easily identified by a name plate, I wondered if that meant I was going first or last, wished I had asked about this detail, and hoped fervently for last. I got my wish.
Since I had not adequately prepared by learning exactly what would happen, I experienced the process in real time. Chairman Hatch, after arriving a little bit late from having to open the full Senate session, began the proceeding by talking about the reason for the hearing and introducing the panelist. When he got to me, he turned the introduction over to Senator Casey, my home state Senator – a nice touch. After Senator Hatch’s remarks and the introductions, Ranking Member Wyden also made remarks and then it was time for the panelist. We testified in the order I listed the panelist above with me going last. We each had a little clock in front of us counting down from five minutes with a red light to let you know when your time was up.
After we had all finished, Senator Hatch called upon the Senators who were present – a fraction of the possible 26 members – to ask us questions or to make statements about tax simplification or some combination of both. Some Senators focused their questions on a specific panelist while others asked the same question of us all. Senator Casey asked me specific questions which allowed me to expand on my testimony topic. Professor Desai and Mr. Bartlett were the most popular members of our panel based on the quantity of questions.
The hearing lasted about 1:45 and ended around noon. The time flew by. My primary goal was to avoid deeply embarrassing myself with the hope that I might say something about the plight of low income taxpayers that would resonate with one or more of the Senators or their staffers. I tried to make the point that we should simplify the tax process by focusing on getting things right at the time people file their tax returns. Instead of focusing on how fast a refund can be issued following the filing of a return, we should focus on how we can insure the correctness of the returns that are filed so that low income taxpayers will not enter the tax controversy process. Keeping low income taxpayers out of the tax controversy process, I feel, will greatly simplify their lives because the process does not work well for most low income taxpayers. My written testimony and my response to the questions for the record from Senator Hatch as well as my testimony itself, provide my views on how to accomplish this. In short, I would push the filing season back slightly to allow the IRS to load the third party data before processing the returns so that matching can occur before refunds are issued rather than waiting until several months after issuing refunds to execute this match. I believe this will significantly cut down on identify theft and preparer fraud. I also think the IRS should have authority to regulate preparers in order to further insure the correctness of the filed returns.
My responses to the questions from Senator Casey more than used up the five minutes allotted to him. He stated at the end of that time that he would send me questions for the record. I wondered what that meant. After the hearing I asked someone knowledgeable and found out. The Senate has a formal process of supplementing the record with written questions and responses that get placed into the record of the hearing. On March 23rd I received three questions for the record from Senator Hatch. One specifically related to my testimony and two asked for my responses to the testimony of another panelist. The question concerning my testimony was helpful just as a question in an oral argument is helpful because it allows me to gain some insight into how my remarks were understood and to expand on my prior written and oral remarks. It also allowed me to know that someone did read and think about my remarks. My written response to the questions for the record completed my whirlwind interaction with the Senate unless I hear further from Senator Casey or others.
The process provided a great civics lesson for me as well as an opportunity to represent my clients in a different and important forum. My deepest thanks to Nancy for recommending me, Ryan for reaching out to me, Senator Hatch and his staffer Caleb Wiley for following through with the invitation, to Senator Casey for his introduction, and to everyone involved in making the experience possible. If you get called to testify, hopefully you will have more time to prepare and do a better job of getting ready. It is an interesting process.