Internal Revenue Service commissioner Chuck Rettig testified Wednesday before a House oversight subcommittee about the IRS’s performance during the novel coronavirus pandemic, where he heard complaints from lawmakers about their constituents missing stimulus payments.
The hearing also focused on the financial condition of the IRS and the state of its aging technology systems.
Cathy Lanning serves as Senior Vice President for the Property & Casualty Marketing organization. In this role, she is responsible for the development and execution of integrated marketing plans for personal and commercial insurance products. Together with her team, she builds the brand and the Nationwide business leveraging data-driven direct marketing, partnerships, digital media, social media, cooperative agency marketing and lead generation strategies.
Most recently, Cathy led Strategic Partnerships where she established a large partnership portfolio with a data driven relationship-based selling approach. Together with partners such as alumni associations, cause organizations and sports organizations, Nationwide was able to understand the exact needs of a household and bring the right solutions at the right time to meet their protection needs. Under her leadership, the business unit grew by over 100% in five years.
Cathy joined Nationwide in 2007 as part of the leadership team that launched Nationwide Bank. Throughout her tenure at the company, she has held roles that require innovation, vision and team building. This includes establishing new digital marketing tools for agents, launching new products in the market, and establishing the Marketing Analytics organization. The Marketing Analytics organization delivered the first-generation marketing mix models, comprehensive digital analytics, and forecasting models, all of which helped Nationwide understand marketing effectiveness across channels and identified investment optimization pathways. The insights served the business lines across the company and opened new horizons for efficient growth and retention.
She has broad experience in brand management, analytics, partnership development, direct marketing, distribution marketing, innovation, product development and strategic planning. Prior to joining Nationwide, Cathy was the Brand Manager at The Scotts Company and Product Manager at WorldCom focused on Virtual Private Networks.
Cathy is a proud Ohio State University alumnus, holding a Bachelor of Science in Psychology, a Bachelor of Science in Business Administration (Marketing) and Masters in Business Administration. She is also a graduate from the Northwestern Kellogg Senior Women in Leadership program.
Outside of work, Cathy is a passionate advocate for education and community learning programs. To live this mission, Cathy serves on the board of The Ohio State University Alumni Association, The Girl Scouts of Ohio’s Heartland and The Wellington School.
Shelley Brazeau Temple serves as President of Nationwide P&C Personal Lines. In this role, Shelley is responsible for all aspects of the Personal Lines Profit and Loss (P&L) segment including product, underwriting, sales and distribution, claims and service.
She most recently served as Nationwide P&C Senior Vice President and Chief Claims and Operations Officer. Prior to that, she served as Senior Vice President of Member Solutions, leading the company’s insurance servicing and billing operations and direct phone sales organization.
Other leadership positions she has held are:
- Regional Vice President of Nationwide’s South Central Operations, responsible for sales, pricing, underwriting and product in a six-state geography, and managing a more than $660 million in sales revenue through exclusive agents and direct sales.
- VP of Strategy and Operational Effectiveness for Customer Service and Direct Sales of Nationwide, developing and executing an innovative contact center strategy.
- VP of Personal Lines Service Operations, responsible for personal lines service and processing center operations.
Shelley began her career at Nationwide as a Claims associate 27 years ago. Her increased responsibilities in leadership positions throughout the years also led her to work with internal audits, product and agency sales.
Shelley holds a bachelor’s degree from Bowling Green State University and the Chartered Property and Casualty Underwriting (CPCU) designation. She has served on several non-profit boards, including Ronald McDonald Children's Charities and the American Lung Association of the Midland States with participation in development, audit/finance and executive committees.
As an accounting professional, these are tough days. But that doesn’t mean your practice can’t grow during this season.
“IRS employees have worked around the clock since mid-March to develop new tools and deliver meaningful guidance to simultaneously deliver Economic Impact Payments in record time while still keeping the annual filing season on track,” Rettig said in his opening statement. “In fact, millions of Americans started seeing EIPs show up in their banking accounts within 14 days after the CARES Act was enacted on March 27. So far, more than 160 million payments totaling more than $270 billion have been delivered, most by direct deposit and some by paper check or prepaid debit card.”
He noted that in the IRS’s efforts to deliver the Economic Impact Payments, the agency balanced the statutory requirement to provide the payments as “rapidly as possible” with the need for accuracy and concern about potential fraud. He pointed to a report in June from the Treasury Inspector General for Tax Administration saying the IRS correctly computed the payment amount for approximately 98 percent of the more than 157 million EIPs issued as of May 21.
Subcommittee chairman Gerald Connolly, D-Virginia, praised the IRS’s ability to operate during the pandemic despite years of budget cuts and aging computer systems, but also pointed to the complaints about the stimulus payments that were never received.
“While our witnesses will testify that the IRS did what it could with the available resources, it’s what didn’t get done that is really troubling,” he said. “It’s the millions of taxpayers who were unable to get their refunds because they filed a paper return. It’s the millions of tax returns that hit a snag and the corresponding taxpayers couldn’t get assistance because IRS call centers were closed. It’s the 9 million people who have yet to receive their stimulus checks, primarily because the IRS does not have their information because their income is so low they don’t qualify to file a return. These are our nation’s most vulnerable. We have a duty to help.”
Rettig pledged to do more to help. “Although the IRS has sent out the vast majority of these payments, it continues its extensive outreach efforts into the historically underserved communities of our nation,” he said. “We have remained especially focused on getting payments out to people who are homeless, who don’t normally have a return filing obligation, or who otherwise live their life outside normal lines of communication. The IRS is taking every possible step to reach potential EIP recipients. We have extended our reach far beyond our normal contacts to many lower-income, military, veterans, retired, older, limited English proficient, and homeless communities around the country. In fact, we have worked with our partners to distribute EIP outreach materials in 35 languages within these communities.”
He pointed to the IRS’s efforts to offer tax information in Spanish and other languages, noting his wife is an immigrant for whom English wasn’t her first language. Rettig said the IRS has also been getting assistance from hundreds of local community groups and religious organizations and has developed a special online toolkit containing helpful information for them to use in identifying and getting the word out to people who qualify for EIPs. He said the IRS is also mailing out letters to approximately 9 million Americans who either haven’t received an EIP yet, or haven’t filed a tax return for 2018 or 2019, as the stimulus payments initially went out to those who had filed returns for those prior years, using their direct deposit information on file with the agency.
Lawmakers pressed Rettig to provide more specific data about who was still owed the payments and to allow incarcerated people to receive the stimulus payments as well. The CARES Act did not specify that incarcerated individuals couldn’t receive the payments, but the IRS and the Treasury Department later made that interpretation. Some lawmakers argued the exclusion of incarcerated people from receiving the payments also leaves out those who are joint filers, exposing their spouses and families to further economic hardship during the recession. Rettig refused to commit to rectifying the situation, citing ongoing litigation, although a judge in California ordered the IRS last month to stop withholding the stimulus funds from incarcerated individuals and their families.
The hearing also covered other matters, such as the IRS’s relatively high audit rate of low-income taxpayers who receive the Earned Income Tax Credit compared to wealthier taxpayers. Rettig bristled angrily at accusations of improper bias at the agency.
“According to studies out of the University of Pennsylvania, by simply beefing up the auditing capacity of the IRS to allow for more oversight of the super wealthy — those claiming more than $10 million in adjusted gross income — our government would collect more than $7.5 trillion over the next decade,” said Connolly. “Because that’s the size of the tax gap that the wealthy — who fear little consequence from a beleaguered IRS — have left in our nation’s coffers.”
Connolly said he was pleased with reports this week that the IRS is finally investigating allegations of criminal tax fraud at the National Rifle Association. “I have long led congressional efforts asking the IRS and the Department of Justice to investigate the NRA and its CEO Wayne LaPierre,” he said.
The hearing also looked at the IRS’s aging computer systems. In conjunction with the hearing, the Government Accountability Office released a report that found problems with those systems.
Vijay D’Souza, director of information technology and cybersecurity at the GAO, also testified at the hearing. “Effective IT is essential to IRS’s operations and was important to the distribution of millions of economic impact payments dispersed as part of the CARES Act,” said D’Souza. “IRS’s IT budget has been fairly flat over the last 10 years.”
Rettig said the IRS has been working on improving its technology in response to the Taxpayer First Act, which Congress passed last year in an effort to reform IRS operations. He also outlined the ways the IRS has been using technology to respond to the pandemic.
“During this time, the IRS has been using innovative approaches to make sure our employees can deliver on the agency’s mission,” he said. “We have set records for the number of IRS employees teleworking, thanks to the continued support of our Information Technology division. Our IT systems continue to perform at a high level. Our internal networks are supporting approximately 57,000 employees online at the same time, all in a secure environment.
He noted that the IT department provided the equipment necessary to allow thousands of IRS customer service representatives to telework, and the IRS was able to continue bringing on new employees through the use of a virtual onboarding process.
“We have also been continuing the agency’s ongoing work to find new ways to serve taxpayers, including our efforts to expand online and other options for them,” Rettig added. “For example, this summer for the first time we began offering an electronic filing option for taxpayers who need to amend their income tax returns. Providing an online filing option for the amended return — also known as Form 1040-X — has been an IRS goal for many years and is a major milestone for us. Electronically accepting Form 1040-X posed a number of unique challenges, but we succeeded thanks to a great deal of hard work by employees across the agency.”
Some lawmakers agreed with Rettig that the IRS could use a bigger budget to update its computer systems, some of which date back to the Kennedy administration.
“We need to be asking what the IRS could have done to help our country if it had been properly funded and adequately staffed, instead of being subjected to years of bitter Republican abuses,” said Rep. Carolyn Maloney, D-New York.
National Taxpayer Advocate Erin Collins said the IRS could use some help with its technology to deal with the pandemic and just the regular tax season. “In the best of times, the filing season presents challenges for the IRS,” she said. “Considering the additional challenges the pandemic has presented, the IRS has performed admirably. Yet despite the IRS’s best efforts, some taxpayers experienced unusual difficulties in their dealings with the IRS. While a portion of those difficulties is attributable to the impossibility of anticipating and planning for the impacts of a national shutdown, some of the difficulties would have been substantially lessened if the IRS had better technology and more staff to meet the needs of taxpayers.”
