Author: Ella Fertitta

Walorski Marks Final Tax Day Under Broken Tax Code

Walorski Marks Final Tax Day Under Broken Tax Code

Hoosiers Will See Tax Cuts, Bigger Standard Deduction, Simplified Tax Code Next Year

WASHINGTON – U.S. Rep. Jackie Walorski (R-Ind.) today released the following statement ahead of Tax Day, which this year falls on Tuesday, April 17th:

“No one looks forward to Tax Day, but this year there’s some good news: it’s the last time Americans will have to file their taxes under the old, broken tax code. Hardworking Hoosiers are already seeing the benefits of historic tax cuts, including bigger paychecks, more job opportunities, and a growing economy. And when Tax Day comes again next year, working families will be able to keep more of the money they earn and spend less time filing their taxes under a fairer, simpler tax code.”

BACKGROUND

The Tax Cuts and Jobs Act, which was signed into law at the end of 2017, cut taxes for Americans at all income levels. When taxpayers file their 2018 taxes next year, they will do so under a simpler tax code with lower rates, a nearly-doubled standard deduction, and a doubled child tax credit. According to the Ways and Means Committee, the average middle-income family in Indiana’s 2nd District will see a tax cut of $1,979.

The House this week will consider several bipartisan bills to overhaul the Internal Revenue Service (IRS), including a measure introduced by Congresswoman Walorski to strengthen IRS accountability for modernizing its information technology (IT) systems.

Walorski represents the 2nd Congressional District of Indiana, serving as a member of the House Ways and Means Committee.

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Walorski Discusses Jobs Gap with Hoosier Manufacturer at Ways and Means Hearing

Walorski Discusses Jobs Gap with Hoosier Manufacturer at Ways and Means Hearing

Local Business Smoker Craft Among Job Creators to Testify About Workforce Development Efforts

WASHINGTON – U.S. Rep. Jackie Walorski (R-Ind.) today discussed challenges businesses and workers face due to the jobs gap at a hearing that included testimony from a local manufacturer. Peter Barrett of Smoker Craft, a boat manufacturer in New Paris with 690 employees, testified before the Ways and Means Human Resources Subcommittee about the need for skilled workers and efforts to get more Hoosiers into the workforce.

“For local manufacturers like Smoker Craft, business is booming, but the jobs gap continues to create challenges,” Congresswoman Walorski said after the hearing. “Businesses need more skilled workers, and too many Americans remain on the sidelines of our growing economy.  As we work to find commonsense solutions, I’m grateful Peter was here to testify about the need for workforce development so this family-owned business can continue to create good jobs for Hoosiers.”

“The concept of workforce training programs is vital to bridging the jobs gap we are facing today and in the future,” Barrett testified before the subcommittee. “Simply put, we need skilled workers. Our industry needs welders, riveters, assembly people, and truck drivers. Shop classes need to return, and exposure to careers in manufacturing through internships and apprenticeships should be encouraged. Careers in the trades need to be recognized and glorified. Our workforce is the backbone of this country. We need to support the expansion of career and technical education, or CTE, just as we support four-year and graduate education.”

Video of Barrett’s opening statement and Walorski’s questions is available here.

Rep. Jackie Walorski thanks Peter Barrett and his wife Christine after today’s hearing.

BACKGROUND

The hearing on “Jobs and Opportunity: Local Perspectives on the Jobs Gap” was the first in a series of hearings examining the gap between businesses’ demand for workers and the millions of Americans not in the labor force. According to the Ways and Means Committee, 5.5 million Americans aged 16 to 24 – one in seven – are not working or in school, and an additional 7 million working-age men are not working or looking for work.

Founded in 1903, Smoker Craft, Inc., is a fourth-generation family-owned and operated boat manufacturer. The company employs 690 workers and manufactures pontoon boats, fiberglass boats, and aluminum fishing boats under the brand names Smoker Craft, Starcraft, Sunchaser, and Sylvan. Peter Barrett is senior vice president of marketing and corporate development at Smoker Craft.

Walorski represents the 2nd Congressional District of Indiana, serving as a member of the House Ways and Means Committee.

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Walorski Shares Feedback from Hoosier Businesses Impacted by Tariffs at Hearing

Walorski Shares Feedback from Hoosier Businesses Impacted by Tariffs at Hearing

Committee Examines Tariff Effects on U.S. Economy and Jobs

WASHINGTON – U.S. Rep. Jackie Walorski (R-Ind.) today shared feedback from Hoosier businesses affected by steel and aluminum tariffs at a Ways and Means Committee hearing on the impact of tariffs on the U.S. economy and jobs.

“Historic tax cuts and regulatory reforms have revived America’s economy, but I am constantly hearing from businesses in northern Indiana that steel and aluminum tariffs are driving up costs and making it more difficult for them to grow and create jobs,” Congresswoman Walorski said after the hearing. “The administration has taken steps to narrow these tariffs to better target unfair trade, but more must be done to protect businesses and jobs here at home. I will continue listening to Hoosier manufacturers, farmers, and workers and making sure their voices are heard so we can keep our economic momentum going.”

Video of Walorski sharing local businesses’ feedback at the hearing is available here. She read the following quotes from Hoosier job creators in a wide range of industries:

  • “[We’ve seen] a 50% increase [in the price of steel], mostly since the tariffs were announced. Additionally…there is a shortage of steel. We are furloughing the production line in [one facility] today and will probably have to furlough some of the guys in [our main facility] later in the week due to lack of availability of material. We have raised prices to our customers but because [our product is] a low margin item – the combination of the increase and the lack of availability is affecting sales.”
  • “We cannot switch to a U.S. source…and it would take 1 to 2 years for us to get approval from our…customers if there was a U.S. source. We will continue to import steel…and will pay the duties…So far we have incurred about $15,000 in tariff costs with a potential of another $240,000 based upon the orders we have already booked with [our] Japanese steel supplier…We are moving forward with our Exclusion Requests…So far the cost has been close to 100 hours to complete these exemption forms along with some legal costs for review and advice.”
  • “We have rolling shortages of steel and we are on allocation [from our supplier in Utah]… Prices had already gone up 25% and 30% respectively [on aluminum and steel] because of speculation. Now we are seeing a trend past 30-35% each. Of course I am livid.”
  • “We observed steel prices starting to move up in early 2017 on just the talk of potential steel tariffs and a sharp escalation in steel prices in the last 3 months as the tariffs started to become a reality. This has resulted in a 15% to 29% increase in the cost of our steel. To put this in perspective, our increase in steel cost is larger than the entire cost of providing health insurance to our workforce.
  • “We are the sole manufacturer left in the United States that manufactures this type of product. Our competitors import all or most of their finished product from either Mexico, China, Vietnam, etc, therefore avoiding any impact of this tariff…The bottom line is this, if you raise our steel and aluminum prices, our prices will have to increase in order to cover the cost. Our foreign competitors will not be affected…We currently purchase all our steel and aluminum from domestic sources.”
  • “We are in the process of trying to build a 147,000 square foot warehouse…[The company building the warehouse] gets their steel from Canada, a country exempted from the steel tariff. However, we are unable to get a firm quote even out of Canada, because prices are beginning to rise there with so much demand shifted to Canada…It is not on hold, we have to build it so we are at the mercy of a volatile market.”
  • “When purchasing raw materials, we give preference to domestic steel mills wherever possible. We enjoy long outstanding relationships with many domestic mills. We want them to thrive…The actual dynamics of the entire metalworking market have evolved in the last 40 years…In some cases, we find that domestic mills cannot meet the quality standards required by our customers; or they cannot meet the quality standards at a competitive cost. In those cases, we will buy foreign material…Why put a tariff on these items?

BACKGROUND

Congresswoman Walorski has worked to minimize the harmful impact of the steel and aluminum tariffs that recently took effect. After Walorski led 15 of her Ways and Means colleagues in sending a letter to Commerce Secretary Wilbur Ross urging retroactive relief for companies that successfully petition for product exclusions from the tariffs, President Trump signed an order ensuring tariffs paid while a product exclusion request is pending will be returned if the exclusion is granted.

Walorski also recently pressed U.S. Trade Representative (USTR) Robert Lighthizer on the administration’s response to threats of retaliatory tariffs that could harm American farmers, manufacturers, and other small businesses. She called on the administration to consider the impact retaliatory measures could have on small businesses and family farmers in Indiana.

Walorski represents the 2nd Congressional District of Indiana, serving as a member of the House Ways and Means Committee.

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Ways and Means Passes Walorski Measure to Strengthen IRS IT Accountability

Ways and Means Passes Walorski Measure to Strengthen IRS IT Accountability

House Set to Vote on Bipartisan IRS Reform Package After Committee Advances Overhaul Bills

WASHINGTON – The House Ways and Means Committee today approved bipartisan legislation to overhaul the Internal Revenue Service (IRS), including a measure introduced by U.S. Rep. Jackie Walorski (R-Ind.) to strengthen IRS accountability for modernizing its information technology (IT) systems.

“The IRS works for the American people, and it needs modern IT systems to serve taxpayers effectively,” Congresswoman Walorski said. “However, repeated failures, delays, and cost overruns have put the IRS behind the technology curve and left taxpayers on the hook. We are taking a critical step with this bipartisan legislation to close the trust gap by restoring IRS accountability, modernizing IT systems, and putting American taxpayers first.”

Video of Walorski speaking about the legislation at today’s markup is available here.

BACKGROUND

The House Ways and Means Committee approved several bills to reform the IRS and strengthen accountability to better protect taxpayers, including the bipartisan 21st Century IRS Act (H.R. 5445). This legislation contained Walorski’s bill, the IRS Information Technology Accountability Act (H.R. 5362), which would improve accountability by codifying the role of the IRS’s chief information officer (CIO) and establishing clear responsibilities, including:

  • Developing and implementing a multiyear strategic plan for the IRS’s IT needs, to be updated annually and aligned with the overall strategic plan of the IRS.
  • Developing, implementing, and maintaining IT systems, and ensuring they are secure and integrated.
  • Coordinating with the IRS’s chief procurement officer to ensure all IT acquired by the IRS is consistent with these goals.
  • Maintaining operational control of all IT for the IRS.
  • Serving as the principal advocate for the IRS’s IT needs.

Further, it would clarify the definition of “information technology” and require the chief procurement officer to provide advance written notice of all significant IT acquisitions to the CIO. It would also require IRS to have an independent third party verify and validate plans for the completion of the Customer Account Data Engine 2 (CADE 2) and Enterprise Case Management (ECM) systems.

The IRS relies on several legacy IT systems, some dating back to the 1960s, but has struggled to complete major IT modernization projects despite spending approximately $2.4 billion annually on IT.

  • Nearly 10 years after the IRS began developing CADE 2, a new system for individual tax account data, it has spent more than $1 billion on the project, which is still years away from completion.
  • The IRS began developing a streamlined, centralized ECM system in 2015, to be implemented in December 2018, but last year the project was suspended in part because the IRS determined the software product procured for ECM could not support an enterprise-wide deployment.
  • Five years after embarking on the Return Review Program (RRP), a new fraud detection program, the IRS put the project into “strategic pause” in 2014, in part to answer basic questions about its purpose, direction, and role in the broader IRS vision. RRP is now operational, but it came in years behind schedule and hundreds of millions of dollars over budget.

Walorski highlighted these and other IRS IT modernization failures at a January hearing of the Ways and Means Oversight Subcommittee. She also questioned IRS officials at a hearing in October about the no-bid contract awarded to Equifax following its massive data breach.

Walorski represents the 2nd Congressional District of Indiana, serving as a member of the House Ways and Means Committee.

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Walorski Statement on China Tariffs

Walorski Statement on China Tariffs

MISHAWAKA, Ind. – U.S. Rep. Jackie Walorski (R-Ind.) today released the following statement after the administration released a preliminary list of Chinese products to be subject to tariffs:

“President Trump is right to take action to address China’s unfair trade practices, in particular their rampant intellectual property theft that hurts our economic growth, stifles innovation, and costs American jobs. However, any action must be targeted and balanced to avoid reversing the economic momentum driven by historic tax cuts and regulatory reforms. I will continue working with the administration to protect Hoosier manufacturers, farmers, and workers.”

BACKGROUND

At a recent House Ways and Means Committee hearing, Congresswoman Walorski pressed U.S. Trade Representative (USTR) Robert Lighthizer on the administration’s response to threats of retaliatory tariffs that could harm American farmers, manufacturers, and other small businesses. She called on the administration to consider the impact retaliatory measures could have on small businesses and family farmers in Indiana.

Walorski has also worked to minimize the harmful impact of the steel and aluminum tariffs that recently took effect. After Walorski led 15 of her Ways and Means colleagues in sending a letter to Commerce Secretary Wilbur Ross urging retroactive relief for companies that successfully petition for product exclusions from the tariffs, President Trump signed an order ensuring tariffs paid while a product exclusion request is pending will be returned if the exclusion is granted.

Walorski represents the 2nd Congressional District of Indiana, serving as a member of the House Ways and Means Committee.

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Walorski Announces 2018 Congressional Art Competition

Walorski Announces 2018 Congressional Art Competition

Winning Artwork Will Be Displayed in U.S. Capitol for One Year

WASHINGTON – U.S. Rep. Jackie Walorski (R-Ind.) today announced the 2018 Congressional Art Competition and invited high school students throughout Indiana’s 2nd District to submit their original artwork by Friday, April 13th.

“Every spring I look forward to seeing the wide variety of artwork from our incredibly talented young Hoosier artists,” Congresswoman Walorski said. “I encourage all interested high school students in the 2nd District to take this opportunity to showcase their hard work, passion, and creativity.”

BACKGROUND

The winning submission will be displayed in the U.S. Capitol for one year alongside winning artwork from other congressional districts nationwide. The deadline for entering the 2018 Congressional Art Competition is Friday, April 13th. Information about submitting artwork, including guidelines and key dates, can be found at walorski.house.gov/art.

Each spring, members of Congress sponsor a nationwide high school arts competition. The Congressional Art Competition is an opportunity to recognize and encourage artistic talent across the nation, including in Indiana’s 2nd Congressional District. Since the contest began in 1982, more than 650,000 high school students have been involved.

Walorski represents the 2nd Congressional District of Indiana, serving as a member of the House Ways and Means Committee.

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House Passes Bill to Rebuild Military, Invest in Infrastructure, Boost Opioid Response

House Passes Bill to Rebuild Military, Invest in Infrastructure, Boost Opioid Response

FY18 Funding Legislation Also Includes Walorski Provision to Reduce Costs and Red Tape for American Manufacturers

WASHINGTON – U.S. Rep. Jackie Walorski (R-Ind.) today released the following statement after the House passed legislation to rebuild the military, give servicemembers a raise, invest in infrastructure, combat the opioid crisis, and help American manufacturers and farmers:

“After years of neglect, our Armed Forces are finally getting the resources necessary to begin rebuilding, boost military readiness, and defend our nation from any enemy. With this bill, we are delivering on our constitutional obligation to provide for the common defense. And we are giving our troops the tools, training, and support they need – including their biggest pay raise in eight years.

“We are also making key investments in fighting the opioid epidemic, modernizing our nation’s infrastructure, securing our borders, making schools safer, and supporting American manufacturers, farmers, and small businesses. This is a critical step as we continue building on the economic momentum from pro-growth reforms and working toward commonsense solutions that help Hoosier families thrive.”

BACKGROUND

The House passed the Consolidated Appropriations Act, 2018 (H.R. 1625) by a vote of 256 to 167. The bill, which provides funding for the remainder of fiscal year 2018, now heads to the Senate.

National Defense: Supports rebuilding our Armed Forces by providing the largest increase in defense funding in 15 years, including resources to increase troop levels, boost military readiness, improve training, and invest in maintenance and new equipment. It also funds a 2.4 percent pay raise for our servicemembers – their biggest in eight years.

Veterans: Includes record funding for the Department of Veterans Affairs (VA), including more resources for health care, addiction treatment, and facility improvements.

Opioids: Provides nearly $4 billion to help communities fight the opioid epidemic – the largest federal investment to date – including funding for treatment, prevention, and law enforcement.

Manufacturers: Cuts costs and red tape for American manufacturers, including in the RV industry, with a provision Walorski authored to fix a technical issue in the Generalized System of Preferences (GSP) tariff relief program, which is reauthorized for three years.

Farmers: Fixes the Section 199A “grain glitch,” a drafting error in the Tax Cuts and Jobs Act to ensure farmers get the same tax benefits when they sell to private companies as they would when selling to co-ops. Walorski recently signed a letter urging congressional leaders to quickly resolve the issue.

Infrastructure: Invests in building a modern infrastructure for the 21st century, including roads, bridges, public transit, airways, railways, waterways, energy, and broadband. Walorski led

Border Security: Boosts border security by funding $2.9 billion in security improvements and technology, including $1.57 billion to begin construction of the border wall.

School Safety: Protects students by implementing key provisions of the STOP School Violence Act, which the House passed last week, and providing more than $2.3 billion in new funding for mental health, training, and school safety programs. The bill also fixes and fully funds the FBI’s National Instant Criminal Background System (NICS) to keep guns out of the hands of dangerous criminals while protecting the Second Amendment rights of law-abiding Americans.

Tax Cuts: Ensures the Internal Revenue Service (IRS) has the resources necessary to fully implement the Tax Cuts and Jobs Act, the historic tax reform law that cut taxes for Americans at all income levels and restored America’s economic competitiveness.

Walorski represents the 2nd Congressional District of Indiana, serving as a member of the House Ways and Means Committee.

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Walorski to Secretary Ross: “This Is About Jobs in My District”

Walorski to Secretary Ross: “This Is About Jobs in My District”

In Ways and Means Hearing, Ross Confirms Price of Aluminum and Steel Used by RV Manufacturers Increased Ahead of Tariffs

WASHINGTON – U.S. Rep. Jackie Walorski (R-Ind.) today pointed to charts provided by Commerce Secretary Wilbur Ross in a hearing on tariffs that confirm what local manufacturers have told her: steel and aluminum prices have already increased ahead of the tariffs set to take effect tomorrow.

“This is about jobs in my district,” said Congresswoman Walorski to Secretary Ross, who testified before the Ways and Means Committee. “You say this chart says that the RV industry will be fine. With all due respect, this chart cannot speak, but the RV manufacturers in my district can. What they and other manufacturers in my district have been telling me over the last year is that while tariffs take effect tomorrow, the mere threat of tariffs has been felt already.”

BACKGROUND

Secretary Ross testified before the full Ways and Means Committee about the tariffs on steel and aluminum set to take effect Friday. Congresswoman Walorski last week led 15 of her Ways and Means colleagues in sending a letter to Secretary Ross urging retroactive relief for companies that successfully petition for product exclusions from the tariffs.

In a hearing on Wednesday, Walorski pressed U.S. Trade Representative (USTR) Ambassador Robert Lighthizer on the administration’s response to threats of retaliatory tariffs that could harm American farmers, manufacturers, and other small businesses.

Walorski previously sent a letter to President Trump expressing concerns with his tariff proposal and sharing feedback from local manufacturers. She also signed a letter, along with 106 of her House Republican colleagues, urging the president to target unfair trade practices rather than impose blanket tariffs.

Video of Walorski questioning Ross at today’s hearing is available here. A transcript of their exchange is below.

REP. WALORSKI: It’s an honor, Secretary, to have you here. I want to talk about the graph that you referenced earlier, and I’m grateful that you included the RV industry in this. You say this chart says that the RV industry will be fine. With all due respect, this chart cannot speak, but the RV manufacturers in my district can. What they and other manufacturers in my district have been telling me over the last year is that while tariffs take effect tomorrow, the mere threat of tariffs has been felt already.

One RV manufacturer told me that the same model is 8.5 percent more expensive compared to last year. A trailer manufacturer has had to raise prices 25 to 30 percent. He told me on the phone, “I’m livid. We are getting destroyed.” He said the tariffs haven’t started, but they’ve been felt.

I can’t tell you how many manufacturers have told me about steel and aluminum shortages already. I can’t tell you how many manufacturers who already source their steel and aluminum domestically, who we shouldn’t want to hurt, but have seen the price of their inputs increase anyway. Again, the tariffs start tomorrow, but they’ve already been felt in these industries.

I’ve heard from manufacturers that source from abroad – not because they want to, it’s because they are forced to. The domestic suppliers simply refuse to make the input for their specifications.  What ever happened to the customer is always right? Well those business owners are now worried that the very same supplier that refused to make their product to specs in the last year now only needs to say that they could make it to prevent an exclusion, hurting these industries further.

Here’s the thing: the RVs, boats, and trailers manufactured in my district are price-sensitive. An 8.5 percent increase in the price of an RV is real money to real people. A couple looking at that increase may say, well, we’re going to wait, or we’ll simply go spend the money on something else. For pontoon boats, a 10-cent increase in aluminum increases the boat cost by $750, so a company that normally sells 2,000 pontoons would only be able to sell 400 with that increase, and pontoons are already on the EU retaliation list.

Elkhart County saw 20 percent unemployment during the financial crisis. It was devastating for workers, families, companies, and communities. But they’ve rebounded, and unemployment is around 2 percent right now. But they’re worried that the momentum that they worked so hard to claw back is about to be reversed.

What your chart does show, Mr. Secretary, is that steel and aluminum prices have spiked in the last year, and what RV manufacturers are telling me, that means for them is that where they once expected 10 percent growth this year, they’re now hoping for flat growth. So I appreciate your charts that are trying to educate me on what’s happening in my district, but I’m telling you that simply is not the case.

SEC. ROSS: I think it’s unfortunate that there’s been a lot of speculation on the part of people withholding inventory, people jacking up prices. If you look at the price movement, it actually is well in excess of any possible impact that the tariffs might have. So there’s been a lot of speculation going on. I think you’ll see things adjusting once people understand what the real situation is. I think it’s very unfortunate that speculators tried to take advantage of the consuming industries during recent months.

REP. WALORSKI: This is about jobs in my district. And we’ve seen the price increases in the last year, so what starts tomorrow, I’d have to see proven wrong pretty quickly, because this is a danger to jobs.

Walorski represents the 2nd Congressional District of Indiana, serving as a member of the House Ways and Means Committee.

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Walorski Statement on Retroactive Relief for Tariff Exclusions

Walorski Statement on Retroactive Relief for Tariff Exclusions

Administration Working Toward Retroactive Relief for Businesses; Will Exempt EU, Other Allies from Tariffs

WASHINGTON – U.S. Rep. Jackie Walorski (R-Ind.) today released the following statement on the Trump administration decisions to consider providing retroactive relief for businesses that successfully petition for product exclusions from steel and aluminum tariffs and to exempt the European Union (E.U.), Australia, Argentina, Brazil, and South Korea:

“Manufacturers and small businesses in northern Indiana and across the country have made clear that across-the-board tariffs would reverse our economic momentum and destroy jobs. I’m pleased the administration is listening to these voices and further narrowing tariffs to better target bad actors while protecting American businesses, workers, and consumers.

“I’m especially encouraged the administration is moving toward providing retroactive tariff relief to businesses granted product exclusions, a commonsense policy I led my colleagues in calling for and one I hope will be implemented swiftly. I look forward to continuing to work to ensure a robust and fair process so Hoosier manufacturers have access to the products they need.”

BACKGROUND

Congresswoman Walorski last week led 15 of her Ways and Means colleagues in sending a letter to Secretary Ross urging retroactive relief for companies that successfully petition for product exclusions from the tariffs. In testimony today before the committee, Secretary Ross said the Commerce Department has made a formal request to U.S. Customs and Border Protection to put tariffs paid while an exclusion request is pending into an escrow account so they can be returned if the exclusion is granted.

In a hearing on Wednesday, Walorski pressed U.S. Trade Representative (USTR) Ambassador Robert Lighthizer on the administration’s response to threats of retaliatory tariffs that could harm American farmers, manufacturers, and other small businesses.

Walorski previously sent a letter to President Trump expressing concerns with his tariff proposal and sharing feedback from local manufacturers. She also signed a letter, along with 106 of her House Republican colleagues, urging the president to target unfair trade practices rather than impose blanket tariffs.

Walorski represents the 2nd Congressional District of Indiana, serving as a member of the House Ways and Means Committee.

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Walorski Introduces Bill to Strengthen IRS Accountability for IT Systems

Walorski Introduces Bill to Strengthen IRS Accountability for IT Systems

Legislation Would Establish Clear Responsibilities for Top IT Official, Mandate Strategic Planning

WASHINGTON – U.S. Rep. Jackie Walorski (R-Ind.) today introduced legislation to strengthen Internal Revenue Service (IRS) accountability for the billions of taxpayer dollars it spends each year to develop and maintain information technology (IT) systems.

“The IRS exists to serve taxpayers, and they need modern technology and a strong IT infrastructure to do that effectively,” Congresswoman Walorski said. “However, after repeated mistakes, failures, and excuses, the American people have lost confidence that the IRS can get it right. This bill will help close the trust gap by restoring accountability, reforming the acquisition process, and improving long-term strategic planning so taxpayers once again have an IRS that works for them.”

BACKGROUND

The IRS Information Technology Accountability Act (H.R. 5362) would improve accountability by codifying the role of the IRS’s chief information officer (CIO) and establishing clear responsibilities, including:

  • Developing and implementing a multiyear strategic plan for the IRS’s IT needs, to be updated annually and aligned with the overall strategic plan of the IRS.
  • Developing, implementing, and maintaining IT systems, and ensuring they are secure and integrated.
    Coordinating with the IRS’s chief procurement officer to ensure all IT acquired by the IRS is consistent with these goals.
  • Maintaining operational control of all IT for the IRS.
  • Serving as the principal advocate for the IRS’s IT needs.

Further, the bill would clarify the definition of “information technology” and require the chief procurement officer to provide advance written notice of all significant IT acquisitions to the CIO. It would also require IRS to have an independent third party verify and validate plans for the completion of the Customer Account Data Engine 2 (CADE 2) and Enterprise Case Management (ECM) systems.

The IRS relies on several legacy IT systems, some dating back to the 1960s, but has struggled to complete major IT modernization projects despite spending approximately $2.4 billion annually on IT.

  • Nearly 10 years after the IRS began developing CADE 2, a new system for individual tax account data, it has spent more than $1 billion on the project, which is still years away from completion.
  • The IRS began developing a streamlined, centralized ECM system in 2015, to be implemented in December 2018, but last year the project was suspended in part because the IRS determined the software product procured for ECM could not support an enterprise-wide deployment.
  • Five years after embarking on the Return Review Program (RRP), a new fraud detection program, the IRS put the project into “strategic pause” in 2014, in part to answer basic questions about its purpose, direction, and role in the broader IRS vision. RRP is now operational, but it came in years behind schedule and hundreds of millions of dollars over budget.

Walorski highlighted these and other IRS IT modernization failures at a January hearing of the Ways and Means Oversight Subcommittee. She also questioned IRS officials at a hearing in October about the no-bid contract awarded to Equifax following its massive data breach.

Walorski represents the 2nd Congressional District of Indiana, serving as a member of the House Ways and Means Committee.

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