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tv   Key Capitol Hill Hearings  CSPAN  June 21, 2014 12:00am-2:01am EDT

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have started a new. the evidence today reinforces this long evident truth, the prevailing conspiracy in this matter is that of the republicans desire to stir their base, tied the problem to the white house, and keep up this drumbeat until the november election. i'm glad that you, commissioner koskinen, is here with us today to set the record straight. we are glad you are here. you started at the irs last december, after distinguished career in the public and private sectors. at omb, at freddie mac, as the chair of president clinton's y2k computer consult. so again we welcome your testimony. we are glad you are here. we look forward to your
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testimony to set the record straight. >> all right, thank you. if i recognize commissioner koskinen, for his opening statement i asked him to stand to be sworn in. commissioner koskinen, please raise your right hand. do you solemnly swear or affirm that the testimony you're about to give will be the truth, the whole truth and nothing but the truth, so help you god? >> i do. >> let the record reflect the witness answered in the affirmative. thank you. commissioner koskinen, thank you for being with us today. you will have five minutes to present your testimony with your full written statement said it for the record. you are now recognized for five minutes. [inaudible] >> chairman camp, ranking member levin, and members of the committee, thank you for the opportunity to appear before you today to provide you with an update on recent irs document productions to congress. the irs has over the past year made a nasty document production in response to inquiries from congress. in march the irs advised of this
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committee and the senate finance committee that we completed the production of documents them identified as linked to the investigation of the processing and review of applications for tax exempt status as described in the may 2013 report from the treasury inspector general for tax administration known as tigta. the production efforts included 11,000 e-mails from lois lerner former director of the irs exemplary fashion a cent or decisions division. this committee has noted they've now received more than 770,000 pages of unredacted micheel. we are sending another production to you later today, additional lois lerner e-mails but you already have more than 25,000 e-mails from ms. lerner's computer account and more than 5000 e-mails from other custodians accounts for which wh ms. lerner wasn't also a recipient. the irs expects as noted earlier in my conversation with you to complete its production of the remaining lerner e-mails to this committee by the end of the month. at that time you have all of the
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e-mails, 43,000 of them, that we have for ms. lummis computer and e-mail account for the period january 2009-may 2013. in addition is no do you have 24,000 lerner e-mails from other custodians accounts during the period that her hard drive was crashed come for a total of 67,000 lerner in this. in the course of respond to congressional requests the irs in february reviewed the e-mail available on ms. lummis custodial computer accounts with and a limited element of a search template worked out with investigators and identify the possibility of an issue because the date this tradition of e-mail was uneven. it was not within whether lerner e-mails were overlooked, missing, or at other technical issues involved. irs information technology professionals identify documents that indicated ms. lerner had experienced a computer failure in 2011 as congressman levin noted. some of those e-mails had earlier been provided last fall
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to this committee. in mid-march 4014 the irs focus on redacting materials from the non-tax writing committees and processing the rest of ms. lerner's e-mail for production. as we reviewed additional lerner e-mails, lot number to buy search terms can relevance or subject matter, in other words, all of her e-mails, the irs review team learned additional facts regarding ms. lerner's computer crashed in mid-2011 which occur before these investigations opened or the ig's report began. we learned that in 2011 the irs information technology division had tried using multiple processes at ms. lerner's request to recover the information stored on her computer's hard drive. a series of e-mails available after all of ms. lummis e-mail was loaded we count the sequence of events in 2011. a front-line manager and i.t. reported to ms. lerner in an e-mail on july 20, 2011, ethical, i checked with the technician and he still has your
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drive. he wanted to exhaust all avenues to recover the data before sending it to the hard drive cemetery. unfortunately, after receiving assistance from several highly skilled technicians including hp experts, he still cannot recover the data, unquote. ms. lerner was told by e-mail on august 1, 2011, adequate, as a last resort we center our drive to ci, that's the irs criminal investigation division, forensic lab to attempt a data recovery, the end of that corporate in india on august 5, 2011 after three weeks of attempts to retrieve her e-mails at a lois lerner's request, ms. lerner was advised quote unfortunately the news is not good. the sectors on the hard drive or bad which major data unrecoverable. i am very sorry. everyone involved tried their best, end of that quote. the committee has been provided earlier these e-mails, earlier this spring. in light of the hard drive issue, the irs took multiple
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steps over the past month to assess the situation to produce as much e-mail as possible for which ms. lerner was an offer or recipient. we replaced -- retraced, located process that include e-mail from an unrelated 2011 data collection from ms. lerner. we confirm backup tapes from 2011 no longer existed because they have been recycled pursuant to the irs normal policy. we searched e-mail from other custodians. from mid-march to late april the irs review team concentrate on loading her review all the main e-mail from ms. lerner's accounts and then repeating the entire process for quality control and to ensure that no new e-mails from ms. lerner were missing. during this time into men also were identified and reviewing lerner e-mails to and from 82 other custodians. by mid-may as result of these efforts, the irs identify the 24,000 lerner e-mails between
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january 1 and april 2011. as the search for a production of lerner e-mails was concluding i asked those working on this matter to determine whether computer systems of the other 80 to custodians had experienced any similar difficulties, especially in light of the aged equipment the irs has been increasingly using as result of its budget provisions. after the irs report on ms. lerner's e-mail production was delivered last friday to congress, it was determined earlier this week, actually on monday the seventh additional custodians had experienced hard drive failures during the search period. a hard drive failure does not automatically mean that any or all e-mails have been lost or cannot be reconstructed. given the extremely broad scope of our production effort it's not surprising we would discover that some employees have encounter some technical issues especially in light of the aging information technology infrastructure. as you know, the irs described in great detail in its public report last week its effort to
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reduce lerner e-mails. we are still assessing what affect him if he can hard drive crashes had on the e-mails of any other custodians are at this time it is too early to know if any e-mails have been lost in any of those hard drives. we are committed to continuing to work cooperatively and since billy with you, this committee, and we'll continue to provide you with updates. this concludes my testimony. i'd be happy to take your questions. >> well, thank you. what i didn't hear him that was an apology to this committee. >> i don't think an apology is owed. there's not a single e-mail has been lost since the start of this investigation. every e-mail has been preserved that we have. we have produced or will produced by the end -- >> you don't think that time period between january 2009 and april 20 levin is relevant to this investigation? >> it is a very relevant timeframe. >> the letter we received from the irs on friday the 13th admitted that lerner e-mails were lost for the two and a half year period spent they were lost
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offer hard drive but we also -- >> let me finish. i'm not finished with the question of give you an opportunity. but you failed to explain that timeline of events that led to that admission. my question to you is, from the interviews that we've had with the deputy chief of information, deputy chief information officer for the irs, i'm told the irs knew as early as february that her computer crashed supposedly caused a loss of her e-mails during the time period january 2009-2011. has the irs known since february? >> the irs new in february there was an issue. as noted we all had e-mails from ms. lerner last fall and which she recited she had had a hard drive crashed. >> in favor you knew that he knows were missing? >> in february what we knew was there's problem because we're looking at it from the standpoint of what the time frame was in which her e-mails appeared, and it appeared that were not enough e-mails in that time frame. >> so why didn't the irs notify
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congress at the time it was a problem with the potential loss of the e-mails we were investigating? >> because i thought it was important, it was my decision that we complete the investigation so we could fully advise you as to what the situation was. >> i got a letter to just two days ago that said treasury contacted the white house in april, in april of this year to tell them about the lost e-mails. who told of the treasury department? >> part in? >> who told of the treasury? the letter i received said treasury told them at april 2014. so my question is who told the treasury department? >> my understanding only from that letter which i've seen which does not say e-mail said the laws. my understanding of the letter says someone in the general counsel's office at the irs inform the general counsel's office at treasury that was an issue and the irs was investigating. >> no. the letter reads as treasure was told that treasury told the white house. we have a letter from treasury said they learned in april 2014. who told treasury?
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do know who in treasury told the white house of? >> i have no communication with the white house. >> you are the end of the irs. you don't know something this important, the content? you are unaware speak with we are part of the executive branch. we have regular fumigation with treasury. we issue regulations. we review them. were in the process of reviewing the regulations on the 501(c) issue. we have regular to mutation, particularly between our counsel's office and the treasury counsel. >> the irs new in favor or maybe even march and treasure and white house knew at least in april but congress and the american people didn't find out until june. were you purposefully not telling us? >> no spent where you purposefully not telling the american people? >> my proposal, my original thought was to complete the review of what other custodians have a problem and produce a report to you laying it all out. >> so why did the irs inform the executive branch agency, the executive, the white house but
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kept it secret from the congress who is conducting an investigation? >> we were not getting it is ago. it was our public report to you that provided you this information. there's been no attempt to keep it a secret. my position has been that when we provide information we should provide completely if we provide you input the information people sometimes tempted to lead to the wrong conclusions without will be important to to give you the full description -- >> it's okay for the white house and treasury to leap to conclusions six weaker congress but my question also is, have they been discussion within the irs about when to reveal this information to congress? >> certainly. >> these discussion included treasury? >> no. >> how did treasury find out about it speak with treasury and covers a i'm not aware. apparently the first time i knew was -- >> i will have a lot of questions to write to you to follow up with you. completely unacceptable. >> can i answer that question and get -- >> i want to move onto another
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topic. your letters describe the lois lerner e-mails as being unbreakable. >> correct. >> but failed to mention with the damaged hard drive is today. you know what actual hard drive is that crashed in 2011? >> i'm advised the actual hard drive after was determined there was dysfunctional and with experts noting that could be retrieved was recycled and destroyed in the normal process, which did was to physically destroy? >> that's my understanding. >> was it melted down? >> i have no idea what the recycler does with it. this was three years ago. >> does the irs have a system for tracking items? does the irs have a tracking system for items of? >> we track items but we don't track every item that everybody has everywhere but i'm sure we track some items. >> does someone better have a serial number for that our drug? >> i do not know whether they do or not. i was just advised as a normative one hard drive fails, the e-mail cannot be reconstructed to the hard drive is turned over to recycler's.
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>> it seems to me that it was recycled to government property would have been tracked. >> part in? >> it seems to me if it was recycled government property would have been tracked. you could walk away with property sites and there's a tracking system for the disposal of government property. >> there's tracking for computer question is lois lerner's computer continue to be functioning with a new hard drive. the hard drive fits with inside. i'm not aware whether hard drives have computers, have identifiers. >> and we get the serial number and all the other employees whose hard drives, you know seven loss of? >> if they have serial numbers you are welcome to them. >> all right because i want to hard drive and what hard drive every computer that crashed during that timeframe. so what i've learned in the last week i think calls into question every document in response the irs has given. for that matter has failed to give due this committee. the only way i see any hope of restoring confidence is established a special prosecutor with the authorities, powers and
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resources needed to uncover the truth. for the sake of the agency to restore the trust of the american people will you support the appointment of a special prosecutor? >> there are six investigations going on -- >> yes or no? >> the ideas already investigating -- >> can you give a definitive answer, yes or no, do you support the appointment of a special prosecutor? >> i -- >> on controlling the time. i'm ask a question that can have a simple yes or no answer. [inaudible] >> he has answered. >> regular order. spent i think the appointment of a special prosecutor, the ig investigation into this matter ongoing would be a monumental waste of taxpayer funds. >> is that a yes or a no? >> that is a no. >> thank you. mr. levitt is recognized. you have five minutes. >> you know, i think witnesses deserve some respect.
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i think it's in the tradition of this committee to give witnesses respect. this is not the committee of decades ago, led by people who disrespected witnesses. mr. koskinen, you had a long career. what have you done in the years of your career, briefly? >> i'm sorry, what have i done what? >> what has your career penlight? >> my great has been 20 years and the private sector turning around large troubled organization. i started my career as the chief of staff for senator walkoff before he was in the states in a concert on the presidential commission as staff member in
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late 1960. of represented new york city here for a year and a half. i was the deputy director for management at omb for three years. i was the chair of the presidents council on year 2000, for two years guiding the country through the year 2000 transition to i was asked by the bush administration to take over freddie mac as the chairman of the board when the government took over those enterprises and i was asked to come to the irs which i did last december when i was confirmed. is to the agency through these difficult times. >> the letter that went from the counsel to the president to mr. camp and mr. wyden spelled this out and indicated when the treasury was notified, when the treasury consult inform the white house counsel about this problem with the computer. it also has indicated, contrary
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to this effort by the committee and the republicans are, connect the problems, and there were serious problems with the white house, that there is no such connection. they are desperate to find a connection. they've never found it. they will keep looking because i think it makes sense for them politically. i don't think whatever clinical affiliations their we should be disrespectful. so will you repeat again what happened these last months after you found out about the computer crash, and why you decided to conduct yourself the way you did? >> we learned in february, i learnt in favor there was a potential issue with her hard drive. that was investigated through march, into early april, the
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i.t. people had uncovered the e-mails training, you can see the talk about the effort to restore her computer because the nose up and provided some time ago to this committee so they were not hidden or covered up. thereafter i told people we needed, we decided we look at all the other custodians and produce as many e-mails as we could that were, in fact, within our system which is the 24,000 t24,000 ialso asked that we i sl review all of the 82 custodians to see what, if any, happened been. our plan was when we produced, completed the production of all of lois lerner e-mails at the end of this month will provide a full report and by the time we would know what the situation was with excess but there's been a question as to why i didn't advise congress earlier and my expensive than we do better to have a discussion when you know all the facts. it's shown by the fact that on monday we were advised monday morning that there were preliminary indications that there were difficulties with a handful of custodians. that information was passed onto
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the staff of the committee on monday afternoon. immediately thereafter rather than ask us for additional information a press release went out from this committee identifying knuckle flakes as a particularly interesting person to this committee and stating that nicole's e-mails have been lost. have the committee waited to asia that release and renew further information which were continuing to drive through discovered that nicole had two computers. or office computer which she used during the day and chat and tell a computer, a portable but it was the portable computer that crashed but it ran on the same e-mail system as her office system. so it turns out there is no indication that a single nicole flax e-mail has been lost not within the press release and statements out of this committee. those press releases with regard to nicole flax were inaccurate and misleading and to demonstrate why we'll provide this committee a full report about the custodian review when it is completed. we will not dribble out the information and have it played out in the press. >> time has expired.
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mr. johnson is recognized. >> thank you, mr. chairman. thank you for holding this hearing. you know, learning about the loss of lois lerner's e-mails and other irs officials is troubling, and we received that information with great skepticism. americans have been waiting for the whole truth, and we hope to get it today but it doesn't sound like we are getting it. it's past time told all of those responsible accountable for targeting americans for their beliefs. mr. commissioner, welcome. i have some questions for you. you have argued that the irs practice is destroying employee e-mails after six months with a cost-cutting measure. in fiscal year 2011, the irs enacted budget was $12 billion, a high watermark of spending. can you tell you whether in 2011 the irs was engaged in a policy
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of destroying and reusing its backup tapes? >> actually what happened with the irs in 2000 a went on to i.t. director came, the retention policy then was only for less than three months but in point passion into those may be increased the retention back a policy to six month. it's a disaster recovery system. if the entire system goes down you can reconstitute the e-mails. those systems actually are usable and then it is a disaster you continue to produce and back up the e-mails so they are available. i would note as it did in my testimony, since the start of this investigation every e-mail has been preserved, nothing has been lost, nothing has been destroyed. >> which tells me that you got plenty of computer space. you know, i wondered at the time to you to keep track of everybody's irs requirements when you lose your own. let me just ask you, did the irs estimate the keeping and storing those would only cost $200,000 annually? >> $200,000 annually every year
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but as it grows we collect more trillions now of terabytes as a call, millions of e-mails stored over six months and the disaster recovery program, it's not come in no system as a sit in testimony is not a system of record. a system of record is, in fact, the records acted to produce carbon copies and follows in the record so that the irs has historically only preserve the backup tapes for six month. we are reviewing all of this but i told people some month ago when we get through it as we need to take a look at what we can do to actually create a more searchable in the process. the problem right now is anything anybody wants a piece of information, we have 90,000 plus, whatever employs one we have to pull the e-mails accounts, we have to pull their hard drives and then take them and vote them into a search machine to be able to discover what's in them. that is an antiquated system. i refer to our i.t. system as a model t with a gps system and a
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sound system and redone engine but it is still a model t. >> in a, my constituents and i refuse to accept that, in years of record high irs budget, you know, you wouldn't let us refuse to give you information on our tax returns. the irs destroyed employee e-mails every six months just to say 200,000 annually. i'm far too familiar with the rampant wasteful spin at the irs during that time. to date the committee is uncovered wasteful spending from the star trek videos to the spending on lavish conferences to an irs estimated 23.5 million in spending on salaries and benefits, and two bonus is going to workers who owe back taxes. mr. commissioner can you and i both know the irs go to back up employee e-mails began long before any budget cuts happened
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to that agency. there's simply no excuse for what happened. i yield back. >> mr. mcdermott is recognized for five minutes. >> thank you, mr. chairman. today we are here listening to a myth that there was a conspiracy by ms. lerner and whoever else to get rid of some data. and before i came to congress i was a physician and one of eventually did with the patient was taking history. and i would like to review the history again with you, mr. koskinen. on june 13, 2011, lois lerner's hard drive failed, meaning all her e-mails were lost at that point, is the true? >> that's correct. >> sixteen days later she was briefed that inappropriate criteria have been used in this management in cincinnati,
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according to the ig's report. is that true? >> that's what the report reports. >> wealth in the question is, did lois lerner preemptively crashed her hard drive? >> all the evidence is to the contrary but the e-mail string i told you shows that her request ex ord efforts were made to retrieve e-mails from her crashed hard drive. >> do you think did she for see something happening in the future and make the decision to destroy her own hard drive? >> the record shows quite the contrary. also after the crash on april 11 she continued to send an archived e-mails on her computer. with produce, will produce 43,000 of those, she was, in fact, going to try e-mails, visit indication in the record that her performance demonstrated that. >> in all the e-mails that have been collected is there any evidence to suggest that she
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call the white house or the white house called her and said, get those right wing organizations? >> there is none that we been able to produce and understand although announcing the production from the white house that the white house did not find any e-mail to or from lois lerner. >> and the inspector general didn't find them? >> no. his report stated that the evidence of political involvement. >> in fact as you quote, as you talked about, on july 19, 2011, lerner wrote to the feel director of customer service support for informational technology saying whatever you can do is helpful, would be greatly appreciated. now, in mid-july 2011 she learned about cincinnati. and for a couple of weeks the i.t. division tried to repair her hard drive, bringing in experts inside i.t. and also the
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forensic division of the irs, is that correct? >> that's correct. >> and they failed? >> they failed after three weeks of efforts to the e-mail trail was clear that i would note the criminal investigation division is expert in seizures in civil and criminal cases seizing hard drives and restoring e-mails. so it at that time apparently great conference you could find those e-mails, they would find them. and they were unsuccessful. >> finally she wrote, thanks for your efforts, to them. i really do appreciate the efforts. sometimes stuff happens but is this a woman rejoin us in over losing her hard drive and saying thank god that thing is gone, they will never get me? no. it's a woman who is resigned really to the fact that the thing is lost. in my office on we just upgraded. we upgraded to windows 10 --
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2010. and my staff director in washington state lost her hard drive. they friday. i don't know how it happened. nobody knows how it happened. she lost all her records. she did not rejoice over that experience, i can tell you. but dimly, fast-forward to february 24, 2014, and chairman camp asked for all, and i emphasize all lois' e-mails. is there anything you can see in the time that you've been there that they didn't, that the irs did not do to try and get all? >> doesn't in the kitchen but as is it would've gone to great length. would retrace the process for producing or enos twice just to make sure no e-mail was missing. we understand the importance of this investigation. we've gone to great lengths to spend a significant amount of money tried to make sure that there is no e-mail that is
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required that has not been produced. >> i understand you sort of backtrack come went out to 83 people in the agency that should contact with and retrieved their e-mails to try to get the e-mails? >> that's right. rather than having lost loves learned in those, we will produce 24,000 lois lerner e-mails from the timeframe in question. spent time as expected i would ask men's consent to put into the record a letter from this committee funding as chairman to then commissioner doug shulman on june 3, 2011 asking for the name, title, and divisions of any individuals who were involved in investigating taxpayer contributions to 501(c)(4)s which were sent to the irs 10 days before lois lerner's e-mail crash. without i would yield to mr. brady. >> point of information, mr. chairman spent the latter without objection is put into the record. >> was that less are committed to members of the committee?
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>> the letter was signed by me and sent to the commission of the irs. >> so we have, none of us have seen it, okay. spent you may have seen it. it's certainly been -- we can get you a copy. but i think is larger bring up a time when we got to get a complete picture of the timeline which is the e-mail crash occurred 10 days after the first letter went to the irs. mr. brady is recognized spent when we told about the problems with the lerner e-mails, february? >> i was told there was an issue with her e-mail? >> in february? >> instead were spent why did you choose to withhold that information speak was i've no intention. as i said our plan was to investigate and find out what the details were. of that what we did not know whether that been a crash that affected three meals or not. as noted -- >> you testified you gave your agency three weeks to determine if it could be retrievable or not. they were successful. so giving you the benefit of the doubt, in march you knew these
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e-mails were not available. why didn't you inform this congressional investigation them? >> as i told you, my goal was to invite determine all of the facts would give you a full report. as i noted earlier this -- >> yet, yet, you inform -- [talking over each other] spin can answer the question? >> can the witness after the question? >> regular order, mr. levin. the gentleman from texas has the time. he is questioning a properly. so please no more interruptions the regular order allows a witness to answer a question. >> review order allows the witness to conduct his questioning as he sees fit. this committee has given broad latitude to members of both parties to do that. >> chairman, parliamentary procedure spent the gentleman will state his parliamentary inquiry. >> under the rules of the house, every member has five minutes to ask compos question to the witness and the witnesses given opportunity and right to respond to is the chairman singh the
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witness does not have a right to respond to a question? >> the gentleman has had plenty of time to respond. that is not a parliamentary inquiry. spent my question is, does the witness have a right to respond? >> the gentleman has not started a parliamentary inquiry. the gentleman from texas. >> start again with a question. >> you knew in march withheld information, and in may you assure this committee that all of ms. lerner's e-mails would be provided to us, yet you knew that that was not possible spent no. in fact, i knew we would provide you all lois lerner's e-mails we had. >> you already knew in march that they were not retrievable. a., you didn't inform the congressional investigation. too much let you told to fight all the e-mails without them addition, and you knew you didn't have them. >> by march i didn't know they were not retrievable and, in fact, we received, we have
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received 24,000 -- >> mr. mcdermott -- that was the case, you knew. and enable your agency informed treasury about the problem, and treasury agreed with you that congress should be told as soon as it was able to. yet you didn't provide the information and then you assure us he would provide all the e-mails about limitation with no mention that you then you two, three months into this that they weren't retrievable. spent as noted and i think the record should make it clear, all of this issue is result of our providing you a public and fulsome document about this matter. so we've not been hiding -- >> sending a letter months after you knew the e-mails were supposedly lost, withholding information -- you were aware there was a congressional investigation, great? >> i was aware. >> so you withhold the investigation -- information. he misled congress when you said
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the e-mails would be provided. >> we have provided information and it turns out you had information for some time. >> mr. commissioner, you did not tell me under oath that you told us in february, in march, in april, in may that the information was lost. that was just what you said. tell us that again. >> february, march until april i did not know if any information was lost. >> yet your agency had already in april communicate with treasury department about the problem. in the letter we have from treasury, says we agree with the irs that it should inform congress as soon as it is able. that, that is the letter today that exactly disputes which just told us under oath. exactly disputes it. >> that letter from treasury reveals and provides you all of the lois lerner e-mails so that there is no issue that any lois
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lerner e-mail -- >> assistance at your legislative affairs, quote, treasury agreed with the irs that it should inform congress as soon as it was able. yet you did not. >> we actually provided to the information. my goal was -- >> you have not provided us any information. in fact, we didn't learn and to last week, and then this week that you have supposedly lost e-mails, not just from ms. lerner but other persons of interest. >> there's no evidence that any of us in those have been lost either. and, in fact, as i said earlier my process has been to make sure that we are all of the facts provided so that, in fact, -- >> why at this point, why should anyone believe you? the irs denied for two years targeting of america's based on their political police. that wasn't the truth but they said it was a few wrote agents
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in cincinnati. that wasn't the truth. you said you were targeting liberal organizations. that wasn't the truth. dangerous shortage would provide us all the e-mails in may, and that wasn't the truth. and today you are telling us out of thousands of irs computers, the one that lost the e-mails was the person of interest in an ongoing congressional investigation. and that is not the truth either. this is the most corrupt and deceitful irs -- [inaudible] >> mr. lewis is recognized. >> mr. commissioner, first of all, i want to thank you for your service. thank you for your patience. and i want to apologize to you for the way you have been treated this morning. i thought this was a hearing and not a trial.
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i want you to take the five minutes that i have and use it to say anything that you haven't had an opportunity to say. >> thank you. i think that between my full testimony and my oral testimony and my response to the questions, which i hope is clear, that we have not in this investigation lost in e-mail from the start of the investigation and till now. i hope it is clear that by the end of this month we will provide all of the lois lerner e-mails that we have, that those will number 67,000. it should be clear that any period of ms. lerner's hard drive crashed we have located 24,000 e-mails that lois lerner sent or received. it should be clear on the basis of the e-mail track that lois lerner was not trying to destroy e-mail. in fact, was working very hard and asked for extranet efforts to try to restore her e-mails at
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that time so it does appear to be any attempt on her part as noted to rejoice over the loss of those enough. it should be clear that when we did provide this committee with, on monday preliminary information reporting, the net result of that was a press release a row nissley making the conclusion that nicole flax in those have been lost along with others. it turns ou out on for the wco e continuing the investigation that none of the nicole flax's e-mails appear to have been lost. will provide this committee a full report on the other custodians as we complete that work. thus far incidentally demonstrated that peace in the out information about there's a possible problem simply results in press releases and angry letters to me. for my position from the start and will continue to be we will as we have continued to keep this committee fully informed of the facts as we find them, if there are situations we will investigate those and give you all of the information. i did not come out of retirement to run an agency that did not
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create transparency, responsiveness to congressional inquiries, congressional letters or otherwise. this is an important agency. and provides critical work for the government collecting 93% of the money the government uses to run more importantly it touches virtually every american. and i think it is in port for every american taxpayer to feel comfortable and confident that when they treat, deal with the irs they'll be treated fairly the matter who they are, whether they are rich, poor, republicans or democrats, whoever they voted for in the last election. to say that this is the most corrupt irs in history ignores a lot of history and seems to me again is a classic overreaction to a series problem which we are dealing with seriously. and i would just like that to be our record. i'm comfortable with it. i'm confident about it and i'm willing to stand on the record in a six-month i've been the irs commissioner. >> thank you, mr. commissioner. i yield back spent i ask unanimous consent to place into the record at june 18 letter from neil adelson counsel to the
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president as well as a june 20 letter of this year from alastair fixed-income assets and second for legislative affairs at the department of the treasury. without objection so a speed reserving my right to object spend you may reserve the right to object. >> and i will tell you why. i hope everybody will read the letter from mr. fitz and come which says it is that is the purpose of placing speed i just want to continue with -- i know and want to continue with my reservation. >> the gentleman has reserved his objection spent i wanted to you why. it says in response to your questions, irs informed treasury in 2014 that ms. velazquez to e-mail box appeared to contain very few females prior to 2011. .. -- few females prior to 2011.
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a couple years ago and misleads us and says no targeting is occurring and then it said it was a few and then it said it was also unprogressive.
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all of those things had been proven untrue. this committee sent a criminal referral of possible criminal wrongdoing just a month ago the justice department and we have heard nothing. you bury any 27 page letter to the senate asking for them to conclude the investigation that you've lost lois lerner's e-mails during the time in question because of a hard drive crash. monday our investigators asked your agency whether any other hard drives crashed and we learned six others of people investigated involved. you didn't tell us that. >> we told you on monday. we asked you. >> and what to do with that information? >> you told us monday because the ascii of any other hard drives crashed. this is unbelievable. you told us we were going to give us all of her e-mails and
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you learned in february about this crash. hispanic i didn't learn in february -- >> i'm not asking you a question i'm submitting a statement. you are the internal revenue service. you can reach into the lives of hard-working taxpayers and with a phone call and e-mail or letter you can turn their lives upside down. you ask taxpayers to hand in seven years otheseven years of l tax information in case they are ever audited and you can't keep six months worth of employee e-mails? and now that we are seeing this investigation, you don't have the e-mails, hard drives crashed. he learned about this a month ago and we had to ask you on monday. this is not being forthcoming. this is being misleading again. this is a pattern of abuse, a pattern of behavior that is not giving us any confidence that this agency is being impartial.
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i don't believe you. this is incredible. >> i have a long career. that's the first time anybody's said they don't believe me. that's fine. we can have a disagreement. i'm willing to stand on our record and remind you it wasn't buried in 27 pages. most of those exhibits when asked about the custodians we advise you -- >> being forthcoming -- being forthcoming as to say you know what, investigators -- >> let him answer the question. >> i didn't ask any question. him a question. >> yesterday. >> gentleman. i realized disrupting a hearing sort of -- >> come on. hispanic the gentleman from wisconsin -- >> i do not control the.
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if we investigate criminal wrongdoing in the targeting of people based on the political beliefs and the e-mails in question are lost because of a hard drive crash that is apparently not recoverable which of the it professionals would question and you don't tell us about it until we ask you about it, that is not being forthcoming. i yield back the balance of my time. >> the gentle man hasn't yielded back his time. >> thank you. mr. neal is recognized. >> i'm going to let you answer the question. >> mr. ryan tried to leave the impression that if we revealed the information about the hard drive crash. first i would reiterate the information about the hard drive crash is in the e-mails that you may have had for some time. second, we produced the public reports telling you about the e-mail loss on our own. it wasn't in response to a question. thirquestion. third-party alert on monday morning about the custodians.
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our staff was asked on monday afternoon if there was an indication to any hard drive problem. the next morning the committee put out a release of searching and leaping to the conclusion therefore that e-mails have been lost, particularly nicole flax. as we continue to work -- and we have more to do -- there is no evidence that her e-mails were lost. we are responding and what we are trying to do as the letter suggested is as soon as we are evil to give you a full picture, we are providing that. it's not in response to the question. question. that was in a public report and provided. you have 770,000 pages and you will have 67,000 lois lerner e-mails, $24 of the e-mails in the period that it crashed have not been lost and they will be produced to you. >> commissioner come at this point may i ask you a question and i will give you more time. there is a distinction, yes, the committee didn't know about the
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hard drive but we didn't know about the server. there is a distinction. we didn't know about the server and what came in the carbon copy of the letter that he sent to the senate, the server means they are lost forever in a hard drive crash doesn't necessarily mean that the e-mails are lost forever, so there is a significant distinction that hasn't been made yet today. >> would you like to respond? >> you may. >> that's an important questions in one of the reasons we did not immediately say we discovered a hard drive crash is because as you noted a hard drive crash does not mean that e-mails have been lost forever. and in the case of lois lerner, 24,000 of her e-mails were not lost. they've been found and they will be produced. you have 5,000 already and you have 24,005 by the end of the month. when the hard drive crashes the e-mails do not necessarily disappear. her e-mail account in any e-mails in those accounts, which
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we could find in the period, were included and did not crash. >> thank you commissioner. i must tell you based on what we've heard so far today if you came in here and say that you've agreed with everything that the republicans have suggested, then they would say we don't believe you. they have come to a conclusion, not based upon the facts, but upon what they might promote as a conspiracy. the only thing that is missing is oliver stone but there's time for that because there's an election five months from now so there will be plenty of opportunity for them to do that. having served on this committee for a long period of time, you have an individual here who has a distinguished career, who served in republican and democratic administrations, coupled with the fact he took an oath today. unless those here didn't hear him take the oath or witnessed him taking the oath, for him to take the oath and then have people suggest him don't believe you. that i isn't the way this committee has functioned in the past.
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and it off not be the way that we function going forward. now just a couple of quick questions and then i want to offer something to you. the tax investigator general has said there wasn't a cover-up; is that correct? >> that's correct. it's not a conspiracy. based on the consortium that he has made? >> that's my understanding. >> at the moment there is no smoking gun linking the administration to lois lerner sex >> that's also my understanding. >> now, i would hope that at some point, the committee might spend a hearing may be a morning talking about the success that you have had with the off shoring accounts for the individual taxpayers, but the numbers are pretty stunning in what you would be done to collect from those that have voluntarily complied in switzerland and other tax havens and it's a story that i would hope he would have an opportunity to talk about. mr. camp is correct when he says
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the tax system works on the basis of people believing that there is equity in it. and that everybody carries their burden and spending some time on offshore and spending some time on compliance by teak we got for the hearing. but i know that it doesn't fit in the determination that was me this morning for the purpose of this hearing. thank you, commissioner. >> okay mr. nunes is recognized. >> mr. commissioner in september of 2010 a letter from the chairman asking for an investigation of a political five o. one c. -- 501(c)4. >> i don't know where it would have gone. >> but assuming that it did she would have responded. >> and the agency i haven't seen the letter and i don't do what the response would have been. >> would we have that e-mail? what we have that response? >> of the response wouldn't have been by e-mail.
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but there would be a letter back to the senator. >> if the letter comes in from the senator there should be a response back. >> then there was in october of 2010, senator durbin wrote the commissioner or urging him to investigate the conservative groups specifically crossroads gps. that letter would have likely been sent to ms. lois lerner. did she ever write a staff that? >> i have no idea. >> would we have any of the e-mails associated with that? >> if she wrote back there would be a hard copy any letter in the final as to what it said. >> and during the period before the crash, the liberating groups, democracy 21 repeatedly wrote to the irs asking for an investigation of the conservative leaning groups. did lois lerner ever write an mac? >> i don't believe she wrote them back or not. >> would you have a copy of those letters?
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could we get those letters? >> if we have them they've probably already been produced. >> in june of 2011, chairman camp sent a letter asking about the abuses of the gift tax targeting. just so you know, we do have that letter. we didn't receive a response. so, the point here is that there were 83 specific employees that we asked for all of their e-mails on. you are aware of that right? >> we worked with the investigators to select the 83 that seemed the most likely to be involved in a selected range of search terms that would actually produce the e-mails that would be relevant to the investigation. >> but that was only the e-mails between the e3. for example if lois lerner send an e-mail to the secretary, that would be in those e-mails?
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>> there is no location that they would only be in the agency. the search terms were any e-mails to anyone. adjust the 83 were the accounts that were searched to see if they have 83 return to anybody else about the search terms those e-mails would be produced. >> that the secretary isn't one of 83. you're telling me if there was an e-mail from any of the 83 to the secretary that e-mail would be in the e-mail box and would have been found in the produce? >> the limitations back and forth belong the 83 it was the 83 custodians as they are called. they are e-mails, any e-mails that the search terms that were agreed to in all of them were produced whether they were to someone within the 83, outside of the 83 in the agency were outside of the agency.
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>> but do you understand mr. ryan's plaintiff in a lettee letter that he sent to the senate last week on friday, which is exactly what had happened when lois lerner planted the question in the audience way back, if this shows a pattern of abuse, then the pattern of dumping things on friday and then specifically -- i am not trying to get into a tit-for-tat with you. i'm saying why it's not believable is because you have -- the one we talked about lois lerner's hard drive which is one of the 83 that there were six additional folks in that 83 that have disappeared and you didn't tell us about it on friday. >> can i explain? >> we hoped to complete the production of all of the e-mails and complete the investigation which just started and provide a complete report. the senate finance committee indicated that they were nearing the conclusion on their report
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and they wanted an update on the letter in march to the committee and the finance that we have found that we produced all of the relevant e-mails to the investigation. we provided that letter. they also asked for an update. the reason it was produced friday rather than at the end of the month was in response to the question from the finance. at the time that we produced the report we had no information about the custodians and i have asked people to review. that information was provided to our people on monday morning who happened to be reading your stuff on monday afternoon. >> i'm under a lot of heat because i didn't know on monday and i didn't tell them on monday because i didn't know. it wasn't included in every part produced in response to the finance committee request because when the report was prepared, no one in the agency knew which any of the other custodians were involved. >> the time is involved in the -- time is a expired.
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>> lesniak might regret that this has been held -- this hearing has been conducted as less of a hearing then it might have been as an inquisition and you deserve better. you certainly are obligated to give truthful answers, and we appreciate your trying to. but these are just one thing. you have the right to try to respond to any question. if you find that you are being badgered or not given an opportunity to respond, take a breath and then try to get your answer out. if you are not given the opportunity, then recognize that again this is maybe not a hearing but an inquisition. you have the rights to mak righe the record reflects what you under oath would like to say. somewhat confused the issue that has been raised by this investigation.
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let me ask you a question. iand as added scrutiny that the irs was giving to the so-called social welfare organizations is there evidence that shows that any number of different types of organizations other than just far right or conservative organizations were being scrutinized? >> there is evidence that organizations across the spectrum were reviewed. the bold of the applications were from the conservative groups and were of conservative groups. >> but it wasn't just of conservative groups. >> that's correct. >> some would like to portray this as just targeting an attack on the conservative groups. but the evidence, which has been revealed to everyone including members of the committee is otherwise. we are watching how people try to confuse this investigation should really be about what is really wrong with the system and that is that today in america this so-called social welfare
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organization committees, these not-for-profit organizations that get special tax breaks that ordinary americans don't get and they pay less in taxes that doesn't have tax as a five o. one c. -- 501(c)4 they spent in 2012 more money than as social welfare organizations and the two political parties combined. $256 million spent by the so-called social welfare organizations to conduct political campaigns. while the two parties, which are there to conduct political campaigns spend less than the $256 million then the social welfare organizations spent. i hope at some point, commissioner, we have a chance to get into that because my understanding is that we are seeing now the seeds of this dark money that's being spent. my understanding is that there
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is an investigation by the state prosecutors in the state of wisconsin of the wisconsin governor for perhaps coordinating illegally campaign activities in ways that might not violate the law. what we are finding is that fewer and fewer of these organizations are applying for the tax-exempt status that gives a special tax treatment are doing social welfare. they are doing nothing more than campaigning. is that something that the irs is concerned about that what was to be a tax provision in the tax status reserved for the organizations that want to do social welfare is being used to conduct the campaign activity? >> our concern at this point is to try to testify on the numerous occasions to take our review of the relations governing all of the organizations to determine can we provide clarity as to what is allowable activity and the amount that you can engage in without jeopardizing your tax
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exemption and to which organization should apply. we have had over 150,000 comments on the draft regulation. we have announced that sometime probably in the early to next year we will review and we propose and ask for more comments and have a public hearing. we are not in the political business and i think what is important is to provide clarity. right now it is an unclear standard and it is hard for people running those organizations to know what is allowable and not allowable. they shouldn't operate those organizations and worry somebody is going to see the facts and circumstances change and now you are not eligible. so the goal was to have a rule that is fair to everyone, clear and easy to administer and we are going to try to do that. >> final question. you are under oath. to your knowledge are there any documents or requests for information that you have not responded to completely? >> we are responding as quickly
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as we can. we have the far-flung request documents we cannot respond to now and there is no known document request that we are not going to respond as quickly as we can. >> mr. t t. tiberry is recogniz. >> this congress and this committee have heard from a lot of different leaders who come and go and it's been quite frustrating for us and many other were constituents regarding -- and i will not rehash the concerns. but i think that every member of the committee ought to do something this weekend and maybe monday. go talk to your caseworker who deals with the irs for your constituents. get an earful from them and maybe we wouldn't be apologizing. let me tell you a story. a small businessman in my
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district paid his taxes on timee forever. forever. an automatic payment was setup in fact with his bank to pay the irs. like you have done as a businessman in the past. october last year, he found out when they actually the day that his payment was due to the irs got his account had been hacked. no fault of his own but fraud. he did what any law-abiding citizen would do. he worked with the bank, closed the account. the irs had already accessed the account but it had already been closed and he knew that. he called the irs and said my account has been hacked. a payment was made. it was made in perfectly because they closed the account. so the payment is going to bounce. i don't want to get penalized. i don't want interest. what do i do? >> thank you for letting us know. get us a check immediately. and it will all be good. it's the middle of june.
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he is being charged penalty and interest because of that fraudulent payment through no fault of his own. that is just one case ladies and gentlemen. and when these constituents have watched long before you got to the irs by the way, long before you got there has seen the irs continually delay when there is no delay on their part of the information. if they say my document got destroyed, sorry. not an excuse. there seem to be two sets of rules. and the frustration that we have is quite frankly everybody knows this has been going on for yea years. if the president would have asked me to be the commissioner of the irs and i found out in may, april, march, february was
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you found out rather than bury it in a letter on page 15 here is what i would have done. just a suggestion because of the lack of confidence the american people into this committee have because of how our constituents are treated differently than how the irs leadership treats america. i just found out this happened. it wouldn't cost to pick up the phone. the president has a phone. you probably have a phone. pick up the phone and say something very bad just happened. i don't know why. i don't think it is a cover-up and i don't think that it is, no. but because of the past and the lack of transparency in the past and because we are a really important agency that the american people need to have confidence in and the congress needs to have confidence in i just wanted you to be aware of this and we are going to try to continue to get to the bottom of
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this. when you don't do that, for what reasons i understand completely what you're saying but when we find a buried in a letter and then on monday because we ask the question not because you provided the information but because we ask the right question and there's a lot of questions we haven't figured out that we get the right answer there is a feeling that my gosh the irs has no credibility and it doesn't need to be that way. this isn't about republicans and democrats. it's about our constituents. talk to your irs caseworker. i can give you 12 more. i did i.r.s. casework. americans fear the irs. and now it is unfortunately with the pattern of delay and the disrespect and defeat in many cases there is no credibility.
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this isn't good for our country. and my hope is that you can clean this up. i have to tell you i don't even have a question for you. this is amazingly awful. it's absolutely awful. this isn't partisan. just talk to your caseworkers. thicaseworker's.this is not par. this is just americans frustrated with the arrogance of an agency that is above the law and that their opinion. i yield back. >> the first thing i did preparing for today's hearing was to talk with my caseworkers were constituents service representatives as we call them in austin and san antonio and what i found, commissioner, is when 250 irs employees spend over 120,000 hours in almost $20 million on responding to congress, those employees are not able to respond to their ordinary duties. i found for example that as far
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as the nonprofit community service organizations that the office of the cultural center that a smal is multi-area commuy foundation that wanted to raise money in a small town for the first time to support the community activities that a neighborhood community association in san antonio that the overzealous justice ministry, that a video service that covers community organizations in san antonio and tries to spread the word about their activities all of them have waited for months and in some cases over a year to try to get approval of their application to cause it would appear to be that you me that ye so busy responding to one claim after another you have no additional resources there's
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been a long-term commitment to underfund the internal revenue service and discredit it and the whole concept of progressive taxation in this country. now let me ask you as to the seriousness of the investigation have you ever been in benghazi? >> no. >> do you know if you have ever had any response ability for anything having to do with benghazi? >> no. >> how about area 51 and ross walden -- roswell new mexico into the space aliens? >> no. q-quebec have you ever had custody of the president certificate? >> no. you did is that this was a serious inquiry into the endless conspiracy theory that is being exploited solely for the political purposes. i do not approve of his lois lerner and the way that the irs handled all of these matters,
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but i think that there is a much larger cover-up issue here and it is the desire of our republican colleagues to cover up these purported social welfare organizations that don't want to disclose the secret campaign contributions they rely on to pollute our democracy. it's not surprising to me the entire revenue service would have questioned what organization paid by karl rove of texas was spending $71 million in the election cycle 2012. my concern is it doesn't appear in the public record has been a determination as to whether that was a legitimate social welfare organization are not window from today's papers and elaborate charts that anothechart that anl welfare organizations headed for
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citizens for a strong america. but that organization apparently wasn't involved in promoting the political process in the state of wisconsin. iabc that this is a serious matter. the use of the corporate secret money is a problem enough. but the determination to have that money to be taxpayer subsidized in social welfare organizations and in some cases headed by individuals who never had any interest until they could claim it for themselves to public our democracy that is a serious problem. i'm pleased you are going to be coming forward with anything else that you can find. because although this is not a serious investigation but the endless pursuit, the obsession with conspiracy and conspiracies we do need to have every bit of information every shred of information that you can find even though the people i talked
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about in texas who have legitimate issues before the irs are collateral damage in the process. but then i guess in some of his colleagues tha at the much cared about the collateral damage in other contexts anyway. i yield back i believe you are and i honest man and you took this job to improve the irs and serve the american people and so i just have a few questions. i was a cop for 33 years so i wanted over some questions. technology is confusing to all of us.
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there is an investigation currently ongoing, right? going back to the hard drive crash at lois lerner -- >> and you are fully cooperating with the office and i once chaired the intergovernmental agency of all inspectors general i'm a big supporter. you provided them all the information that they asked for in the process of the investigation into the request anrequestsand you've kept them s much as you can on all of the information that is developed on this investigation? i'm a little confused today when i learned that the ig office called our office here in our staff people here on the ways and means committee and decided that they didn't learn about the hard drive issue until the ways and means committee for doctor
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press release. how did that happen? >> vig is conducting an investigation into the avenue idea. >> the investigation they were doing as of the response to their report. they have started an investigation on issues regarding the hard drive. they were not doing an investigation. they have to learn from the press release in the ways and means committee in the united states congress they have to learn from that that there is an issue i would think if you were a part of that in helping me and assisting me in that investigation, does that not make sense to you that that would be information that you would provide the office?
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>> i just need a yes or no. >> i think that is important to continue to provide. they learned it in a press release. that is not correct. i think you want to be honest, but there's been some mistakes made and i can understand that. so let's just go through this very quickly. lois lerner sent her e-mails to the irs employees since they should probably leave not have these cases it's very dangerous we are told in a potential targeting is conducted by the rogue employees in ohio. we request all of the e-mails. the internal review then we find
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out the e-mails are destroyed and now we find out the hard drive is destroyed. mr. koskinen, the american people don't believe this you wouldn't accept that i'm supervisor i lost my e-mails or my hard drive. what would you do? my time, thank you. regular order.
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>> if i destroyed it id straight my hard drive. if i found the investigative contemporaneous information from three years earlier that he affect worked very hard to restore his hard drive you've got the best experts to conduct the e-mail and that had failed tiwould tend to believe it. the other hard drives used it to? one of the ones on monday turned out to have not caused the loss of a single e-mail. they do not cause the e-mail to be destroyed. we will make sure that we get it to you. >> now mr. thompson. >> thank you for being here. i too want to thank you for your public service and your distinguished career. and i don't want to apologize to the irs, but i do want to apologize to you.
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there are things that we can offer both sides of the aisle agree to. i think that we are all pretty upset if in fact there was any inappropriate behavior on the part of the irs come and i think most of us in previous hearings have expressed that. i don't care if you are a democrat -- actually i do care if you are democrat or republicarepublican doesn't matf you're a democrat or republican or conservative or liberal, you should receive equal into transparent treatment from the irs and if there's an there is y targeting done, it was absolutely inexcusable. i think we are all at the least disappointed that ms. lois lerner took the test and i think that they helped create a lot of the political nonsense that we
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are seeing playing out today. i wish that would have gone smoother and we could have gotten to the bottom of some of these problems from the start. and i certainly hope give that f these hearings we are having worked race to to have before te other committee has there's an all of the effort that's gone into this has really been a distraction from us being able to address a lot of the problems that are important to the american people the highway repair transportation if we could just take a little bit of this time maybe we could get some of the issues that would help put america back to work. and i think that all of us experienced the same situation as my friend from ohio. we all can tell stories about constituent problems with not just the irs but with anything
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given that you're here to tell you i personally have been trying for weeks to get an appointment in my district with the irs over a constituent matter of a small businessman in my district has been dealing with for a couple of years and it's all based on a bill dealing with conservation easements, so if you have any influence on your california office please ask them to return my call. i would like to deal with that. but the thing i found that it is really in my interest today in addition to getting this thing cleaned up and down with. it's misplaced and not knowing where they are or what the process for dealing with it is a. in number of years ago because of the legislation that i have
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carried dealing with electronic waste we found out not through our own resources through press reports that a number of hard drives from our intelligence committee and from the department of defense were found in third world countries and that was a terrible breach that caused me to amen amend our intelligencamend orintelligencer intelligence bills and probably everybody here who was there then. we had the same security problems with hardware and software in your agency and i would like to know if you think that's something we should try to collaborate on to protect the
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records of the public as they are stored in your equipment. >> it is important. it goes to recycle and as you stride rather than put in the waste dump were sent out somewhere else. >> i would be happy to share with you the approach that we took if you think that might help. in the remainder of my time i know that you had some things you were trying to say to my last copy and let us know if there are issues. i spent a significant amount of time visiting 25 largest offices across the country to let me know if there is an issue and to
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give us their best insight to the advice and suggestions on how to improve our operations. i'm particularly concerned and we are working on the backlog in the organizations and while we are doing our best to work that down so that your constituents actually get an appropriate and prompt answer to the replications i was angry when we learned what happened to lois lerner's hard drive and all the news that's broken since then and i'm even angrier today about this and it's interesting we sent a letter to secretary lew on monday we got the documents before this committee convened its hearing it's just amazing that the white house or the treasury can respond that quickly she had two computers
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write a laptop and a desktop quick >> right. >> which hard drive failed to close the laptowas the laptop oe computer. >> how do you even know where she's archived or do you know where she's archived to key documents from the timeframe that we are interested in? >> the timeframe you're interested in everyone archives their documents on their hard drive in the office because that's where most of the work is done and they want to be reached readable. >> can you attest that all of the documents and the memos from the targeting are produced you have these i cannot attest any e-mail was lost i have not talked to her and this is all
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information being developed as we talk. >> my understanding is no e-mail of hers has been lost as a result of her hard drive crash. we just got the list on monday ourselves and we've been pursuing this and we will in fact give you a full report on all of the custodians now it doesn't count. >> so we don't know where those hard drives are right now. >> we don't know where those are. it's unbelievable you don't have that information it then weeks since this information was made public to us. >> we advise you in the committee on monday that this is all that we have is the names. we are actually working through and review to find out what is the status of those and how many e-mails are lost and we will know where the hard drives are.
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we will give you that information as we have it. >> then we get asked what is the answer to this and we don't know the answer. so we can expect this in a timely manner. i can get yo give you all of the information. >> she was advised as i noted in the summer of 2011 that the kernel investigation division had been unable to retrieve any e-mails with her hard drive and was recyclable by what date to the date. >> it took this long for the committee to find the information in the letter that we received on friday. >> there were e-mails that actually last fall in the productions that referenced the
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crashes and no one was paying attention to because they were looking at all of the relevant information as we proceeded through it wasn't until april that was a crash and it wasn't until mid-may that we actually found the issue to determine how many e-mails were available. >> that's why it was into this committee notified and the decision was made to completely recycled the hard drive. >> that would have been made three years ago. none of us had anything to do with the investigation. it was -- >> i would submit it does have to do with the investigation. you might be able to shed some light as to why we were not notified and it disturbs me that this decision was made internally without any kind of outside consultation on this committee was vigorously pursuing information regarding the targeting.
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>> i would like to make the record very clear that decision about the hard drive was made three years ago and there has been no decision made since this investigation started and certainly since i started to have anything destroyed. any e-mail, any hard drive people are using now is after the crash is now in the possession of the eiji. any of the decisions that are made we need to be notified. this committee needs to be notified prior to any decisions made about the disposition of those hard drives. >> we will be going to-1. >> thank you mr. chairman. commissioner, i'm going to make an observation. it will sound condescending and i don't mean it to be. go deep into the meeting of time communicating. growing up my father told me make good choices and we kind of have a running joke when my kids go out of the door in the
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morning were particularly in the evening to make th good choices. i think that you made a bad choice and it wasn't based on that motivation. i think the administration came to use singularly as a person as a white knight. as someone with a sterling reputation, someone who has had experience turning around bad organizations. and i think that the administration is trading on your representation. so i think you've made a bad choice. you are in it now that the decision to accept this responsibility as the irs commissioner in defending this administration was a bad choice and i will make a prediction that you're not the commissioner of the irs anymore and it will go out to someone else because now you are the third person. and i would ask you to respond to that but it is an observation and i mean no condescension so here is the point you're been
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characterized by the other side as a victim. the irs as a victim is so richly ironic you can hardly believe it. so you're not a victim today. the irs isn't a victim today and here's the fundamental problem. the chairman sent a letter on this whole issue and then ten days leader. think about the duration of the ten days. ten days is the ability to panic as the irs, reflect, plan, talk and execute. and there was a crash. ten days after the chairman's letter. now i have a slide. that is a fire and inside that fire is a hard drive. i have another slide. that's the hard drive after it
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was burned and you know what, commissioner do you know what was recoverable from that column hundred% of the data. so the notion that a hard drive or a server in the midst of this entire situation has been lost into oblivion and is the case even a white knight can't make. >> can i make a comment? >> he has yielded that his time. >> can i ask unanimous consent that lois lerner's drive was thrown into a fire and 100% was recoverable because that is ridiculous. >> there isn't a question pending for the witness. i object. you are recognized and you may use your time as you see fit.
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thank you for appearing. you are not going to be doing this forever. i'm surprised anybody takes this job based on the treatment that has been accorded to people that have better things to do with their lives and had credible careers and a stepped into difficult circumstances. thank you. i appreciate it. i appreciate the fact that you are managing or attempting to housing the employees. you have a budget of almost $11 billion. and i appreciate that you are doing this with a workforce since i've been in a congress that shrunk 25,000 employees. 10,000 in the last four years.
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but the budget in its wisdom my republican colleagues are cutting your budget. the training budget went to $172 million to $22 million. from the tax code that we consistently make more complex and often times we don't get our jobs done in time so that your employees can do their job and somehow we are covering you and some of this does sound condescending i will say not allowing you to answer questions for the situation that the congress has made worse and is systematically assaulted the irs in its capacity to function. what did you do in the government shutdown? with business furloughs its
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accounts receivables department? not one that stays in business very long. with the layers of complexity and the vast system where people pound away on the irs for the people that work there. i appreciate that they do and certain irony is now in the republican party to assault the irs and return and undercut its ability to function. in its owand its own republican presidents starting with linco
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lincoln. i appreciate the hard work and being able to tease out this and i appreciate my friend mr. doggett's reference to the manner of things that have been relayed at your doorstep. like the training and like people on the job to not have the budget cuts that we are told by the tax advocates of the budget cut of 1 dollar costs the federal government seven. and undercutting the enforcement which every dollar is over $250 that's returned to the taxpayers for veteran services and for environmental protection. i'm sorry. i'm taking more time than i wanted. i would like to turn you to get an unfettered minute or two if there is something that you would like to say.
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>> thank you very much. >> and i would conclude with my thanks for your being here. >> with regards to bad choices i'm sorry the congressman has left. i have noted that when people ask why i took this job perhaps i need counseling. we have 90,000 dedicated employees that i talked to and listened to 10,000 of them. there is one point i want to come out from this to refute the suggestion in the next six to 12 months i'm going to fade away. i am firmly committed by will wl serve the remaining three and a half years of my term, come whatever it may be. and i think it's important for those employees dedicated as they are to the mission of this agency to have confidence that they are a leader and the irs isn't going to cut and run and decided to send a bad choice to take this job and it's delighted to be working with them and i look forward to the next three and a half years of my term during that. i would also like to note and
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reference again but somehow it is unbelievably lost the hard drive now is unbelievable because it wasn't lost now. it wasn't destroyed. that was a decision made three years ago before any of these investigations started. there should be no implication that anything has been the story or tampered with since this investigation started and certainly since i became the commissioner. >> the time is expired. >> thank you mr. chairman. commissioner, on the numerous occasions as well as on a first page of your written testimony that he presented to the committee, you cite murderous statistics of the amount of e-mails and other indications the irs produced with this committee and certainly for the senate finance committee but frankly all of these statistics are relevant if the effort doesn't get us to the full truth and certainly all of the statistics are minuscule to when compared to the constitutional rights of the average citizens that have been trampled on and
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is guided by lois lerner and others within the irs. the scope of the investigation into the work that was conducted by lois lerner and others and i would like to ask you based upon your understanding of all of that what do you think that lois lerner did wrong word inappropriately in the healing of her duties while she was in charge of the tax-exempt organizations in the application review process. >> in the past we had a lot of investigations going on. i think it is clear to the extent the ig found inappropriate. was used to select applications for the further review to the extent that applicants were required or requested to provide the voluminous improper information that was a mistake. it shouldn't have happened and we should do everything we can to make sure it doesn't happen
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again. the ig made recommendations of what should be done but accepted all of those and we are implementing all of those and providing appropriate training and safeguards because as i said earlier, i think it is critical for every american th american t their political beliefs, whether they go to church or don't go to church, whatever they went to last week it should be confident. if they hear from us is because of something in their return. and if they said something in the return that looked like that they would hear from us again and i think that is critical as a commitment that we have made. >> so you are basing that on the report in the investigation that you just said you didn't do your own investigation. i think however that if i were to become the head of an agency like the irs, i would want to conduct an internal investigation of my own agency to understand fully what happens. so i knew what happened because i am in charge of that agency. do you have any plans to do your own internal investigation of this activity? >> when i arrived it was clear
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with the investigations going on to the last thing i wanted to do was appear to be interfering in those investigations into talking to any of the potential witnesses in the second michael continues to be with the investigations and the amount of time going on what i'm looking forward to his being educated by the reports of those committees. you have all spent more and more time i have an agency to run. >> so you're not going to do your own. >> i'm looking forward to your facts in your recommendations. we will take those recommendations. >> it will be everybody's fact. >> let me ask you this in the time that we have. the tax-exempt government decision they announced the irs will restart the audit of the 501(c)4 investigations during the target ended due to political activity they were suspended after the acting commissioner expressed concerns that there may have been tainted by the targeting. the committee found evidence that lois lerner's bypass internal controls as you just indicated and reached into the
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right-leaning group for the audit. getting these concerns and the evidence that she influenced the office selection of these groups why would the irs use these audits? i think it is unfair for them to leave it in limbo that they deserve to have closure. we've made it clear. >> why not just provide the answer without auditing the process? >> we have noted that -- >> any request for the information they don't have to respond to the normal follow-up and we want to close the investigations of those organizations are not left in limbo and are not able to function and we should not leave them on there and we ought to appropriately review them and most of these cases we should do that. >> doctor price. >> commissioner, i want to also thank you for your service.
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there is a notion that we decided to appreciate what the public servants do come and we do. but this is serious stuff. .. not just target those organizations that are vacant donor lists and share them with other groups are those individuals of those donor list audited at are degree higher. that is chilling stuff. that is the sense that many of us who have. respect, the
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comments that we have heard today, the processes that she gone through have not begun to rebuild that trust. you said benji ongoing and continuous. isn't it true that our friends who draw the conclusion of innocents is likely premature. is that not true? ture, is that not correct? >> are not sure who's i innocent you're worried about. i would like to note that the statistics we shared with this committee and happy to continue to work with you do not show that any donors were audited at a higher rate than people in the public generally. if they were it was a mistake but there's no evidence there was a systematic attempt. >> it's clear that the individuals -- and anecdotally there's no doubt about it, but the statistics will show that folks who donated to these groups were audited at a high rate. i want to get to a couple of specific questions. you said you learned about the
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crash of this hard drive in february of this year? >> i don't there was a potential problem in february. we did not know and i was not advised there had been a crush in may when her i.t. people discovered it and it wasn't until the end of may we understood there were able to complete the investigation of what the revocations were, how many enough still existed and then started the investigation of how many other -- >> winless treasury informed? >> i don't know. i did not -- >> they had to have been informed by the irs the? >> my understanding is that sometime by mid-april any conversation between council, council of treasury their advice there was a problem with the lois lerner's e-mails and that -- >> the irs council that inform the treasury? >> that's my understanding. they were advised we were investigating. >> secretary lew is refused today to provide a mouse as relates to lois lerner and other items to this committee. don't you think would be
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appropriate given, or maybe his computer crashed. didn't know if secretary lose crash -- computers has crashed, do you? >> my understanding, i haven't seen any of these documents. >> do you think it would be appropriate -- >> treasury department has provide all of their lowest learner e-mails. >> we have not reviewed them yet. >> none of us had had a chance to review those but that's my understanding. >> if there are any from lois lerner and secretary lew you will have those. >> to know if lois lerner headed back to larry -- a blackberry or an eiffel? >> i don't know spend i do not know. >> do employees of the irs kerry mobile devices issued by the government? >> the kerry mobile devices. the mobile devices running same e-mail system. people do not have on their office blackberries. if they have them or whatever mobile devices they have, ma they all run against the same e-mail account. >> can you find out if lois lerner had an iphone or a
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blackberry? >> i'd be happy to let you know. >> there's a notion on the other side this is the artist is scrapped ashman strapped for money. can't do a doggone thing goes to the money. you are aware the irs has a studio that produced the famous star trek video that spent $5 million annually on the studio, are you not? >> no longer, the studio has been closed. we now have a review board and produce very dubious and they're not done in the fancy studio. that was all four years ago. since then our budget has been cut by $850 million. >> i arisen please use 521,000 hours in fiscal year 2013 at a rate of about $23.5 million for union activity, are you not? >> that's right. that's consistent. across rugged entrance of union voice and all federal agencies have a right to spend some portion of their time on official business for the kenya. the irs has a union and those employees pursuant to the process do spend time on union
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time. >> might be appropriate for them to spend time on something other than that. thank you, mr. chair been spent as long as -- >> time has expired. >> thank you, mr. chairman. mr. commissioner, i want to thank you for your incredible patience and your testimony here today. mr. commissioner, what you are seeing is an expected reaction from an overzealous committee that is so desperate to find any type of evidence in any type of fact that may point to a cover-up that does not exist. point to a conspiracy that does not exist and have instead chosen to go after a public servant who by all accounts is a model of integrity, honesty and professionalism. i think you are the right person, the right place at the right time to turn around a troubled agency. this committee and this congress should be working with you.
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mr. chairman, i also want to ask unanimous consent to get to articles inserted in today's record, one dated july 20, 2011, "new york times" article that's titled three groups denied break by irs are named. and another one by the center for public integrity titled irs liberal group to political or social welfare status. >> without objections ordered. >> the reason i want those answers today is to point out the extreme irony of this investigation. the only organization that were applying for 501(c)(4) status with the irs that was denied the application were organizations that were affiliated with democratic candidates for office. not conservative organizations. in the case of the three groups that were denied status they were emerging about it, emerge me, emerge messages that only supported democratic candidates for almost 30 of the article it was subtitle is agency rejects tax-exempt application of a
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pro-blanche lincoln arkansas to commonsense. they were denied application because they reviewed its two political. and there's no evidence at all the rsa denied any conservative group applying for (c)(4) status during the entire course of this investigation. so the state raged across from the other side is just that. going after an irs because of political fodder there brings to the base and it's unfortunate that we're having to conduct yet another witchhunt here today. mr. commissioner, let me ask you some quick questions with many time to guess you are under oath and we want to make this explicitly clear with your testimony. to your knowledge, has anyone at the irs to liberally withheld in e-mails requested by this committee? >> no. >> has anyone had irs withheld any information specifically requested by this committee? >> no, no. i wouldn't we have a produce all the information we have because it's luminous but we have
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withheld no information. >> any attempt with an irs to to destroy any evidence to your knowledge of? >> no attempt by anyone during the course of this investigation to destroy any evidence. as noted in the past e-mails were retained for six months. >> to your knowledge has been any attempt to data with any evidence or information requested by this committee? >> no,. >> since you been acting commission have you seen any evidence of any attempt to cover up information pertinent to this committee's investigation of? >> no. >> what about any information requested by the other investigations? i think you testified to six investigations that are still pending with the irs. >> were providing the same information to all investigators. the tax writing committees get unredacted information to the non-tax writing committees get redacted information so they have about 170,000 pages fewer than information in this committee and senate finance. >> have you seen any evidence of
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any direct involvement by the white house in the screening of (c)(4) applications that are the subject and evolve in this investigation? >> i have seen none. >> has been any evidence of any white house involvement in the irs is responses to the information requested by this committee? >> i have seen none. >> could you just give us a quick status update on the computer system at the irs, that you encountered when you took over as commissioner of? >> our computer system as i said is somewhat antiquated. we've been updating as much as we can. as noted we have about a billion dollar infrastructure as a result of the budget constraint. we are spinning minimal amounts on that as i noted. we still can get all of the employers on the window seven. i heard a reference earlier someone going to windows 10. we should be so fortunate to get everyone on window seven. we are constrained. our budget has been significantly underfunded on a declining basis on the less for
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your. >> in regards to what we can do to assist the irs, and updated more modern functioning computer system, what would that be? >> we have given you the president's budget would allow us to continue to make progress in that regard. we have at this .4 to $500 million of modernization and improvement activity that we would undertake. >> thank you. >> mr. smith's. >> thank you, mr. chairman. and/or witness here for your time today, thank you. i realize i think we have a large issue. i know it's been dismissed as an overzealous reach of the committee or a conspiracy similar to various others over history. political theater. i think you agree that this is a serious issue and i think that moving forward i would ask for full cooperation. it's been frustrating with the various responses that have been offered over the last i think
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13, 14 months now. you mentioned contemporary documentation. could you expound on that? i've an idea what that is but i would like you -- >> i'm sorry speak with contemporaneous documentation that you referenced earlier. spent hours talking about, if you wouldn't mind, in the middle of this to our glasgow giants at about what we knew when. as i know to -- >> time is limited. if you would answer my question. >> contemporaneous means that the e-mail traffic that we found in our search about the crash was e-mail traffic at the time of the crash in the time of attempted restoration three years ago. >> okay. and various documentation is recommended by the irs with tax filers, documentation is required to be retained how long? >> generally come as a general matter people are subject to audit for three years unless there's criminal activity and then we can go back actually in
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some cases a limited amount but as a general matter unless you're a willful evader, we limit our audit to three years. >> now, shifting gears just a bit here. when you look at the size of the irs, 90,000 people, that we reminded $2.4 trillion revenue, many would say that the core of power in washington, d.c. is the tax code, 10,000 pages in length, various other descriptions, and it was noted earlier that a budget cut of 1 dollar in the operating costs of the irs results in costing revenues $7. would you agree with that assessment? >> could i what? >> that a 1 dollar budget cut would result in a $7 cost to reverend? >> it depends on who you ask of two of its four, six, $8 a dollar. but it's clear as i said, if
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with a greasy question 500 knowing that we were denied we were provided back over $2 billion of revenue. so we do provide, we collect in our personal activities over four or five times the entire budget of the agency. >> obviously there are many opinions here, and i have to tell you that given the complexity of the tax code, and i think that's the main reason why we're trying to reform the tax code to come up with a simpler approach. my question -- i question how possible it is to either these issues out, that some dismissed, others find very serious. and i would hope that we could have the full cooperation as we do move forward. i would hope that you agree that this is not a finished case. would you agree with that? >> no. and where inches and delighted to operate. i think it's important for the record without a good relationship with your staff and we have followed leads they wanted us to follow and it's
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been a productive and we continued to help to do that and we will be as responsive as we can to requests of the committee. i think it's important for us to do that. >> well, thank you i certainly hope we can continue to get this result. resolved. i know there are various characterizations here. it's disappointing that some have dismissed the situation today. i hope we can move forward. thank you. >> thank you. >> thank you, mr. chairman. mr. koskinen, i will go down the same length down the same unquestioned but if you want to highlight in a sample of a case in my district as well, small businessperson who went out on -- in minnesota, this individual small businessperson at the company have been involved and subject to for different irs audits over the past 10 years. most, the most recent is still going on. so for each of these audits has resulted in minimal or zero, zero changes to the compass income tax returns. the most recent audit is going
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on right now, has been going on for 18 months. the cost to the company about $110,000. it's an audit that is done to help train iraq's employees, ironically at the cost of the company. the agency is asked the company to produce an inordinate amount of information even requesting a receipt or a $10 cab fare that occurred months ago. i'm curious, commissioner, if the company came forward tomorrow and said this information has been lost, $10 cab fare, we cannot find it, similar to the hard drives being undiscoverable, you would understand that, right? >> yes. >> you would understand that and you would hold him accountable. they would have to produce that record? >> i'm not an exam agent but if as in this case he said i don't have the receipt but i can, by other information, demonstrate pretty close to $10 is what i spent, that would be allowed just as our providing 24,000
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low-slung in those from the time of the crash. >> if they had a system of hard drive crashes that went forward and taking for and said there's nothing we can do, the servers are down, the hard drives argonne, we can retrieve the data, which ended the audit? >> as i say i'm not an exam auditor expert. i can tell you that trying to become compliant whether individuals or businesses we rejected him and trying and anxious to work with taxpayers trying to become a part. the ones we consider of the people willingly and consciously avoiding taxes especially those offshore. i'm happy to chase the end of the art and throw in jail but the people trying to become compliant we reach out to into the best we can do in fact work with them. >> this is following on the same situation mr. deberry identified with individual cases in the district but our constituents look to the irs for impartial judgment and understand but let me ask you, if an employee at the irs has a computer problem
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i,is there way to track when the employee called regarding the computer problem? >> yes. there are tickets which is how we actually in favor discovered that there had been a computer crash. i misspoke the last questioner i said we didn't about the crash until the end of april. we do know about the ramifications of the crash assess it in my organist testament. it was the ticket in fact information from i.t. that said there was a crash which caused us to then take the time to figure out what to get me come after e-mails been lost. that's when we been discovered in the production of e-mails the track of the e-mails that confirm that, in fact, there had been a crash, there been a significant ever try to deliver the most. >> with the ticket with the irs be able to track with the issue was that was being have a? >> i don't know the details of the ticket are but i know from the correspondence in e-mails that it was a hard drive crash and from some of ms. lerner's e-mails that she was unable to get to her e-mails. >> could you check based on the
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ticket who handled that particular id issue and how it was resolved, tracking mechanism within the irs of? >> i don't know what the ticket would show but we'll be happy to make sure you have the ticket and any information related. >> can you tell me who at the irs in the i.t. area handled ms. lerner's computer crashed issued in 2011? >> yes. it was a front-line, corresponds with within a front-line i.t. manager. what was not ordinary was when it could be retrieved by the normal i.t. experts to have scented expert at the criminal investigation division which was an additional step taken -- >> could you tell me what caused the crash itself? >> i do not know what caused the crash. in fact, my understanding, computers, three to 5% of them crashed as a general industry standard and there's no way to know why. >> can you rule out what you know are based on these tickets can you le


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