H.R. 2347, H.R. 5366, H.R. 5334, H.R. 7971, H.R. 7959
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House Ways and Means U.S. House of Representatives
Follow its sittingsSpeaker 1
The last bill from the chair and ranking member of our tax subcommittee, representatives Kelly and Thompson, strengthens the IRS whistleblower program. Whistleblowers serve an important role in identifying tax evasion that undermines the integrity of our tax code. Improving whistleblower protections, ensuring fair judicial review, and incentivizing timely program administration will go a long way in combating fraud, something that has been a key priority of this committee. I wanna thank my colleagues on both sides of the aisle for introducing these taxpayer-first policies on behalf of the people you represent and the millions of Americans who will benefit from them. I'm now pleased to recognize the ranking member from Massachusetts, Mr. Neal, for his opening statement.
Speaker 2
Thank you, Mr. Chairman. It's been more than a year of the Republican trifecta in Washington, and people are still left wondering when Republicans will finally come to the table ready to achieve something that might make the lives of the American people a bit more affordable and indeed better. Once promising relief, no new wars, and a stronger economy along with low tariffs, the president has delivered the exact opposite. Soaring costs, growing conflicts abroad without congressional assent, and an economy increasingly unsteady and further out of reach for working families. On the Republican watch, gas is now nearing $4 a gallon, up 34% in just a month.
Coffee has turned into a luxury item, with prices surging 26%, and Americans wanting to treat their families to a steak tonight can add 13% to the bill because of the president's economic policies. Yet instead of tackling the costs that they've driven up, they're once again filling the house floor with busy work. Or as President Trump has said, he is the president and speaker of the House. What's being marked up today won't bring down costs or unlock opportunity, and any impact of this legislation starts with some risk of an ongoing rampage against taxpayer services. We understand and support the merit of the legislation in front of us this morning, but also understand the following.
The American people are on a functional, transparent IRS that administers tax policy diligently and fairly. But in order to achieve that, the IRS needs to be adequately staffed, funded, and supported, set up to succeed, and to uphold the law. A reminder, the request for expenditure increases at the IRS came from a Republican IRS commissioner who asked for the additional money. That was not a made-up policy that Democrats invented. We understand, and that's why when we're in charge, we want, when we were in charge, we made investments that lowered wait times, saved people money, collected billions in owed taxes from evaders, and better positioned the IRS for the future.
Unfortunately, our colleagues in the Trump administration seem not to share that vision. Their purge of dedicated workers, 25% cutback in IRS employees, those who process tax returns and answer customer service lines, is leading to delays, service interruptions, and indeed more headaches. Added bureaucracy by the president is currently holding the tax refunds of 1,400,000 taxpayers currently hostage. Our colleagues' failure to act is costing families money at a time when letting the ultra rich off the hook. This is where our attention should be focused.
The president's willingness to extend his campaign political retribution to families in need undermines any effort to expand disaster relief today. Earlier this week, Politico reported that under president Trump, states with democratic governors only had their disaster funding requests approved 23% of the time. That defies what is known as the national principle. It is part of the glue that holds this nation together. For states with Republican governors, that number nearly quadruples to 89%.
Would Republicans like to put anything on the table that ensures that the president can't choose favorites when it comes to who gets help when their homes burn to the ground? The people deserve more than cosmetic fixes that are not interested in changing the course. They need policies that will reverse the president's harm and make their lives easier and fairer. Republican records, it's indeed been carefully etched, but not satisfactorily so. The people are reminded of it every time they go to the check out line, they look at a medical bill, they fill up their gas tank, or indeed even going to the airport.
More of the same failed playbook is not going to fix that. Democrats are the ones in Washington that are fighting for a different path that brings fairness back, ends the cruelty from the administration, and delivers sustained relief for working families. With that, Mr. Chairman, I yield back my time.
Speaker 1
Our first order of business is HR 2347, the Survivor Justice Tax Prevention Act introduced by Representative Smucker and Gwen Moore, which would ensure damages received by sexual assault survivors are exempt from taxation without having to provide medical records to the IRS. I appreciate representative Schmucker and representative Moore for continuing to be champions for survivors, survivors of sexual assault. Their bipartisan leadership and their true compassion for these victims shine through in this effort. I urge my colleagues to support this bill, and I'm pleased to recognize the gentleman from Pennsylvania, mister Smucker, for his opening statement.
Speaker 4
Thank you, Mr. Chairman. I really appreciate you bringing up this important bill for individuals who have been harmed by sexual assault. This corrects a provision in the law that can treat physical injury differently from sexual assault injury. Under current law, damages and settlement income received due to either are exempt from federal income tax. But the IRS requirement that taxpayers provide proof of visible physical injury to receive the tax exempt treatment.
That's generally straightforward in a traditional physical personal injury case, but it can be considerably burdensome to prove that it's hard to meet that for victims of sexual assault who often haven't sustained observable injuries. So this requirement by the IRS has resulted in inconsistent tax treatment for victims of essentially the same crime. This bill, the Survivor Justice Tax Prevention Act, resolves the inconsistency. It clarifies that compensation received by sexual assault victims is not taxed regardless of proof of physical injury. It provides victims of sexual assault greater tax certainty without forcing them to fight with the IRS and relive the trauma of their case.
And so I wanna thank Congresswoman Moore for her partnership in this really important bill. And, again, I thank the chairman for bringing this bill up today, and I urge my colleagues to support this important legislation. Thank you, Mr. Chairman. I yield back.
Speaker 2
Thank you. And with that, mister chairman, let me yield my time to our distinguished colleague from Wisconsin, Miss Moore.
Speaker 5
Thank you so much for yielding, Ranking Member Neil. And I wanna thank Chairman Smith for your support in bringing the Survivor Justice Tax Prevention Act before us today for consideration. And I absolutely wanna thank Representative Smucker for working with me. It's been a long time coming as we've worked on this bill to support survivors of sexual abuse and ensure that any settlement award received on account of sexual abuse is not subject to federal taxation. When I've talked about this bill in public, strangers were alarmed at the disparity and inequitable treatment of sexual abuse victims.
And so it's been a long time coming, but here we are today. Currently, settlement payments made on account of personal physical injuries or physical sickness are excludable from gross income. Yet, many survivors face challenges proving that sexual assault resulted in physical injuries because they don't have evidence of, quote, unquote, observable bodily harm, and have been denied tax exemption. At the core of it all, this bill is about fairness, dignity, and justice for survivors. The Survivor Justice Tax Prevention Act redresses this situation by separately enumerating harms caused by sexual abuse, ensuring that survivors do not have to be retraumatized by proving so-called observable bodily harm.
This bill recognizes that the harm is real and lasting, even when it's not visible. That's why this representative Smucker and I have drafted this bill to make it explicit. No survivor should be asked to relive their trauma or produce deeply personal records to be treated fairly under the law. We also make it clear that when a judgment or settlement includes an admission that damages are on account of sexual abuse, then that written agreement should be sufficient evidence to benefit from the tax exemption. If the IRS has reason to doubt the legitimacy of the facts underlying the agreement, then they can challenge it.
But the presumption must be that the admission is valid. Of course, sometimes settlements aren't explicit that they are on a column of sexual abuse. Someone might, say, pay a premium, for example, to maintain that silence. Even in those situations, a survivor should be able to benefit from the tax exemption and should not face undue hurdles proving that to the IRS. That's why our belts and suspenders approach is so important.
We hear in the news about high-profile civil cases involving sexual abuse. I'm thinking about the accounts of trusted gymnasts, physicians abusing athletes, and the victims of Jeffrey Epstein and many of his associates. But let's be clear about it. We need to acknowledge that abuse just isn't in the headlines, because for every case we hear about, there are countless others that remain unseen. Every time a survivor comes forward, it takes extraordinary courage in the face of personal risk, scrutiny, and cost.
And I urge my colleagues to support this effort to make the tax code better serve all survivors who receive settlements after prevailing against their abusers, by not saddling them with a tax bill or having to fight the IRS. Before I yield, I would like to insert into the record, without objection, records and letters of support from the American Association of Settlement Consultants, the Victims' Rights Law Center, the Taxpayer Protection Alliance, Futures Without Violence, the Athlete Survivors Assist, Legal Momentum, the Women's Legal Defense and Education Fund.
Speaker 5
And thank you, mister chairman. And I am hoping that we will pass this bill today and take it to the floor. And with that, I would yield back all 11 seconds of my time.
Speaker 1
Thank you for the 11 seconds, miss Moore. The committee will now proceed to consideration of HR 2347, the survivor justice tax prevention act. Without objection, the measure will be considered as read and open for amendment at any point. At this time, I offer an amendment in the nature of a substitute, which was distributed in advance, along with a green sheet explaining it. Without objection, the amendment in the nature of a substitute shall be considered as read, open for amendment at any point, and considered the base text for purpose of amendment.
I will now turn to Tom Barthol, chief of staff for the joint committee on taxation, to provide a technical description of the amendment and the nature of a substitute, with an emphasis on the changes made since introduction. I ask that members hold their questions until after the presentation.
Speaker 6
Mister chairman, the committee members have before them two joint committee documents, JCX 4, which describes the underlying legislation, and JCX 10, the green sheet that describes the chairman's amendment, nature of a substitute. As Mr. Smucker and Miss Moore noted, present law provides an exclusion from income for damages awarded for physical injury or sickness. The chairman's amendment, the nature of a substitute, explicitly adds damages for sexual acts or sexual contact as so defined regardless of whether there are medical records or observable injuries related to those sexual acts or sexual contact. In addition, the chairman's amendment, the nature of substitute, provides that no inference should be drawn as to whether the physical injury or sickness provision under present law requires evidence from medical records or observable injuries. Further, the amendment, the nature of substitute, provides that if a decision or agreement states that damages being paid to a victim are attributable to a sexual act or sexual contact, that statement suffices to shift the burden of proof in any court proceeding to the Secretary of the Treasury should he or she wish to challenge the exclusion.
This provision would be effective for decisions or agreements after the date of enactment, and the staff of the joint committee has estimated this would result in a revenue loss of $89,000,000 over the budget period fiscal years 2026 through 2036. That concludes my brief description. Be happy to answer any questions that the members might have.
Speaker 1
Thank you. Are there any technical questions about the amendment and the nature of the substitute? Seeing none, we will move to strike the last word. Does any member wish to strike the last word?
Speaker 8
Well, thank you, mister chairman, and let me congratulate our colleagues. I think this is an outstanding piece of legislation, and it's always heartening to see the committee working on a bipartisan basis on issues that we know should come before the American people. And I wanna commend both of our colleagues, but I would, chairman, like to submit for the record as well the Center of Budget and Policy Priorities. It's in an article entitled Trump administration personnel policies, harming social security customer service and risk lasting damage. SSA now has fewer senior career leaders and fewer early career staff than at any point in the last two decades.
I bring that up, mister chairman, because as important as this bipartisan work is that we're doing, it's also important that this committee follow through on what we heard the Social Security administrator say the other day, that they couldn't answer our questions, and haven't been before this committee. And we've had two whistleblower reports now from the Trump administration about the data and information that has been compromised. And every member of this committee in your home district, all of the personal data and information of your constituents has been gone through with the stated intent, one of being distributed to an outside group so they can use to alter elections, and the other to hold to use for profit in data mining. We will continue to ask for what should be a bipartisan effort to bring before this the oldest continuous committee in Congress. If we cannot set the standard for by what since when is Social Security, then a, you know, a concept that we can't have bipartisan agreement on individuals looking at your constituents' personal data, selling it for profit, and mining it.
This is absolutely wrong. And I know my colleagues on the other side understand this. And you also know that I will not stop talking about this until we get the individuals before us under oath testifying before this committee on what has happened to every one of our constituents' data, over 300,000,000 Americans impacted by this, and the Ways and Means Committee and the Committee of Cognizance are silent. Again, my thanks for the cooperation today and the individuals, which demonstrates that when we work together, we can accomplish great things with a common goal. I can't imagine and continue not to believe that members on the other side of the aisle disregard what's happening to their constituents and what this administration and what DOJ employees have done, and how your constituents' information and data is at risk, and we can't even have a hearing on it or have people in front of us, that's outrageous.
And I think all of you know it. With that, mister chairman, following the lead of Gwen, I'll yield back my thirty seconds. Thank you, sir. Mr. Davis.
Speaker 9
Thank you, Mr. Chairman. I moved straight to the last four. Mister chairman, I think that passage of this bill is long overdue. I simply want to add my voice to it and commend representatives Smucker and Moore for their leadership in bringing it to us. Now you're back.
Speaker 10
Thank you, Mr. Chairman. I wanna thank Congresswoman Moore and Congressman Smucker for introducing this long overdue legislation that puts the survivors of sexual assault on the same plane as survivors of other violent crimes. After making it through lengthy and probing hearings, no one should be required to pay taxes on the restitution. This bill also changes burden of proof requirements, meaning that survivors don't need invasive medical or physical evidence to exclude their restitutions from being taxed. I'm glad congress is making it easier for survivors to become financially independent and to return to normalcy after an assault.
Unfortunately, it seems we're only interested in protecting some survivors. President Trump's administration is working overtime to prevent the unredacted Epstein files from being released. These survivors of sexual assault at the hands of some of the most powerful and wealthy people in the world still have not gotten justice because of who their own government is protecting. This bipartisan effort will make it easier for survivors to come forward, get accountability, and move on with their lives. I just wish we were creating bipartisan efforts to make sure that the survivors in the Epstein files were granted the same measure of justice.
And with that, I will yield back the princely sum of 3 minutes and 30 seconds.
Speaker 11
Thank you, Mr. Chairman. I too wanna add my voice to thank Representative Moore and Smucker for bringing forward this really important bill. I am a strong supporter of the Survivor Justice Tax Prevention Act. It's simply unfair that survivors of sexual assault or harassment may face an unexpected tax liability on compensation from their settlements. We should not be penalizing these victims for seeking justice.
At a time when many victims' lives are being turned upside down, we should be doing all that we can to provide economic relief. Some victims are simultaneously facing medical bills and counseling bills, while also searching for new safe housing and attempting to establish financial independence. These are important factors that should be considered. And while the current tax code already excludes damages for physical injuries from taxation, it is high time that our tax code recognizes that nonphysical harm like trauma can also have lasting impact on victims. Because of that, I want to say again to Representative Moore Smucker, thank you for this bipartisan legislation.
And I too agree with Representative Sanchez. It's our hope that the Epstein's victims as well would benefit from a bill such as this. With that, I too yield back a princely sum of 3 minutes and 30 seconds. Thanks.
Speaker 1
Additional members wish to strike the last word? Seeing none, we will move to the amendments. Are there any amendments to the amendment in the nature of a substitute? If there are no amendments, the question is in the adoption of the amendment in the nature of a substitute. All those in favor, signify by saying aye.
Aye. Those opposed, say no. In the opinion of the chair, the ayes have it, and the amendment in the nature of a substitute is agreed to. I will now recognize Mr. Buchanan for the purpose of offering a motion.
Speaker 7
Mister chairman, I move the committee favorably reports H.R. 2347 as amended to the House of Representatives.
Speaker 1
The question is on the motion to favorably report H.R. 2347 as amended to the House of Representatives. The clerk will call the roll.
Speaker 3
Mister Smith of Nebraska? Yes. Mr Kelly? Mister Kelly? Yes.
Mister Schweiker? Mister Schweiker? Yes. Mister Lehud. Mr. Arrington.
Mister Estes. Mister Estes, yes. Mr. Smucker. Mister Smucker, yes. Mister Hearne.
Mister Hearne, yes. Mrs. Miller. Missus Miller, yes. Doctor Murphy. Yes.
Doctor Murphy. Yes. Mister Kusthoff. Yes. Mister Kusthoff.
Yes. Mr Fitzpatrick. Mr. Fitzpatrick. Yes. Mister Stubby.
Mister Stuby, yes. Miss Tennie, yes. Miss Fishbach? Yes. Miss Fishbach?
Yes. Mister Moore? Miss Van Dyne. Miss Van Dyne? Yes.
Mr Feenstra. Miss Malia Takis. Miss Malia Takis? Yes. Mister Carey?
Mister Yackem? Yes. Mister Yackem? Yes. Mr. Miller?
Mr. Miller? Yes. Mr Bean? Yes. Mr Bean?
Yes. Mister Moran? Yes. Mister Moran? Yes.
Mister Neil? Yes. Neil? Yes. Mr. Doggett?
Mr Doggett? Yes. Mister Thompson? Mister Thompson? Yes.
Mister Larson? Mister Larson? Yes. Mr. Davis? Mr. Davis?
Yes. Miss Sanchez? Miss Sánchez? Yes. Miss Sul?
Miss Sul? Yes. Miss Delbene? Miss Delbene? Yes.
Miss Chiu? Miss Chiu? Yes. Miss Moore? Miss Moore?
Yes. Mr. Boyle. Mister Boyle, yes. Mister Bayer. Mr. Evans.
Yes. Mister Evans, yes. Mr Schneider. Mister Schneider, yes. Mister Panetta, yes.
Mr. Gomez. Mr. Horseford. Mister Horseford, yes. Miss Plaskett. Mister Swazi.
Mister Lehud. Mr. Arrington. Mr. Moore. Mister Moore, yes. Mr Feenstra.
Mister Feenstra, yes. Mr Carey. Mister Bayer?
Speaker 1
There being 41 yeses and zero noes, the motion is agreed to an HR 2323 47 as amended as ordered favorably reported to the house. Without objection, I ask that staff be authorized to make technical and conforming changes to HR 2347, and that members have two additional days to file with the committee clerk supplemental additional dissenting or minority views. Our next order of business is H.R. 5366, the Federal Disaster Tax Relief Act of 2025 introduced by Representative Stubey, Thompson, and Pinetta. Representative Stubey's state has been particularly hard hit by hurricanes in recent years, and he has been steadfast in advancing disaster-related tax relief policies. The bipartisan nature of this effort is a testament to the fact that no community across this country is immune to the threat of a natural disaster.
I also appreciate that this bill will be renamed in honor of our late colleague and friend, Doug Lamoffa, an individual who dedicated so much of his life to public service. We are honored to have mister Lamoffa here with us today as we acknowledge her husband's contributions to this important cause. I urge my colleagues to support this bill, and I'm pleased to recognize the gentleman from Florida, Mr. Stube.
Speaker 15
Thank you, Mister Chairman, Ranking Member Neal, and members of this committee. I once again speak to you to say thank you for allowing me the opportunity to bring before this committee common-sense bipartisan disaster tax relief. I would personally like to thank Chairman Smith for agreeing to name this bill after the late Doug Lamofa of California, who spent years championing disaster tax relief for his constituents and across the country. I got to know Doug very well as we work together on disaster tax relief. Last congress I led a historic bipartisan coalition to deliver comprehensive disaster tax relief to Americans in 48 states.
The impetus for this started on 09/28/2022 when Southwest Florida experienced hurricane Ian, one of the most devastating hurricanes to ever hit my state, killing nearly 150 people. I partnered with Rep Lamafa and former Ohio Rep Bill Johnson to create a single tax relief bill to help victims of disasters. Along with the support across the aisle from Representatives Mike Thompson and Jimmy Pinetta, both of California and this committee, we fought throughout 2023 and 2024 to deliver tax relief for millions of Americans, and we're able to get it across the finish line. But there's more work to be done. Since 07/04/2025, we have 34 states that have had a major disaster declaration. Who knows how many disasters will occur in 2026?
Today is an opportunity to secure disaster relief not just for those 34 states, but for Floridians and anyone else who may experience a disaster this year. That is why we are voting today on an extension of the law that Rep Limalfa and I wrote to secure certainty for Floridians, Californians, and anyone else who has or will be affected by disasters. And I can't think of a better tribute than naming this bill in his honor. This bill also does important work to secure tax certainty for wildfire victims in our Western states. I could say a lot of words about why this is important, but rather than speak on this part of the bill myself, Mister Chairman, I ask unanimous consent to play a video of Mister Lamofa's floor remarks on the Federal Disaster Tax Relief Act.
Without objection. I, therefore, yield my remaining time to my Republican co-lead on this bill, the gentleman from California, Mister Doug Lamofa.
Speaker 16
So just picture this, though. As I talk about paradise, you wake up in the morning, you hear there's a fire, all of a sudden, there's an evacuation. People are crowding the narrow roadways trying to get up the hill or down the hill, out of town, barely making it in some cases, scorched vehicles, tires on fire, all that. They're seeing their rearview mirror, their neighborhood engulfed in flames, their hose, their houses going down. All their mementos, as was mentioned, are in them.
They're wondering, did their neighbor get out? Did the elderly lady get up the street? Thank goodness there was a firefighter or a neighbor that maybe helped that lady get out just in time, so there was not even worse loss of life. The resilience of these folks in the fires that I've had in my district and my neighbors and my other neighboring states is just amazing as they've stuck with us on this. So a settlement happened with the utility to somehow partly compensate. Indeed, they'll never be made whole.
My colleagues have pointed that out well. They can never be made whole even with a lot of money. That settlement should not be a taxable event. Now think about it. Just break that down for a minute.
You're in your home. You've been paying off your mortgage. Maybe it's already paid off. You've got your equity in your home. So this disaster happens.
You lose your home. All of a sudden, you've got to rearrange your life. You gotta rebuild your life. Well, that portion of that equity that now is gonna be compensated for partly by the settlement with the utility, that portion of your home is now a newly taxable event because of the IRS interpretation of that. How is that right?
How is that fair at all that you have ripped out of your life, your home, your family, whatever may have happened to you personally? And now you have a taxable event on top of that piece of equity that was in your home because of a bad interpretation here. That's why this legislation is necessary. That's why it's been so strongly supported on both sides of the aisle, all through the process here. That's why we need to overcome these hurdles we have, whether it's over in the Senate or what have you, to get this done.
People deserve to have that predictability, that sustainability of their life to be able to put it back in, put themselves back into a good way again.
Speaker 15
I thank you for the chair's indulgence. I wanna thank his wife, Jill, for being here. I yield back.
Speaker 2
Thank you. And we wanna wish our best to Doug's family as well. He was a really good guy. But what you also just heard with that presentation is our embrace of the national principle. And the national principle says that if it's a fire or flooding in California, we all come to their aid.
If there are fires in Alabama, we all come to their aid. We don't ask for political affiliation. We say that there are members of the American family who are suffering. We come to their aid. Mister Stubby and as well to Doug and his family, and now to Mike Thompson.
I know what Mike Thompson did personally and professionally as it relates to these natural disasters in his native California and in his district. He not only pushed FEMA and pushed for federal support, he raised private money to come to the aid of those families. I attended those functions with him. Again, let us never abandon the national principle as it relates to natural disasters. I yield my time to Mr. Thompson.
Speaker 17
Thank the gentleman for yielding, Mr. Chairman. Thank you for bringing this bill up today, and I hope we work just as expeditiously to bring it to the floor for a full vote. Mister Stube, my friend and partner from across the aisle, thank you for working on this important issue in a bipartisan manner. And I do want to just give a great shout out to Doug Limalfa. Not only do we miss him, but we miss the good work that he's done.
He was a great partner on this bill and another bill that he and I worked on together to improve fire resiliency throughout our country and to bring insurance coverage back to so many people who need that. Doug's going to be missed for a number of reasons. But providing relief to disaster victims should never be a partisan issue. Wildfires, hurricanes, earthquakes, floods, they do they don't distinguish between Democrats, Republicans, or independent states. They do not care who you voted for, where you live, or what you believe.
When disasters strike, our responsibility is to show up and deliver relief. In my district, wildfire survivors know the reality of delay all too well. Some families have waited years, in some cases, more than 7 years just to receive the relief that they were promised. Families who lost their homes, families who lost everything, forced not only to rebuild their lives, but to fight their own government just to be treated fairly. The weight itself becomes a second disaster.
That's unacceptable. That's why I was proud to help deliver nearly $500,000,000 in tax relief to wildfire victims. Relief that helped families begin to rebuild and move forward. But we should not have to do this retroactively every time there's a disaster. We should not require disaster victims to come back to Congress asking for relief that should already be guaranteed under our laws.
That's what this legislation fixes. It makes relief forward-looking. It ensures that future wildfire victims who receive settlements are not stupidly taxed on that recovery, and are not forced to wait years for Congress to act. This should be the floor, not the ceiling, of how we respond to disasters in our community and to our constituents who are devastated by those disasters. When Americans are hurting, when they've lost everything, their federal government has an obligation to act, and an obligation to act quickly.
Every day of delay is another day a family is in limbo, another day a small business may not be able to reopen, another day a community struggles to come back. This bill is a step in the right direction. We will not tax the recovery. We will not force victims to navigate years of uncertainty just to be treated fairly. I urge my colleagues to support this legislation.
I thank you, Mr. Chairman. I thank all my colleagues for their great support on this, and I yield back.
Speaker 1
Thank you, Mr. Thompson. The committee will now proceed to consideration of HR 5366, the Federal Disaster Tax Relief Act of 2025. Without objection, the measure will be considered as read and open for amendment at any point. And at this time, I offer an amendment in the nature of a substitute, which was distributed in advance, along with a green sheet explaining it. Without objection, the amendment and the nature of a substitute shall be considered as read, open for amendment at any point, and considered the base text for purpose of amendment.
I will now turn to Tom Barthold, chief of staff for the Joint Committee on Taxation, to provide a technical description of the amendment and the nature of the substitute, with an emphasis on the changes made since introduction. I ask that members hold their questions until after his presentation.
Speaker 6
Mister chairman, the committee members have before them two joint committee documents, JCX 5, which describes the underlying legislation, and JCX 11, the green sheet that describes the chairman's amendment, the nature of a substitute. Over the past decade or more, the Congress has enacted a number of modifications to casualty loss provisions and other rules in response to natural disasters. For the most part, these changes have been made outside of the Internal Revenue Code. The legislation, as amended by the chairman's amendment, would bring these provisions on the internal revenue code, specifically with respect to casualty losses, which key off of a qualified disaster area to define an incident period. The chairman's amendment, the nature of a substitute, makes a change so that it applies so that the incident period of a disaster to which the presidential declaration is made begins on or after 12/28/2019 and before 01/01/2027.
Just as a historical note, since it seems like an odd date, 12/28/2019, relates to Puerto Rican earthquakes and the beginning of the incident period declared for that as part of the taxpayer certainty and disaster tax relief act of 2020. This provision related to casualty losses would be effective for losses after 12/31/2024. With respect to the exclusion from gross income of qualified wildfire relief payments, the chairman's amendment, the nature of a substitute, makes two important changes. A qualified wildfire disaster is a federally declared disaster occurring after 12/31/2014, and before 01/01/2017. The underlying legislation had no limitation date.
In addition, the amendment in the nature of a substitute provides that qualified payments may be received and excluded from the taxpayer's income without a date of limitation. The underlying legislation had provided a limitation date of payments received before 01/01/2031. These provisions would be effective for payments received after 12/31/25. The joint committee staff has estimated that the revenue effect of these proposals would be a loss of $408,000,000 in federal receipts over the fiscal year periods 2026 through 2036. That concludes my brief description.
Be happy to answer any questions that the members might have.
Speaker 1
Thank you. Are there any technical questions about the amendment and the nature of the substitute? Did you wanna strike the last word or a technical question?
Speaker 5
Thank you so much, Mr. Bartolo. I was wondering if you could explain to me what it means that this relief would be available if it's not subjected to the 10% AGI limitation. What does that mean?
Speaker 6
Underlying law allows taxpayers to take casualty losses only if the net casualty loss exceeds 10% of adjusted gross income. The legislation that we're looking at today provides it in the case of major disasters. So those federally declared major disasters, a different rule applies. And the rule, the underlying rule, is that a taxpayer may exclude any loss from an incident in excess of $500, that there is no 10% of AGI limitation.
Speaker 6
It's not in the case of a made, of a major disaster as, as declared in a, under the Stafford Act.
Speaker 5
So in other words, I mean, would a person be able to be made whole if it's above 10% of their AGI?
Speaker 5
Right. I'm talking about the flood in Milwaukee. Yep. Yes. That's what I'm talking about.
Speaker 6
No. No. I appreciate that. If it's a federally declared major disaster area, then casualty losses, recoveries for casualty losses may be excluded, may be deducted rather from income, to the extent that they exceed five, the loss exceeds $500.
Speaker 6
Gotcha. One's not necessarily made whole. That just depends on what sort of insurance recoveries they have and what's not recovered.
Speaker 1
Thank you. Are there additional technical questions about the amendment and the nature of the substitute? Seeing none, we will move to strike the last word. Mister Smith is recognized.
Speaker 12
Thank you, Mr. Chairman. Thank you, mister Barthold, for your walk through there as well. This is important material that we are discussing. Certainly, it's been brought to my attention how important it is with a disaster in my own district that is still taking place. I believe the ninth largest wildfire in American history has struck the grasslands of Nebraska.
Loss of life, sadly, rose white lost her life trying to escape the fire. Some might think that grassland fires aren't quite as dangerous. Yes. They are. And it's a reminder to all of us, and I think the comments made earlier about how disaster can strike our districts in different ways at different times, and we need to keep that in mind.
And I also certainly want to salute the opportunity here to name this bill after Doug Lomalpha. A gentleman, a legislator through and through, the style and substance of Doug Lomalpha in getting work done is certainly going to be missed. And, certainly, I joined my colleagues in thanking Jill for being here today. Your reflection on Doug's life as well, I think, has been very impactful for me personally, but, hopefully, for all of us on this diocese and across the house on both sides of the aisle. When we look at the need for coordination of local resources with federal resources that has been taking place in Nebraska.
I'm glad I can sit here and say exactly that, that the local fire chief for a county, an entire county population less than 500, that local fire chief knows his area more than anyone else, and federal resources kicked in, but per the direction of the local fire chiefs. I think that is important to note and that coordination was very effective. So as we do move forward, I think this is a reasonable ask in this legislation, for federal disasters designated as such, and that we can help out folks in need. I would also like to add that things might move a little more quickly on disasters if we paid our FEMA workers in addition to our TSA workers and some others that sadly aren't getting paid right now. Why?
Because of politics in Washington. We can do better. The American people expect better, deserve better, and I think it's important that we engage in a very reasonable situation of actually paying our federal employees for the work they do on time, and not late. Thank you. I yield back.
Speaker 2
Thank you. Just before I yield my time to Mister Davis, let me respond to the gentleman's comments, and that would be along the line of the president is proposing eliminating FEMA. And the experience I had in my constituency years ago with a tornado, FEMA performed extraordinarily well. Parts of the city that were so damaged, ate communities, they came in and did a spectacular job. Those homes have been restored.
People lived in trailers for 2 years. But what they were supposed to do, they did. They fulfilled their mission statement. We want them paid on this side, too. Break out that legislation, and let us vote accordingly.
I yield my time back to Mister Davis for a.
Speaker 9
Thank you. Thank you, Mr. Chairman. And I certainly agree with all of my colleagues who have spoken on this issue, and I certainly commend the work that was done by our former colleague, mister Limonta. I agree with all of the bills that we are entertaining today, and they are wonderful. But I think even though they're as good as they are, they failed to address the heart of the affordability and health care crisis that we currently face in our country.
Families and workers are hurting. Unemployment is on the rise. Grocery costs are surging. Gas prices are skyrocketing, and health care premiums are soaring. And we ask ourselves, well, much of the answer rests with the fact that we are a nation at war, trade wars, the Republican attacks on health care, and the Republicans' abdication of their responsibility to govern.
Right now, I am especially concerned that over 1,000,000 taxpayers haven't gotten their refunds due to an ill-conceived and executed executive order to disallow paper-based payments. Each week, another 300000 additional taxpayers have their refunds delayed. I'm also concerned because these millions plus taxpayers likely are the individuals who need their refunds the most. There was no way to quickly ask the Internal Revenue Service to send them a check more quickly. The letter didn't even have a phone number to talk to a live person.
Yet our committee has not taken meaningful action to get the Internal Revenue Service to act more quickly. And so I ask unanimous consent to enter into the record the letters that Representative Terry Soul and I have sent to acting Commissioner Besson about our concerns relative to delayed refunds, as well as the recent Tax Notes article about treasurers' failure to address our concern. Today, we mark up a disaster bill, aid bill, that when President Trump is rejecting the disaster claims by blue states like Illinois, it is three times harder for blue states to get disaster funding under this administration. When Americans are hurting, President Trump denies the MA because they disagree with his views. That is an un-American.
Yet my colleagues are not doing much to change it. As Americans struggle, as small businesses suffer, and our economy weakens, health is refused to them along the way. And so, while we pass bipartisan legislation, that is good. That is meaningful. That is decent.
I'm afraid that we are failing to deal with the hard, cold realities of the problems facing Americans, and I yield back, mister chairman.
Speaker 19
Thank you, Mr. Chairman. I'd like to move to strike the last word. I'm proud to support H.R. 5366, the Doug Lomalpha Federal Tax Relief Act. This legislation ensures that taxpayers impacted by federally declared disasters can fully deduct personal casualty losses, providing critical relief in the wake of devastating events. In North Carolina, especially Eastern North Carolina, we're all too familiar with the destruction caused by natural disasters, especially hurricanes.
Each year, communities across our state face the threat of flooding, hurricanes, hurricane force winds that upend our lives in just an instant. For families in Eastern North Carolina, these disasters bring not only physical devastation, but financial hardship as they work to rebuild their homes, their businesses, and their lives. Recovery is not immediate. It often takes years for communities to fully get back on their feet. Just a year and a half ago, Western North Carolina experienced this reality firsthand when Hurricane Helen caused widespread destruction and devastation.
I had the opportunity to visit the region very quickly after the Athamass and witnessed the devastation firsthand. The impact on those communities was and continues to be profound. It is critical that Congress does play its part in supporting these communities, not just in the immediate aftermath, but throughout the long recovery process. That includes ensuring the tax code works for disaster victims, not against them. I would like to highlight two additional pieces of legislation that would further support disaster-impacted communities.
First, in 1849, the disaster mitigation and tax parity act, originally introduced by my late friend and dear colleague, representative Doug Limalfa. Congress Limalfa was a dear friend. He was just down the hall from me and is proud to partner with him on this effort. Following his passing, I have taken the honor and responsibility of leading this legislation. Across the country, states have established disaster mitigation grant programs aimed at reducing damage and disasters before they strike.
In North Carolina, for example, these programs help fund fortified roofs in coastal homes, strengthening their ability to withstand hurricanes. These initiatives have proven highly effective, saving homes, reducing damage, and lowering long-term recovery costs. Similar programs exist in Alabama, California, as well as Louisiana. Unfortunately, the IRS currently treats these state-based mitigation grants as taxable income, forcing homeowners to pay taxes on funds intended to protect their property. Meanwhile, a similar program provided through FEMA is tax-free.
HR 1849 would correct this inconsistency and ensure that state-based disaster mitigation grants are not subject to federal taxation. I also wanna highlight HR 4745, the Disaster Zone Energy Affordability and Investment Act introduced by my friend and colleague, Congressman Stube. This legislation would allow utility companies to monetize unused tax credits, provided those funds are reinvested in projects located in disaster-affected areas. This approach would help drive investment into rebuilding critical energy infrastructure in these communities that need it most, including Western North Carolina. Lowering utility costs and strengthening energy systems are essential for the delivery of long-term recovery.
As I mentioned earlier, many communities in Western North Carolina are still rebuilding, as are some still in Eastern North Carolina from previous hurricanes, and the process takes time. HR 7450 offers a practical way to help accelerate that recovery, and I commend Congressman Stubey for his leadership on this issue. I look forward to working with my colleagues and the committee to advance these very important efforts in delivering meaningful relief to disaster victims. Our tax code should work for our Americans, which I believe, especially in OBB, we did. But further reformation can occur, and this is what these legislation pieces offered.
Thank you, Mr. Chairman. I'll yield back. Thank you, Mr. Chase.
Speaker 10
Yes. Mister chairman, I'd like to ask Yonano's consent to enter into the record an article titled Miss Deadline for Treasury to Address Refund Delays, Riles Dimps.
Speaker 5
Thank you, Mr. Chairman. I think this is, particularly considering the flooding that occurred in Milwaukee, Wisconsin. And in Wisconsin, last August, I am so grateful for this bill. And I would ask the authors of the bill to allow me, once it's been reported out, to become a cosponsor of this bill. So many of my constituents were left with hundreds of thousands of dollars of losses, and FEMA did not restore them, didn't even come close to restoring them.
They had insurance claims, but the insurance company said, well, it's flooding. That's an act of God. And, you know, unless it was suck pup failure, we're not going to make you whole. It happened, at a time of the month much like, I wouldn't compare it necessarily to what we saw with Katrina. But I was reminded of that when I saw the raw sewage that had backed up in so many basements at the end of a month in August where people just did not have the money to call in contractors to do the cleanup and, you know, putting on some rubber gloves and pulling out a bottle of bleach just was not enough.
So I'm grateful, and I'm just announcing my intent to be a cosponsor of this legislation. And with that, I would yield back.
Speaker 20
Thank you, Mr. Chairman. I moved to strike the last word, and I do want to thank you, mister chairman, for holding this mark up today for this important piece of legislation. I believe as members of Congress, we all have a responsibility to stand with the families, the small businesses, and the communities in the aftermath of natural disasters. Obviously, that's when people are most vulnerable. We've seen in recent years, especially more Americans have faced devastating storms like floods, tornadoes, wildfires, which leave behind not only physical destruction, but also a long and maybe complicated path towards financial recovery.
We've seen too often survivors forced to navigate a really confusing maze of federal rules and federal deadlines at the moment that they're trying to piece back their lives together. It adds red tape to tragedy. And I believe that's why Congress has taken bipartisan steps to not only simplify but strengthen federal disaster tax relief, recognizing the timing and flexibility can make the difference between recovery or ruin for a family and small business. Mister chairman, I've been proud to help lead that effort through the legislation that we sponsored last year. The filing relief for natural disasters act, which did pass the house on 03/31/2025, and was signed into law by president Trump on 07/24/2025, gives disaster survivors more certainty and more time to meet their tax obligations.
That law ensures that the IRS can promptly extend filing and payment deadlines when a disaster strikes, so that survivors are not punished by the tax code while they're recovering. This bill, H.R. 5366, builds on the same common sense principle. When Americans are struck by federally declared disasters, the tax code should work for them, not against them. Under this bill and the amendment and the nature of a substitute, I am glad that this bill is renamed the Doug Lamopha Federal Disaster Relief Certainty Act. It's an honor of our late colleague who championed this cause, and he was a strong advocate who was respected on both sides of the aisle and certainly by his constituents and those who live in California.
This bill strengthens and extends targeted disaster tax provisions so that families can deduct qualified disaster loans more easily, and so that communities can access that relief more quickly after a major disaster. By making these disaster tax rules more predictable, we're taking away that uncertainty for survivors, streamlining the administration for the IRS, and getting help and resources to those who most need it. Most importantly, this legislation continues the bipartisan approach that we established with the filing relief for natural disasters act, putting politics aside to focus on practical and pragmatic solutions for people who may have lost everything. So I do encourage my colleagues to support this common-sense legislation so that, together with the filing relief for natural disasters act, which is now signed into law, we can provide robust and predictable relief to Americans recovering from natural disasters. And with that, Mister Chairman, I'll yield back.
Thank you, Mr. Pinetta. Thank you, Mister Chairman and Ranking Member Neil. And, of course,
Speaker 21
Thank you to my colleagues on the Ways and Means Committee, Mr. Stuby and Mr. Thompson. I really believe that not just this bill, but the bill that was passed last year embodies what it takes to get things done for our constituents. Now, look, I'm very proud to be a part of this legislation, the Doug Lomalpha Federal Disaster Tax Relief Certainty Act that would extend for 18 months to be able to claim the casualty loss deduction. But I'm also wanna give a shout out to mister Stubey and to mister Thompson for the work that they did to provide the underlying bill for the foundation for the bill that we're dealing with today. That would be the Federal Disaster Tax Relief Act of 2025.
I say that because there were a lot of barriers put up in front of Mister Stubey and Mister Thompson when it came to leadership basically not moving this bill. Despite those barriers, what you saw from Mister Stubey is a constant fight for him to get this bill done because he understood how important it was for his constituents in Florida, and he empathized with our constituents in California. And so the underlying bill was passed through a discharge petition. You can imagine that. Something as important as this.
Despite that hurdle, Mister Stubey, with the work of Mister Thompson and other colleagues, Democrats and Republicans, actually did their best to get other people to sign on to that bill, get it passed out of Congress, get it passed out of the Senate, and get it to the president's desk. I think people should understand that this wasn't easy. As happy as we're sounding today, this was very difficult to get this underlying bill if it wasn't for the hard work of Mister Steubey and Mister Thompson. Now, it was hard work because we understand that the disasters do not strike blue states. They don't strike red states.
They don't just harm Republicans. It's not just Democrats. It's all Americans, unfortunately, who have experienced what happens in one way or another when disasters strike. Now Doug Lamofa also understood that. Now, trust me.
Doug and I had our political differences, but we always work to find our policy similarities, especially when it came to serving our constituents, ensuring that they got the proper tax relief after experiencing natural disasters and making sure that all Americans are made whole, especially when it comes to the federal tax code. So from discharge petition to Doug Lomalva, ladies and gentlemen, this is how things get done. I realize that good governing isn't sexy. This will not make the headlines tonight, but good governing is good politics, and I'm proud to be a part of it today with the passage of the Doug Lomalpha federal disaster tax relief certainty act out of the ways and means committee. With that, I yield back.
Speaker 1
Thank you. Are there additional members who wish to strike the last word? No. Seeing none, we will move to the amendments. Oh.
Oh, Miss Chew. Yep. Amendment.
Speaker 1
Okay. Are there? Yes. Let me say this. Are there any amendments to the amendment in the nature of a substitute? We'll now move to amendments, Miss Chiu.
Speaker 1
Would the general lady suspend Mister chairman, I reserve minimum. It's the minimum distributed. Point of order has been reserved. Miss Hsu, you're recognized.
Speaker 13
Mister chair, first, I want to commend the chair for bringing up this important legislation, the federal disaster tax relief act of 2025, now named after Doug Limalfa. And I especially wanna thank representatives Thompson, Stupid, Panetta, and the late congressman Limalfa for their leadership in introducing this bill. This bill is so important for my district right now, which is where the devastating Los Angeles fires occurred. Because my constituents are making settlements as we speak, it is so important they're relieved from paying taxes on the precious dollars that can help them restore their lives. Just over one year ago, the Eaton fire forever changed the communities of Pasadena and Altadena in California that I represent.
The Eton fire burned 6,000 homes to the ground, leaving 20,000 people homeless, with only the clothes on their backs. Most tragically, it took the lives of 19 of our loved ones, whose absence is still felt every single day. At the same time, just 30 miles away, the Palisades fire destroyed another 7,000 structures and tragically took 12 lives. Since then, families in my district have been fighting every single day to recover, to rebuild their homes, their communities, and their lives. And now, after months of waiting, thousands of survivors in my area are finally beginning to receive settlement offers from the utility to rebuild their homes, totaling hundreds of millions of dollars.
But the problem is that the federal tax exemption for these settlements expired at the age of 2025. So at the very moment that survivors are finally getting the resources they need to rebuild, they're being denied the full value of the compensation they are rightfully owed. So that is why the Federal Disaster Tax Relief Act of 2025 is so significant. It will ensure that survivors in my district and across the nation can receive the entirety of their settlements tax-free. And I want to be clear, this is a significant step forward, but it cannot be the last step.
Because today, 14 months after the fire, over 70 percent of survivors have not returned to their homes. Most are facing net losses of over $100,000, have exhausted their savings, or have gone into debt. So while this bill removes one major barrier, survivors are still facing many more. And that is why I introduced my bill, the Disaster Survivors Tax Relief and Recovery Act, to address the full scope of the challenges families are facing as they try to rebuild. That's the purpose of my amendment today.
My amendment builds on this bill by incorporating key provisions from my legislation to close the remaining gaps, ensuring survivors are not penalized for accessing their retirement savings just to get by, expanding charitable support to impacted communities, and helping spur rebuilding by increasing low-income housing tax credits. But, of course, we must recognize a tax relief alone is not enough. The Los Angeles fires were among the costliest disasters in our nation's history, and the single most important thing survivors need now is capital to rebuild. That is why it is critical for President Trump to fully deliver Governor Newsom's disaster supplemental request with no strings attached. Without that support, recovery will be slower, more expensive, and further out of reach for families who are already struggling to put their lives together.
Natural disasters do not discriminate, and neither should our response. So, mister chair, I appreciate your leadership in bringing this bill forward, and your willingness to work together to support disaster survivors across the country. I have two questions. First, my constituents really need this tax relief now, which means it's so important to get this bill across the finish line and signed into law. Are you planning to bring this bill to the floor for passage?
Speaker 13
Yeah. Yeah. I don't mark up legislation unless I want it to law. Okay. Thank you for that.
And my second question is that, I know that my amendment goes beyond this settlement issue, but I would like to ask for a commitment to continue working on these issues, which I feel are so important for natural disaster survivors across the country. And, I would like to ask for your commitment to continue working on this. And if so, then I would withdraw the amendment.
Speaker 5
You no. I would like to ask, I'm sorry. Miss Hugh's amendment has caused me to be concerned about this. I would like to ask mister Barto for information about this.
Speaker 1
That time has passed. We're on the, we've went through technical questions. We went through strike the last word. And so I apologize for the last word, move the strike. Already passed strike the last word.
You could offer an amendment.
Speaker 1
That there was a reason why your bill was the first one, Miss Moore. Mr. Horseford?
Speaker 1
Point of order has been reserved. Will the gentleman suspend while the amendment is being distributed?
Speaker 22
Yes. Gentlemen, may proceed. Thank you, Mr. Chairman. I also would like to begin by commending my colleagues, Mister Stube, Mister Thompson, and the sponsors of this legislation, and we'll be voting yes on the underlying bill in support of Mister Lamaffa and his legacy. It is well-intentioned legislation, and I look forward to supporting it.
Mister chairman, as you know, there are many forms of disasters, and there is a disaster that is unfolding in every district with the gaming economy throughout this country. And in Nevada, we know that all too well. Unfortunately, due to actions that Senate Republicans took, they included a provision whereby the tax code now treats gambling losses in a way that defies basic common sense. Before HR one, gamers could deduct 100% of their gambling losses. You were taxed on what you actually earned, nothing more, nothing less.
But Senate Republicans limited the wagering loss deduction. They chose to unjustly penalize gaming patrons and tourists by capping the deduction. Now those who participate in recreational gaming will be forced to pay taxes on money they never earned. Think about that. Paying taxes for income you never actually earned.
And the effect isn't just on our patrons or on tourists. It affects workers in Las Vegas and all across Nevada and in any state that has a significant gaming industry. Mister chairman, you know that I've been raising this issue since HR1 passed, and I trust your support of addressing this issue. That is why I, alongside my colleague representative Max Miller from Ohio, have introduced the full house act. Our bill fixes this mistake and restores the full deduction for gambling losses.
And that is exactly what this amendment does. It restores the law to what it was before. This type of change is necessary to ensure that existing rules, regulations, and court precedents remain relevant and intact. I would like to yield now my time to Representative Miller, to speak on this amendment.
Speaker 23
Thank you, Mr. Horstford. I really appreciate it. And thank you, mister chairman, as well, for holding this mark up here today. I really wanna thank Mister Horstford again for his partnership and for offering this amendment. This has been a very strong bipartisan effort, and I appreciate his leadership on this issue.
At its core, this is a simple principle. Americans should not be taxed on money they didn't actually take home, and Mister Horstford said the same thing. When this tax code strays from the standard, it undermines fairness, and it creates real distortions not just for individuals, but for industries and local economies that rely on clear and consistent rules. It's about ensuring the IRS treats taxpayers honestly and consistently, and that our tax system reflects real economic income and not artificial calculations. That said, I do believe it's important that we keep today's markup focused on the legislation that is before us.
But I look forward to continuing this work and getting it across the finish line in a bipartisan manner with my colleague, Mr. Horstford. With that, thank you, and I yield back, Mr. Horstford.
Speaker 22
Thank you, Mr. Miller. And I, along with Mister Miller and other members of the committee, look forward to working with you, Mister Chairman, as well as the ranking member, to find an appropriate time to address this issue. But as I said, it's important that we address all issues that are affecting our economy, and any disasters that impact it. And with that, I will withdraw this amendment and look forward to working with you, mister chairman, and other members of the committee. Thank you.
Speaker 1
Thank you, Mr. Horstford. I appreciate your amendment, and I appreciate the work that you and Mister Miller are doing on this very subject. And I am committed to make sure we fix a problem that the Senate made. They tend to do a lot of those, but this is something that I'm committed to. So, appreciate that.
Are there additional amendments to the amendment in the nature of a substitute? Seeing no amendments, the question is on the adoption of the amendment in the nature of a substitute. All those in favor signify by saying, aye.
Speaker 1
Those opposed, say no. In the opinion of the chair, the ayes have it, and the amendment in the nature of a substitute is agreed to. I will now recognize Mr. Buchanan for the purpose of offering a motion.
Speaker 7
Mister chairman, I move the committee favorably report H.R. 3366 as amended to the House of Representatives.
Speaker 1
The question is on the motion to favorably report H.R. 5366 as amended to the House of Representatives. The clerk will call the roll.
Speaker 3
Mr. Buchanan. Yes. Mr. Buchanan. Yes. Mister Smith in Nebraska.
Mister Smith in Nebraska. Yes. Mr Kelly. Mister Schweikert. Mister Schweikert, yes.
Mister Le Hood. Mister LeHood, yes. Mr. Arrington. Mister Estes. Yes.
Mister Estes, yes. Mr. Smucker. Mister Smucker, yes. Mister Hearne. Mister Hearn?
Yes. Mrs. Miller? Yes. Mrs. Miller? Yes.
Doctor Murphy? Yes. Doctor Murphy? Mister Kustoff? Mister Kustoff, yes.
Mister Fitzpatrick, yes. Mister Stubby, yes. Miss Tenny, yes. Miss Fishbach? Yes.
Miss Fishbach? Yes. Mr. Moore? Yes. Mister Moore?
Yes. Miss Van Dyne? Yes. Miss Van Dyne? Yes.
Mister Feenstra? Mister Feenstra? Yes. Miss Malia Takis? Yes.
Miss Malia Takis? Yes. Mister Carey? Mr Carey? Yes.
Mister Yackam? Mister Yackham? Yes. Mr. Miller? Yes.
Mr. Miller? Yes. Mr Bean? Yes. Mr Bean?
Yes. Mister Moran? Yes. Mr Neil? Mister Neil?
Yes. Mr. Doggett? Mister Doggett? Yes. Mister Thompson?
Mister Thompson? Yes. Mister Larson? Mister Larson? Yes.
Mr. Davis. Mister Davis, yes. Miss Sánchez. Miss Sánchez, yes. Miss Sul.
Miss Sul, yes. Miss Delbene. Miss Delbene, yes. Miss Chou. Miss Chou, yes.
Miss Moore. Miss Moore, yes. Mister Boyle? Yes. Mister Boyle?
Yes. Mister Bayer? Mister Evans? Yes. Mister Evans?
Yes. Mister Schneider? Mister Schneider, yes. Mister Panetta, yes. Mister Gomez?
Mr. Horseford? Mr. Horseford? Yes. Miss Plasket? Miss Plaskett?
Yes. Mister Swazi? Mister Kelly? Mister Kelly? Yes.
Mister Arrington, mister Bayer, mister Gomez, mister Swazi? Chairman Smith? Yes. Chairman Smith? Yes.
Speaker 1
Okay. Record Mr. Arrington as a yes. Mister Swazi, how are you recorded?
Speaker 1
So there being 43 yeses and zero noes. The motion is agreed to, and H.R. 5366 as amended is ordered favorably reported to the House. Without objection, I ask that staff be authorized to make technical and conforming changes to H.R. 5366, and that members have two additional days to file with the committee clerk supplemental, additional dissenting or minority views. Our next order of business is HR 5334, the Supporting Early Childhood Educators Deduction Act introduced by Representatives Fitzpatrick and Pinetta, which would extend the same tax deduction for out-of-pocket expenses that their K through 12 colleagues receive. I'm so grateful for the leadership of representatives Fitzpatrick and Pinetta for bringing this common sense legislation forward to ensure we are acknowledging the contributions of all of our educators.
Both colleagues have a track record of standing up for teachers and educators and have been fighting for years to make the change, in law, a reality. I reached out to my colleagues to support the bill, and I'm pleased to recognize the gentleman from Pennsylvania, Mister Fitzpatrick.
Speaker 24
Thank you, Chairman Smith, for holding this markup and for allowing us to speak on this very important legislation. Mister chairman, in Pennsylvania, we have over 68,000 early childhood educators who work tirelessly every single day to support our youngest learners. During a child's first five years, the foundation is built for everything that follows: how they learn, how they grow, and how they succeed. These formative years are critical, and our early childhood educators play a key and a central role in shaping these children's future. These educators do more than teach.
They create a safe and engaging environment for children to thrive. And despite earning very modest wages, these educators frequently reach into their own pockets to make sure their classrooms are equipped with the materials and supplies that these young students need to grow. Mister chairman, this dedication speaks volumes about their commitment, not only to their students, but to our community, and to our future workforce. And unlike K to 12 teachers, early childhood educators cannot deduct out-of-pocket expenses they incur in support of their classrooms. These educators invest their own money to ensure that young learners have the tools they need to succeed, and it is essential we extend that same recognition to support our early childhood educators just like we do our K to 12 educators.
Mister chairman, the SEED Act offers a bipartisan common sense solution by allowing pre-k educators to claim the same out of pocket expense deduction that is already available to our K to 12 educators. Correcting this exclusion and reimbursing these educators for their classroom investments will ultimately strengthen our workforce and direct more resources to our children during their most formative, and critical years. I wanna thank my friend Jimmy Panetta for his partnership on this bill, and I urge my colleagues to support this bipartisan common sense legislation to support our early childhood educators and the children that they teach. With that, yield back.
Speaker 2
Thank you, Mr. Chairman. Let me yield my time to our distinguished colleague from California, Mister Panetta.
Speaker 21
Thank you, ranking member Neil. Thank you, Chairman Smith. And, of course, thanks to my co-lead on this bill, Brian Fitzpatrick. The Supporting Early Childhood Educators Deductions Act, or the SEED Act, is legislation that would extend eligibility for the educator expense deduction to early childhood educators that you heard my colleagues so articulately explain. It's legislation that would finally recognize the vital role early childhood educators play in shaping the foundation of a child's development.
These educators work with children during their most formative years, laying the groundwork for cognitive, social, and emotional growth. Yet, despite this enormous responsibility, they have remained excluded from basic tax benefits that acknowledge teachers' financial burdens. The SEED Act would correct this by finally extending the existing above the line educator expense deduction to early childhood educators working with children five years old and younger. The current $300 deduction may seem modest, but for educators who routinely and often dip into their own savings to provide classroom supplies, it is going to be a meaningful acknowledgment and support. It is also a federal recognition of their professionalism, their dedication, and their commitment to the development of our children.
Across the country, we are facing a severe shortage of early childhood educators, a crisis driven by low wages and limited support, and, of course, the affordability issues that we're hearing more about. Despite these challenges, early childhood educators continue to extend themselves to ensure children have safe, enriching environments in which to grow. They do this even when their paychecks fall short, and even when they are forced to choose between personal expenses and classroom needs. By including early childhood educators in the educator expense deduction, the SEED Act acknowledges both the economic hardship and the extraordinary dedication these educators bring to their work every day. Investment in childhood education yields significant benefits, including better academic performance, higher graduation rates, and increased economic output.
The bill finally aligns federal tax policy with the reality that early childhood education is a critical part of a child's development and our economic strength. I admit I'm very proud to have authored this bill, and I'm proud that my colleague Brian Fitzpatrick is because this bill is a first step toward a broader conversation about supporting, retaining, and respecting the early learning workforce. I respectfully ask my colleagues on the committee to support this impactful legislation. And with that, I yield back. Thank you again, Mr. Chairman.
Thank you.
Speaker 1
The committee will now proceed to consideration of H.R. 53 34, the Supporting Early Childhood Educators Deductions Act of 2025. Without objection, the measure will be considered as read and open for amendment at any point. At this time, I offer an amendment in the nature of a substitute, which was distributed in advance, along with a green sheet explaining it. Without objection, the amendment in the nature of a substitute shall be considered as read, open for amendment at any point, and considered the base text for purpose of amendment. I will now turn to Tom Barthol, chief of staff for the joint committee on taxation, to provide a technical description of the amendment and the nature of a substitute, with an emphasis on the changes made since introduction.
I ask that members hold their questions until after the presentation.
Speaker 6
Mister chairman, the committee members have before them two joint committee documents, JCX 6, which describes the underlying legislation, and JCX 12, the green sheet, which describes the chairman's amendment, the nature of a substitute. Under present law, it is provided to educators of children in K through 12 an above the line deduction of up to $350, with any excess amount available to be itemized. What this legislation does is extend that deduction to early childhood educators. The chairman's amendment, the nature of substitute, broadens and clarifies the definition of an eligible educator to include early childhood teachers, instructors, counselors, principals, or aids in a qualifying school, and those persons must be providing at least 900 service hours. That's the same service hour standard as under present law for K through 12 teachers.
In addition, the amendment, the chairman's amendment, the nature of a substitute, specifies an eligible school as education or childcare to two or more children under age six who do not reside at the facility, and that the school operates either at public expense for a fee or under a grant for its services. The amendment, the nature of a substitute, also changes the effective date to expenses paid after 12/31/25. The staff of the joint committee has estimated that this legislation would result in a loss of federal receipts of $648,000,000 over the budget period of fiscal years 2026 through 2031. That concludes my brief description. Be happy to provide any answers to questions that the members might have.
Speaker 1
Thank you. Are there any technical questions about the amendment and the nature of the substitute? Mister Smith?
Speaker 12
Thank you, Mr. Bartold. I wanna have some clarification here. Is there any stipulation as to whether this benefit would only apply to public school teachers and not private school, or would you characterize the language as agnostic as to public or private institutions?
Speaker 6
Agnostic, agnostic again, sir. As noted, the definition is a school that operates at public expense, so that'd be a public school or for fee, be a.
Speaker 12
private school or under a grant for its services, which could also be a private, private school or nonprofit operation. Okay. Thank you. And so, just back to the napkin calculation of what this benefit would be, you could take the effective tax rate of an average educator and multiply that out, divide it out with what the benefit is or the deduction is for the actual benefit. Correct?
Correct, sir. So I appreciate that. And I also wanna say I appreciate my own public school teachers growing up, and this is a pretty modest benefit. Look, you know, moving forward that we can afford, especially early childhood that we know is important. And as we do act, I hope to help students and teachers that we will pursue policies that even directly help students as well.
I think this benefit would indirectly help students, but still can be important. So appreciate the efforts here, and especially the bipartisan nature of this, and look forward to doing what we can to promote education moving forward. Thank you. I'll go back.
Speaker 1
Are there additional technical questions? Seeing none, we will move to strike the last word. Mister Doggett is recognized to strike the last word.
Speaker 25
Thank you, Mr. Chairman. I have no objection to this bill, though it seems to be based on the principle that something is better than nothing, and it's only a little something. In saying that, I'm in no way being critical of the good intentions of the sponsors, but rather recognizing that in this congress, getting even a little something is about all that can be accomplished. This committee has been responsible for the diversion of a significant amount of federal resources in its back-door voucher bill. Our school trustees across the state of Texas are given the responsibility of allocating the pain of bad state policy and bad federal policy, as in one neighborhood after another, neighborhood schools are being closed as school districts are financially strapped.
I believe that our educators, our preschool teachers, and all of our teachers deserve much more than this bill. Every year, they spend their own money on school supplies to make up for the sorry state of public school funding. This is a back to school ritual as familiar as meeting the families of new students and arranging a classroom seating chart. Recent surveys indicate that educators have been dishing out anywhere from $500 to $900 from their own pockets on supplies and resources every year, which school districts cannot afford. And these costs are, unfortunately, under the Trump administration, only going up.
Thanks to Trump's reckless tariffs, educators and families are forced to pay on average over 7% more this year for school supplies than in previous years. For example, the cost of notebooks is up 17%, binders are up 12%. From lunch boxes to calculators, these price increases are being felt not only by teachers, but by families all over this country. Now let's compare the supply cost to the wages that educators are paid. Again, I refer to my home state of Texas where the indication is that educators, public school educators, are being paid on average as they start about 10,000 less than the average living wage for a single adult in Texas.
And, of course, for early childhood educators, which this bill addresses, last year in every single state, the median early childhood education wage fell below the living wage for a single adult. These are the educators to whom this bill offers a $350 deduction. According to the Tax Foundation, and we should look at the broader tax policies of this committee, single teachers with two kids earning the average wage are paying about 20% of their salary in federal income and payroll taxes. Even before considering the corporate giveaways in the big ugly bill that this committee approved, a study of the experience over the first five years of the bad tax law approved in the first Trump term indicates that 55 of those corporations that got all the benefits, household names like Bank of America, General Motors, and Netflix, paid an average rate of just 1.8% over five years despite raking in nearly $670,000,000,000 in profits. So what we have out of this committee, along with this 350 potential benefit for preschool teachers, is a policy where teachers, nurses, first responders are paying a much greater tax rate than some of the largest and most profitable corporations in the world, and the same applies to the ultra-rich who are not carrying their fair share for the cost of our national security.
This tax code tells you everything that you need to know about Republican tax priorities, and it's not about a preschool teacher stocking their classroom out of their own paycheck. Over the last few months of the Trump administration, this has been accompanied by the slashing of childcare assistance for college students and preschool development grants. The Trump administration illegally proposed cutting $12,000,000,000 in Head Start funding, and Trump moved to freeze $10,000,000,000 in child care and social service funding for our most vulnerable families. Those are the true priorities. I'm glad there can be a tiny bit of assistance to preschool teachers, but this is not reflective of the policies that we need, and hopefully, we'll get after this year's election.
Thank you.
Speaker 26
Thank you, chairman. This is an interesting piece, and my wife was a second grade teacher. My daughter taught in high school and then went on to helping people get into college, is what she's doing now. But this is something that really, I think, we take things for granted. So I was on a school board in Butler, and one of our principals gave me a book.
He said, read this book. And I said, what is this? This, well, look at the title. All I really need to know I learned in kindergarten. So people say, well, you know what, Kelly?
Come on. Quit screwing around. Here's what I would like. I wish we could put this in everything I needed to know. I took to Congress.
Key themes and lessons, fundamental morality, core tenets include sharing, playing fair, not hitting, saying sorry, and returning borrowed items. What an unusual concept. Practical wisdom. Lessons also focus on daily habits such as washing your hands, taking naps, and cleaning up one's own mess. Talking about cleaning up one's own messes, this is a body that could certainly look at what we've done in the past.
Simple living. The essays promote living a balanced life, maintaining wonder, and appreciating simple pleasures like warm cookies and cold milk. At my age, that's a very important asset. Perspective. The book argues that the golden rule is the foundation for navigating complex adult issues like politics, ecology, and relationships.
Uses examples in context, personal reflection. Is it frequently used as a guide for mindful living and personal reflection, commonly cited for self-help and philosophical comp contemplation? Inspirational readings? The opening essay is famous and has been read on the floor of the US Senate. They should butt up the Congress too, the House of Reps, making it a popular choice for comments and inspirational gatherings, which we are certainly getting a lot of.
Lesson structure: the text serves as a model for reflective writing, where ordinary events are used to teach universal truths. My friend, Mister Buchanan, has often said that 25% of our population is youth. They're 100% of our future. When I look at how we spend money and what we invest in, are we investing in things that are great policy, or are we investing in things that are politically sensitive? As a father of four, the grandfather of 10, I get calls from my grandchildren all the time.
And so they start off and just, hey, grandpa. And what I respond very quickly is, how much? What do you need grandma or grandpa to do? As people come to this body, we hear from people quite a bit. And I know we all have busy days, we're in our offices, and we're lined up with people who can come to see us.
So I've gotten to the point. I said, you know what? I really appreciate you coming to see us. Tell me how much it's gonna be used, and what is the return on the investment by hardworking American taxpayers. I can't tell you how much I appreciate my friends bringing this forward. If we don't recognize that the greatest asset we have are our children and their ability to get educated at a very early age and some of the things I pointed out, we really missed the boat.
And I tell people all the time, if you're really wondering who could make a change, find a mirror. If you're a parent, if you're a grandparent, if you're an uncle or an aunt, if you just know children from growing up in your neighborhood and how they've grown, I think it becomes essential that some of the things we're doing, we need to get back to the real basics of who we are as Americans. If we've forgotten that, then we've learned absolutely nothing. So I would just say this. I love the title.
I didn't go to kindergarten, but my wife had a second-grade class, and it was interesting to go and talk to them. So I would suggest this, the 1986 best-selling collection of essays by Robert Fulghum that finds profound life wisdom in simple childhood lessons. All I really need to know, I learned in kindergarten. But don't leave your education at school. Bring it home with you.
Bring it into your community. Bring it into your state. Bring it into your country. And realize we are the most blessed nation in the world. And when I hear people complaining about it, I always respond this way: that's interesting.
You're really fed up with everything. So, yeah, I really am. I said, so where are you moving to? Nobody's leaving. We need to stop complaining and start putting our shoulder to the wheel.
We are responsible for policy that is critical for the next generation and the generation after that. We live in a completely different world right now. We are in great danger, and we need to wake up and understand that only by being the strongest nation in the world can we continue to be the greatest contributor to anybody in the world who needs help. With that, chairman, I yield back, and I would hope I think all our colleagues feel the same. They all feel the same.
We get caught up in this thing about it's a red, it's a blue, it's this, it's that. Let you know what? It's up to us to do policy, and it's up to us to make sure that we're ensuring for the next generation that they get the same blessings that we have. There is no nation in the world that has been more blessed than the United States of America. Please quit complaining.
Make up your to-do list and do it in the right way. Thank you so much. Yield back.
Speaker 17
Thank you, Mr. Chairman. Thank you for bringing up this bill. We should be doing everything we can to help the teachers who educate our children and pave the way for a successful future for them. And I'd like to yield and balance my time to Miss Delbany.
Speaker 14
Thank you, Mr. Thompson. Early childhood educators are among the most important and yet the least recognized members of our education system. Every day, they provide the care, stability, and early learning experiences at some of the most formative moments in shaping our kids' development, long before they enter kindergarten. And like our K through 12 teachers, they frequently reach into their own pockets to purchase classroom materials and supplies to create safe, nurturing learning environments. Current law allows a modest above-the-line deduction of up to $350 to help offset out-of-pocket expenses incurred by elementary and secondary school teachers who use their own money to purchase classroom supplies.
But the educators working with our youngest learners, infants, toddlers, and preschoolers are excluded from the benefit, despite also being an integral part of our educational workforce. This bill solves that issue. It extends the existing teacher expense deduction to early childhood educators, recognizing them as the professionals they are, and slightly easing this financial strain. Providing this deduction will not solve every challenge facing our child care system, but it is a meaningful step toward letting the workforce that keeps it running know that they are valued. We still have to do more.
Educators across the country are underpaid and undervalued. School buildings are deteriorating. Students are falling behind internationally, and this administration has cut grants to schools and gutted the Department of Education. If we want the next generation to succeed, we must invest in our kids, our teachers, and our education system. This bill is a step in the right direction, and we must do more to set our kids and educators up for success.
We can start here today, but we need to keep that going. I urge my colleagues to join me in supporting this common-sense measure, and I yield back.
Speaker 8
Thank you, Mr. Chairman. First, let me commend Representative Fitzpatrick and Representative Panetta for this legislation. It's outstanding, and I want to associate myself with the remarks of Mister Kelly. Early on in my career, I had the great opportunity to work with Doctor Edward Ziggler. Doctor Ziggler founded and was part of the Yale Center for Child Development and Social Policy.
He is commonly referred to as the father of Head Start. And what doctor Ziggler's work helped do is bring attention to what happens to children between birth and going to kindergarten, and the developmental stages that they go through. So it kind of aligns itself in what mister Kelly was talking about earlier as well, and it makes this work especially not only for the teachers in our system, but also for the parents that are struggling while they have to work one and two jobs and to find childcare for their children. Ziggler's concept was, why don't we utilize existing public schools on bus routes that are safe, can already be constructed, and a way in which parents would have the notion that their kids were being taken care of. And with studies and also with the appropriate academic focus, and I say academic even for a 1 year old, is vitally important.
So I wanna commend both mister Panetta and mister Fitzpatrick for their efforts. And I also add that I think it would be important for this committee as well to take up mister Thompson's affordability act because the SEED Act is preserved in that. And as several of you have noted on both sides, it needs to be enhanced. We need to make sure that teachers who are reaching into their own pockets to pay for things that will only help and assist future generations is something we should bipartisanly grasp, together. So I wanna commend Jim Panetta, and I wanna condemn our colleague, mister Fitzpatrick and Kelly and, mister Thompson.
And, hopefully, we can all work together to get this done. I yield back.
Speaker 9
Thank you, Mr. Chairman. I must strike the last word. As a former teacher, I certainly support this bill before us today, but I also take the opportunity to raise the fair of republican leadership to engage in its responsibility of oversight. The rule that the house will vote on today will yet again block resolution of inquiry to get basic information from the administration about the illegal delaying of state's childcare funds, about the doge leaking of extremely confidential Social Security information, and about what doge did with every American worker's personal information in the national database of new hires. Actively hiding this information from Congress and the American public is deplorable.
The move to squelch transparency of the harm done by the Trump administration reflects undemocratic vague further application of the responsibility to govern, and collusion with the president whose mission is to foment hate and division, harming those whose experiences disaster and need aid simply because they may disagree with him politically. I support this bill and yield back the balance of my time.
Speaker 5
Thank you so much, mister chairman. I moved to strike the last word. This, you know, the debate is over. It is over. Birth through three is where it's at.
And if we don't educate, if we don't look at educating our future workforce in a serious manner, we are going to find ourselves sort of behind the aceball in terms of being able to produce the best and brightest and most talented person. We cannot, I associate myself with Mr. Douglas' comments. We just cannot afford to start publicly funded education, whether it's in private schools or public schools or charter schools, at six years old. That's really late to be doing that. I wanna associate myself with the comments of Mister Larson and Mister Kelly.
We, you know, according to a joint economic committee testimony that we had just last week, we're spending $1 on our children and $5 on seniors. And while I think it's extremely important to support our senior citizens, we will pay dearly in terms of our economic stability by underspending on our children. It is an investment, and we've heard that today. It's an investment that we cannot afford to ignore. Mister Doggett talked about the low teacher pay.
And just let me tell you, it's not only the low teacher pay, but the parents. Parents are required these days and times to bring paper, pencils, toilet paper to school because of the dearth of funding in our school system. Not only that, I don't know a teacher, including my daughter, who doesn't show up practically every weekend at the Dollar Tree or Dollar General buying supplies for their kids. I'll never ever forget the day that when I served in the state senate, I showed up at an elementary school and had a taxicab outside waiting to take me to the airport when a teacher ran to the taxicab to stop me, to verify that I was indeed a state senator. I said, oh yeah.
I'm a state senator. And she looked at me and said, well, can you donate a ream of paper to my class? I mean, this is very serious, people. And so while we're looking at balancing budgets and, you know, counting up our dollars and making investments that are immediate, we will suffer tremendously. This is a really good start.
But please understand that $300 to our teachers is a first step, and only a first step. And, I would thank you for recognizing me, mister chairman, and I would yield back.
Speaker 12
The gentlewoman yields back. Are there others wishing to strike the last word? Seeing none, are there any amendments to the amendment in the nature of a substitute?
Speaker 12
Are there any amendments? Seeing none. If there are no further amendments, the question is on the adoption of the amendment in the nature of a substitute. All those in favor, signify by saying aye. Aye.
Those opposed, no. No. In the opinion of the chair, the ayes have it, and the amendment in the nature of a substitute is agreed to. We'll now recognize Mister Buchanan for the purpose of offering a motion.
Speaker 7
Mister chairman, I move the committee favorably report HR 53 34 as amended to the House of Representatives.
Speaker 12
Question is on the motion to favorably report HR 5334 as amended to the House of Representatives. The clerk will call the roll.
Speaker 3
Mister Buchanan? Yes. Mister Smith of Nebraska? Yes. Mister Smith of Nebraska?
Yes. Mister Kelly? Mister Kelly? Yes. Mister Schweikert?
Mister Schweikert? Yes. Mister Lehud? Yes. Mister Lehud?
Yes. Mr. Arrington? Mister Estes? Yes. Mister Estes?
Yes. Mr. Smucker? Mister Hearne? Mister Hearn? Yes.
Mrs. Miller? Yes. Mrs. Miller?
Speaker 3
Yes. Doctor Murphy? Yes. Doctor Murphy? Yes.
Mister Kustoff? Yes. Mister Kusthoff? Yes. Mister Fitzpatrick?
Speaker 3
Mister Fitzpatrick? Yes. Mister Stuby? Yes. Mister Stuby?
Yes. Miss Tennie? Miss Tennie? Yes. Miss Fishbach?
Yes. Miss Fishbach? Yes. Mister Moore? Yes.
Mister Moore? Yes. Miss Van Dyne? Mister Fiendstra? Mister Feenstra?
Yes. Miss Melia Takis? Miss Melia Takis? Yes. Mister Carey?
Yes. Mr Carey? Yes. Mister Yackam? Yes.
Yackam? Yes. Mister Miller? Yes. Mr. Miller?
Yes. Mr Bean? Yes. Mr Bean? Yes.
Mister Moran? Yes. Mister Neil? Mr Neil? Yes.
Mister Doggett? Mr Doggett? Yes. Mister Thompson? Mister Larson?
Yes. Mister Larson, yes. Mr. Davis? Yes. Mr. Davis?
Yes. Miss Sanchez? Miss Sanchez? Yes. Miss Sul?
Miss Sul? Yes. Miss Delbene? Miss Chu? Miss Chu?
Yes. Miss Moore? Miss Moore? Yes. Mister Boyle?
Mister Boyle? Yes. Mister Bayer? Mister Evans? Yes.
Mister Evans? Yes. Mister Schneider? Yeah. Mister Schneider?
Yes. Mr Panetta? Yes. Mister Pineta? Yes.
Mister Gomez? Mr. Horseford? Mr. Horseford? Yes. Miss Plasket?
Miss Plasket? Yes. Mister Swazi? Mister Swazi? Yes.
Speaker 3
Mr. Thompson is not recorded. Hi. Mister Thompson, yes. How is Miss Van Dyne recorded? Miss Van Dyne is not recorded.
Miss Van Dyne, yes. How is Miss Delbene recorded? Miss Delbene is not recorded. Miss Delbene, yes. How is Mr. Arrington recorded?
Mr. Arrington is not recorded. Mister Arrington, yes. Mr. Smucker? Yes. Mr. Smucker?
Yes. Mister Buyer? Mister Gomez? Chairman Smith? Yes.
Chairman Smith? Yes. The clerk will report the vote. Mister chairman, the yeses are 43, and the noes are zero.
Speaker 12
There being 43 i's and no nays. The motion is agreed to, and HR 53 34 as amended is ordered, favorably reported to the house. Without objection, I ask that staff be authorized to make technical and conforming changes to H.R. 5334, and that members have two additional days to file with the committee clerk supplemental, additional, dissenting, or minority views. Our next order of business is HR 7971, the taxpayer experience improvement act introduced by oversight committee chairman Schweikert and representative Buyer, which will make the IRS more user friendly for taxpayers and provide for more transparency from the agency, including better access to updates regarding the status of refunds and more detailed information about agency efforts to be responsive. Oversight committee chairman Schweikart is a vocal champion of using innovative technologies to improve government reform efforts.
While some are hesitant to engage with new technology, representative Schweikart is always pushing the government to modernize for the benefit of American taxpayers. I urge my colleagues to support this bill. I'm pleased to recognize the gentleman from Arizona, Mr. Schweiker, for an opening statement.
Speaker 18
Thank you, Chairman Smith. And committee members, this one's actually fairly simple, and I appreciate mister Beyer joining me in this. A number of you have referred to this as the dashboard bill. That's just part of it. But the ability to log on, see where your refund is in the process.
The technology exists. It's just the ability for the public to access the technology. It also has a series of encouragements to adopt the very things that other agencies and private business do so you can, you know, call in, get information, and the ability to use technology as part of the backbone. Look. We have some data that says about 23% of the software is 25 to 64 years old in the backbone of the IRS.
You know, 33 here, here's a factoid. About 33% of the IRS information technology, its IT applications,
Speaker 18
decades old. We're just trying to provide the path to modernize how the agency interacts with the taxpaying public, to make that information of your taxes much more accessible. And this should be everything from what you can see online to the use of a telephone. And with that, I yield back.
Speaker 12
Gentlemen, yields back. Now recognize ranking member Neil for his opening statement.
Speaker 2
Thank you, Mr. Chairman. Let me recognize and yield my time to the gentle lady from Alabama, Miss Sewell.
Speaker 11
I move to strike the last word. Mister chairman, as the ranking member of the oversight subcommittee, I have been troubled by the current leadership at the IRS. We are in the middle of the tax filing season.
Speaker 11
We cannot get basic information from the IRS about millions of taxpayers who have received notices of their refunds being delayed. My colleague, Danny Davis, and I have sent a letter to the IRS on March 10, a copy of which has already been submitted to the record. The letter demands answers after seeing evidence that President Trump's executive order mandating the electronic payment of tax refunds has created massive delays for taxpayers who need and deserve their refund. Every week, 300000 more taxpayers receive notices that their refunds will be delayed for up to ten weeks. Meanwhile, secretary Bassett refuses to respond to our request for basic information to help our constituents.
It's unacceptable. The secretary needs to provide that information. Taxpayers deserve to have leadership at the IRS that they can trust. So I hope that secretary Bassett responds to our letter immediately and takes steps to quickly address the massive refund delays created by Trump's executive order. Now while I must continue to focus, I think we must continue to focus on addressing leadership issues at the IRS. I am also supportive of this bill, the taxpayer experience improvement act.
The dashboard mandate in this bill will provide much needed transparency for taxpayers. Moreover, by requiring electronic access for taxpayers to get information about their returns and refunds, we can improve the customer experience for millions of Americans. Let's increase transparency and accountability at the IRS by passing this bill, while also holding leadership at the IRS accountable and demanding answers for millions of taxpayers impacted by Donald Trump's executive order. Mister chairman, I would like to submit for the record the opening remarks of Don Bayer.
Speaker 12
Thank you. The committee will now proceed to consideration of H.R. 7971, the Taxpayer Experience Improvement Act. Without objection, the measure will be considered as read and open for amendment at any point. This time, an amendment is offered in the nature of a substitute, which was distributed in advance along with a green sheet explaining it. Without objection, the amendment and the nature of a substitute shall be considered as read, open for amendment at any point, and considered the base text for the purpose of amendment.
We'll now turn to Tom Barthold, chief of staff for the joint committee on taxation, to provide a technical description of the amendment and the nature of a substitute, with an emphasis on the changes made since introduction. I ask that members hold their questions until after the presentation. Mr Barthold.
Speaker 6
Mister chairman, the committee members have before them two joint committee documents, JCX 7, which describes the underlying legislation, and JCX 13 on a green sheet, which provides a description of the chairman's amendment, the nature of a substitute. The underlying legislation provides largely for three things in terms of modernizing towards the taxpayer experience, directs the secretary of the treasury to provide on the IRS website real-time information regarding calls to IRS helplines, including such information as wait time, the availability of callback service. This particular provision would be effective 12 months after the date of enactment. So were it enacted by July 1, it would be effective 07/01/2027. In addition, the underlying legislation directs that access to information on return status and refund status be provided through the IRS website.
This provision would be effective on January 1, the first year more than twelve months after the date of enactment. So were this legislation enacted during this session of Congress, this would be effective as of 01/01/2028. And then lastly, the legislation provides for a system for any tax for the IRS to create a system for any taxpayer to review returns, notices that they may have received, documents, and also to upload documents, and make payments through a web-enabled system. This provision would be effective January 1, 18 months or more after the date of enactment. So depending upon when it was enacted during this session of congress, it would be effective either 01/01/2028 or 01/01/2029.
The chairman's amendment, the nature of a substitute, makes a clerical correction to some of the underlying wording. The joint committee staff has estimated that this legislation would have no revenue effect on the federal receipts. That concludes my brief description. Be happy to answer any questions that the members might have.
Speaker 12
Thank you. Are there any technical questions about the amendment and the nature of the substitute? Seeing none, does anyone wish to strike the last word? Miss recognized Moore for five minutes. Thank.
Speaker 5
You, mister chairman, and I won't take five minutes. I just have a comment that once again, we're dealing with the great bipartisan bill. And I appreciate the members for bringing it forward today. And I do have a, you know, a sort of a suggestion for the chairman and the ranking member of the subcommittee, with regard to future taxpayer experience improvements. You know, I met with a group of tax return specialists, and they were concerned that as of 2011, the IRS had turned off a debt indicator or debt meter so that taxpayers would know, prior to filing their taxes, that they were going to be assessed because of some back taxes that they owed or other things and not being surprised when they get their taxes that indeed they were that there was excessive that they had excessive taxes owed and not being warned in anything.
Mister Bartoll, can I ask him a question? We passed that point.
Speaker 5
Well, I just want him. I don't know what you call this debt meter, but it's something that I don't think provides any ding to receipts. Is this simply a matter of the IRS turning back on? You know, Mister Swaiker, that we yield.
Speaker 18
Mister chairman, would the gentlewoman yield for a quick comment? Yes. I actually believe the dashboard.
Speaker 18
As we have discussed it, we'll actually provide that data. And with that, give the gentlewoman her time back.
Speaker 5
Thank you, mister Swakker. I'm gonna miss you so much. That's the debt dashboard. And they say that this is really providing a crisis to people because people are, you know, filling up their credit card, you know, thinking that they're gonna get a $4,000 return only to find out that this information had not been provided to them as it had been done in subsequent years. And so, with that, I would yield back.
Speaker 12
General Woman yields back. Are there any amendments to the amendment in the nature of a substitute? Seeing none. The question is on agreeing to the amendments. Excuse me.
If there are no further amendments, the question on the adoption of the amendment in the nature of a substitute. All those in favor, signify by saying aye. Aye. Those opposed, no. In the opinion of the chair, the ayes have it, and the amendment in the nature of a substitute is agreed to.
I will now recognize Mr. Buchanan for the purpose of offering a motion.
Speaker 7
Mister chairman, I move the committee favorably report H.R. 7971 as amended to the House of Representatives.
Speaker 12
Question is on the motion to favorably report H.R. 7971 as amended to the House of Representatives. Clerk, call the.
Speaker 3
Mister Buchanan? Yes. Mister Smith of Nebraska? Yes. Mister Smith of Nebraska?
Yes. Mister Kelly? Mister Kelly? Yes. Mister Schweikert?
Mister Schweikert? Yes. Mister Lehud? Yes. Mister Lehud?
Yes. Mr. Arrington? Yes. Mr. Arrington? Mister Estes?
Mister Estes? Yes. Mr. Smucker? Mr. Smucker? Yes.
Mister Hearne? Yes. Mister Hearne? Yes. Mrs. Miller?
Mrs. Miller? Yes. Doctor Murphy? Doctor Murphy? Yes.
Mister Kustoff? Mister Kustoff? Yes. Mister Fitzpatrick? Yes.
Mister Fitzpatrick? Yes. Mister Stubby? Mister Stubby? Yes.
Miss Tennie? Miss Tennie? Yes. Missus Fishbock? Yes.
Miss Fishbach? Yes. Mister Moore? Miss Van Dyne? Mister Feenstra?
Yes. Mister Feenstra? Yes. Miss Melia Takis? Miss Melia Takis?
Yes. Mister Carey?
Speaker 3
Mr Carey? Yes. Mister Yackm? Mister Yackm? Yes.
Mr. Miller? Mr. Miller? Yes. Mr Bean?
Speaker 3
Mr Bean? Yes. Mister Moran? Yes. Mister Moran?
Yes. Mr Neil? Yes. Mister Neil? Mister Doggett?
Mr. Thompson. Mister Thompson, yes. Mister Larson? Yes. Mister Larson?
Yes. Mr. Davis? Mr. Davis? Yes. Mr. Miss Sanchez?
Miss Sanchez? Yes. Miss Sul? Miss Sul? Yes.
Miss Dalbene? Miss Dalbene? Yes. Miss Chu? Miss Chu?
Yes. Miss Moore? Miss Moore? Yes. Mister Boyle?
Mister Boyle? Yes. Mister Bayer? Mister Evans?
Speaker 3
Evans? Yes. Mister Schneider? Yes. Mister Schneider?
Yes. Mister Panetta? Yes. Mr Panetta? Yes.
Mister Gomez? Mr. Horseford? Yes. Mr. Horseford? Yes.
Miss Plasket? Yes. Miss Plaskett, yes. Mr Swazi?
Speaker 3
Mister Swazi? Yes. Mister Moore? Mr. Moore? Yes.
Miss Van Dyne? Yes. Miss Van Dyne? Yes. Mr. Doggett?
Yes. Mister Doggett? Yes. Mister Bayer? Mister Gomez?
Chairman Smith? Yes. Smith? Yes.
Speaker 12
There being 43 i's and zero no's. The motion is agreed to, and H.R. 7971 as amended is ordered favorably reported to the House. Without objection, I ask that staff be authorized to make technical and conforming changes to H.R. 7971. The members have two additional days to file with the committee clerk supplemental, additional, dissenting, or minority views. Our next order of business is HR 7959, the IRS whistleblower program improvement act introduced by tax subcommittee chairman Kelly and ranking member Thompson.
Strengthening this program, including improved privacy protections and swift payments for whistleblowers, will not only be a win for those who have the courage to report tax fraud, but also better protect against such fraud, tax evasion, and other crimes involving the US tax code. Tax committee tax subcommittee chairman Kelly has had a long-standing commitment to helping reform and improve the IRS whistleblower program. And during a congress where this committee has prioritized passing anti-fraud legislation, we appreciate Chairman Kelly's focus on passing these important reforms. I certainly urge my colleagues to support this bill. Please recognize the gentleman from Pennsylvania, Mr. Kelly, for an opening statement.
Speaker 26
Thank you, Mr. Chairman, for bringing this bill before the committee. I also wanna thank my counterpart and tax subcommittee, Mr. Thompson. We work very well on these issues, and his leadership has been incredible. My Republican colleagues on the committees, chairman, you, mister Smith, miss Miller, and mister Moran, appreciate your partnership. The IRS whistleblower program and proven act builds on a proven program that delivers results for taxpayers.
Now since its modernization, the program has generated billions in recovered revenue, including more than 7 and a half billion dollars. The program strengthens tax administration by giving the IRS access to information it would not otherwise obtain. Whistleblowers play an essential role in upholding the integrity of our tax laws. When individuals come forward to expose wrongdoing by tax cheats and fraudsters, they help ensure our voluntary, and the key of this is a voluntary tax system remains fair for all Americans. Whistleblowers help the IRS target enforcement resources toward high-value cases, improving efficiency and accountability across the system.
This bill reinforces the program's foundation with targeted practical updates by ensuring courts consider a full record and apply meaningful oversight to IRS determinations, recognizes the risks that whistleblowers take when they come forward by establishing a presumption of anonymity in tax court, encourages timely administration from the IRS by requiring the payment of interest on delayed awards, strengthens transparency and oversight by improving reporting to Congress, and allows the administration review of award determinations. These reforms keep the program focused, predictable, and effective, ensuring a fair shake for all of our taxpayers at what has come down to. I wanna thank the National Whistleblower Center, Empower Oversight, Taxpayers Against Fraud, and other organizations who has spoken out in support of this. I urge my colleagues to support this bill.
Speaker 12
Thank you. I now recognize ranking member Neil for his opening statement.
Speaker 17
Thank you, Mister Neal, and thank you, Mister Chairman. And thank you, mister Kelly, for working together with me on this bipartisan bill. Let's be honest about where we are right now. Can we ask Americans to comply with one of the most complex tax systems in the world? We expect them to report accurately, pay on time, and follow the rules to the letter.
But at the same time, we know there are individuals and entities who exploit that complexity to cheat the system, and sadly, too often, they get away with it. And right now, the IRS is not in a position to catch all the scofflaws and cheaters. Between massive cuts to enforcement and the loss of experienced staff, enforcement capabilities are stretched, and that's just the reality. So whether we say it out loud or not, we're increasingly relying on whistleblowers to fill that gap. People on the inside, people who see fraud, people who are willing to step forward, if that's the system we're operating under, then it has to be a system that actually works.
Right now, it doesn't always work. Whistleblowers face uncertainty, delays, and in some cases, real personal and professional risk. That's not how you encourage people to step forward. This bill fixes that. It protects whistleblowers' privacies.
If someone is exposing tax fraud, they should not have to fear retaliation or public exposure just to be heard. It brings real fairness to the process. We're making clear that whistleblowers get a full and independent look at their claims, not just a rubber stamp of prior decisions. And it deals with delays head-on. When the government drags its feet, whistleblowers should not be the ones paying the price.
Providing interest on delayed awards is not generous. It is basic fairness. And let's step back for a second. This is not about expanding the government. This is about making sure that the rules we already have on the books are actually enforced.
Because when tax cheats get away with it, everyone else pays more or gets less. And when whistleblowers are ignored, discouraged, exposed, fewer people will step forward the next time around. That's how you undermine confidence in a system. If we want a tax system that's fair, we need enforcement that's credible. And if enforcement is going to depend in part on whistleblowers, then we need to treat them like they matter.
This bill does exactly that. I support it, and I urge my colleagues to do the same. And I yield back.
Speaker 12
Thank you. We'll now proceed to the bill. Without objection, the measure will be considered as read and open for amendment at any point. Miss Moore?
Speaker 5
I just simply want to, during my soliloquy on HR 23 47, I included numbers of letters. And one letter I submitted I did not publicly disclose was from the YWCA, USA. So I just want to enter into the record that they sent a letter of support for HR 2347.
Speaker 12
And we will now proceed at this. Without objection, the measure, the IRS Whistleblower Program Improvement Act, H.R. 7959, will be considered as read and open for amendment at any point. This time, I offer an amendment in the nature of a substitute, which was distributed in advance, along with the green sheet explaining it. Without objection, the amendment in the nature of a substitute shall be considered as read, open for amendment at any point, and considered the base text for purpose of amendment. We'll now turn to Mister Tom Barthold, chief of staff for the joint committee on taxation, to provide a technical description of the amendment and the nature of a substitute, with an emphasis on the changes made since introduction. I ask that members hold their questions until after the presentation.
Mr Bartel.
Speaker 6
Mister chairman, the committee members have before them three joint committee documents, JCX 8, which describes the underlying legislation, JCX 9, which provides the staff's estimated budgetary effects of the legislation, and JCX 14 on the green sheet, which provides a description of the chairman's amendment, the nature of a substitute. This legislation provides new rules for whistleblower petitions to the tax court for review of whistleblowers' awards, and it provides that the tax court review is de novo, with the scope limited by the administrative record and supplemented by newly discovered or previously unavailable materials. The chairman's amendment, the nature of a substitute, clarifies that with respect to the tax court reviews that the proceedings may, at the election of the whistleblower, be anonymous. These provisions would be effective for petitions pending on or after the date of enactment. So currently potentially pretending petitions before the tax court.
The legislation as amended also corrects the limitation on the deductibility of attorneys' fees that whistleblowers may incur to those related to mandatory awards. The chairman's amendment provides that the deductibility of attorney fees will also apply to discretionary awards. This provision would be effective for taxable years after the date of enactment. As I noted, JCX 9 reports the staff's estimated budgetary effects of a revenue loss of $44,000,000 over the budget period 2026 through 2036. That concludes my brief description of this legislation.
Be happy to answer any questions that the members might have.
Speaker 12
Thank you. Are there any technical questions about the amendment in the nature of a substitute? Mister Daugget is recognized for five minutes.
Speaker 25
Thank you very much for your explanation. As I understand, from Mr. Thompson's comments, the gold here is credible enforcement of our tax laws.
Speaker 25
And, with regard to that enforcement, am I correct that this bill does nothing to restore the IRS workforce that has been decimated by all the cuts that have been imposed on it for enforcing our tax laws.
Speaker 25
This only relates to private whistleblowers. People that say might be in a large corporation discover that that corporation is stealing from the treasury, exposes them, and gets part of the reward for doing that.
Speaker 6
It applies to any whistleblower regardless of their occupation or employer or whether they're retired.
Speaker 25
And since the goal then is to get more revenue into the treasury, I assume.
Speaker 6
I well, goal is to help with enforcement and to ensure fair treatment for the whistleblower.
Speaker 25
I guess the question I have is, given that the goal is fair treatment, encouragement of whistleblowers when they see criminal activity, and thereby enforcing the law, you get more revenue to the treasury. Why is it that this bill actually costs money instead of raising revenue?
Speaker 6
Well, on remember, mister Dawget, that we are, we estimate the cash flow to the treasury. So a couple of factors in terms of the losses. The first loss is related to tax court review of whistleblower awards by enabling the whistleblower to make a petition to the tax court and expanding the tax court's review of that beyond just abuse of the current. Currently, a tax court review is limited to abuse of discretion within the whistleblower office. So broadening the tax court's review potentially means the tax court will, in a number of cases, say the award was too small. And so our estimate here is that there will be somewhat larger awards to whistleblowers.
So even if with no change in whistleblower information that's provided leading to improved enforcement, improved collection, the awards that might be made, so the outlays from the treasury will go up. The second factor relates to the deductibility of attorney's fees that may be that a whistleblower may incur. Currently, some might describe it as a glitch. The language of the statute limits deductibility of attorney fees to whistleblower awards that are mandatory. This would, say that attorneys' fees can also be deducted relative to discretionary awards that are made.
So that's an increase in deduction against income by a whistleblower, and that's another factor in the revenue losses. We also do recognize that this might improve IRS enforcement overall collections, but the net effect we saw as being swamped by the two factors that I just described. Described. So you.
Speaker 25
Can't tell whether it will really increase the amount of revenue flowing in. Just looking overall at the whistleblower program, the IRS has reported that we have a tax gap of about $606,000,000,000 a year, and I believe the history is that the whistleblower program is currently constituted, raises about $400,000,000 per year, over its lifetime. So it's the gap is about 150 times bigger than the amount raised through the whistleblower program. A good program, but a modest contribution.
Speaker 6
You, I'm not I do not know the specifics that you cited, mister Dock, and I have no reason to doubt them. The program whistleblower program is relatively true. It's relatively modest relative to the IRS's estimates of the tax gap.
Speaker 12
I would remind members to limit their inquiries to technical matters, and rhetorical matters can be taken up during the strike, the last word. Any other members wishing to ask a technical question? Seeing none, we now move to strike the last word.
Speaker 27
Thank you, Mr. Chairman. I'd like to share my strong support for HR 7959, the IRS whistleblower program improvement act. It's common sense, bipartisan legislation to restore accountability and effectiveness to one of the federal government's most important tools for enforcing our tax laws. Let's start with the basic principle. In East Texas, we believe in playing by the rules, whether on the football field or in life.
Families, farmers, and small business owners work hard, pay what they owe, and expect everyone else to do the same. But when bad actors abuse the system, when they hide income or evade taxes altogether, that burden does not disappear. It gets shifted onto the backs of honest Americans. That's where the IRS whistleblower program comes in. For years, this program has empowered individuals with firsthand knowledge of tax fraud to come forward, and it works.
Whistleblowers have helped the federal government recover billions of dollars that would have otherwise been lost to fraud and abuse. But here's the problem. The program does have some broken parts. Right now, whistle blowers wait decades sometimes or at least a decade or longer to just receive the compensation that they are legally entitled to. That kind of delay doesn't just hurt whistleblowers.
It discourages people from coming forward in the first place, and certainly discourages people in the future from coming forward. When fewer people step forward, fewer tax dodgers get caught. That means less revenue collected and more pressure on law abiding taxpayers. HR 79 59 fixes that. This bill introduces practical, targeted reforms to make the whistleblower program actually work the way Congress originally intended.
First, it promotes timely payment by requiring the IRS to pay interest on awards that are unnecessarily delayed. That's just common sense that the government expects taxpayers to pay interest when they're late. The government should play by the same rules and pay interest when they're late. Second, it strengthens due process protections for whistleblowers. It ensures that they have a fair opportunity to challenge decisions and have their cases reviewed by a court based on the facts, not just the agency discretion.
Third, it enhances confidentiality protections, helping safeguard the identity of whistleblowers who take personal and professional risks to report wrongdoing. And finally, it addresses bureaucratic obstacles that have slowed the program down and reduced its effectiveness in recent years. Let's be clear. This is not about growing the government. This is about making government work better, and empowering private citizens.
This bill doesn't create a new program. It fixes an existing one, so it can do its job, uncover fraud, enforce the law, and protect taxpayers. There's another important point. This is bipartisan legislation because holding tax fraudsters accountable should not be a Republican issue or a Democrat issue. It's an American issue.
We should be doing everything we can to ensure that those who owe taxes actually pay them. Strengthening the whistleblower program is one of the most effective low-cost ways to do exactly that. In East Texas, we do not tolerate cutting corners or gaming the system. We believe in fairness, accountability, and responsibility. HR 79 reflects those values.
It supports the honest taxpayer. It cracks down on fraud, and it helps to restore trust that our tax system is being enforced correctly. I'm proud to cosponsor this legislation. I appreciate the work of Mister Kelly and Mister Thompson, and I urge my colleagues on both sides of the aisle to support it in this committee today. Let's fix what's broken.
Let's reward integrity, and let's make sure the rules apply to everyone. Thank you, and I yield back.
Speaker 12
Are there others wishing to strike the last word? Mister Daughet. Mister Doggett, it's recognized for 5 minutes.
Speaker 25
Thank you, Mr. Chairman. Like the other bills before us today, this bill deals with the sliver of the problem. And the sliver is demonstrated by the fact that the size of the tax gap, that is the gap between taxes owed and taxes paid, is about 150 times per year bigger than the amount that this whistleblower program has been able to recover. I support the provisions in this bill, but they deal with a sliver of the issue. And in talking about what that issue is, we have to look at the record of this committee and this Republican Congress on tax enforcement.
Of particular interest is a New York Times article entitled Push to Audit Private Equity and Venture Capital Falters under Trump. That was introduced when we met in January. It details how Republican cuts have caused the Internal Revenue Service to lose the ability to audit wealthy private equity and venture capital firms due to a severe lack of resources and expertise, with long planned audits stalled or abandoned. In the last democratic congress, we took historic steps to give the internal revenue service the resources that it needed to provide good customer service, to modernize its technology, and to begin to address this issue of large corporate corporations and complex partnerships that are not complying with our tax laws. The report that I'm entering into the record today from the Institute on Taxation and Economic Enforcement is entitled IRS enforcement boost was supposed to last 10 years.
Congress killed it in under 3. That's a Republican Congress that killed it. Indeed, congressional leaders have eliminated nearly all of the IRA's $45,600,000,000 for new IRS high-tech enforcement funding. This funding has been abandoned through a series of legislative maneuvers and backroom deals here in Congress. An account that was supposed to help close the gap between the wealthy households and profitable corporations owed and what they actually pay is effectively gone.
A new report from the inspector general for tax administration shows how these Republican cuts have gutted enforcement against large partnerships. In 2011, the Internal Revenue Service audited 2.7% of complex partnerships. Today, it's less than one-tenth of 1%. The IRS identified 483 large partnerships with major discrepancies. And their action, they didn't audit a single one because of, quote, resource limitations.
This problem of the gap in public resources to address this problem cannot be made up by this minor change in private enforcement. And, of course, all of this use of whistleblowers has to be considered against the record of this administration, its antipathy toward whistleblowers. Indeed, one of the first things that this administration did when the Trump regime began was to fire the head of the office's special counsel, the very official who was charged with protecting whistleblowers across the federal government. Then the administration went even further, attacking those charged with defending whistleblowers by defunding the Council of Inspectors General on Integrity and Efficiency. That's the body that supports oversight across more than 70 inspectors general.
It was defunded. It didn't stop there. Indeed, we know that, and Mister Larson pointed this out earlier, that a whistleblower in the Social Security Administration was who we counted on to disclose the exposure of sensitive data for Americans, through DOGE. But that whistleblower was frozen out of meetings, cut off from communications, and prevented from doing his job until he ultimately resigned and filed a retaliation complaint. Similarly, at FEMA, more than 190 employees warned that changes to the agency could leave it being unprepared for a major disaster. 30 signed their names publicly, and they were immediately placed on administrative leave.
At the National Institutes of Health, two of the nation's top public health scientists filed whistleblower complaints. They're now facing retaliation. And, of course, most recently, Joe Kent, the director of the National Counterterrorism Center, raised internal objections about the reckless war in Iran. Trump termed him weak on security. I suppose that's why he appointed him director of the National Counterterrorism Center.
So I'm pleased we're taking this modest step, but we need broad protection and support for federal whistleblowers, and we need the IRS to have the resources it needs to enforce our tax laws, so the burden is not shifted to the many American hardworking families and small businesses who are complying with our laws. I yield back.
Speaker 1
Does any additional member wish to strike the last word? Seeing none, are there any amendments to the amendment in the nature of a substitute? Seeing that there are no amendments, the question is on the adoption of the amendment in the nature of a substitute. All those in favor signify by saying aye. Those opposed, say no.
In the opinion of the chair, the ayes have it, and the amendment in the nature of a substitute is agreed to. I will now recognize Mr. Buchanan for the purpose of offering a motion.
Speaker 7
Mister chairman, I move the committee favorably reports H.R. 7959 as amended to the House of Representatives.
Speaker 1
The question is on the motion to favorably report H.R. 7959 as amended to the House of Representatives. The clerk will call the roll.
Speaker 3
Mister Buchanan? Yes. Mister Buchanan? Yes. Mister Smith in Nebraska?
Mister Smith in Nebraska? Yes. Mister Kelly? Mister Kelly? Yes.
Mister Schweiker? Mister Schweiker? Yes. Mister Lehud? Mister Lehud?
Yes. Mr. Arrington? Mr. Arrington? Yes. Mister Estes?
Mister Estes? Yes. Mr. Smucker? Mister Hearne? Mister Hearne?
Yes. Mrs. Miller? Mrs. Miller? Yes. Doctor Murphy?
Doctor Murphy? Yes. Mister Kustoff? Mister Kustoff? Yes.
Mister Fitzpatrick? Yes. Mister Fitzpatrick? Yes. Mister Stubby?
Yes. Mister Stubby? Yes. Miss Tennie? Miss Tennie?
Yes. Missus Fishbok? Yes. Missus Fishbock? Yes.
Mr. Moore? Yes. Mr Moore? Yes. Miss Van Dyne?
Mister Feenstra? Mister Feenstra? Yes. Miss Malia Takis? Miss Malia Takis?
Yes. Mister Carey? Yes. Mister Carey? Yes.
Mister Yackam? Yes. Mister Yackam? Yes. Mister Yes.
Mister Miller? Yes. Mr Bean? Yes. Mister Bean?
Yes. Mr. Moran? Mister Moran? Yes. Mr Neil?
Mr Neil? Yes. Mr. Doggett? Mister Doggett? Yes.
Mister Thompson? Mr. Thompson? Yes. Mister Larson? Mister Larson?
Yes. Mr. Davis? Mister Davis? Yes. Miss Sanchez?
Miss Sanchez? Yes. Miss Sewell? Miss Delbene? Hi.
Miss Delbene? Yes. Miss Chiu? Hi. Miss Chiu?
Yes. Miss Moore? Hi. Miss Moore? Yes.
Mister Boyle? Hi. Mister Boyle? Yes. Mister Byr?
Mister Evans? Yes. Mister Evans? Yes. Mister Schneider?
Mister Schneider? Yes. Mister Panetta? Yes. Gomez?
Mister Horsford? Mr. Horseford? Yes. Miss Plasket? Yes.
Miss Plasket? Yes. Mister Swazi? Yes. Mr Swazi?
Yes. Mr. Smucker? Miss Van Dyne, Miss Sewell, Mister Bayer? Chairman Smith? Yes.
Chairman Smith? Yes.
Speaker 1
There being 41 yeses and zero noes. The motion is agreed to in HR 7959 as amended, as ordered favorably reported to the house. Without objection, I ask that staff be authorized to make technical and conforming changes to HR 7959, and that members have two additional days to file with the committee clerk supplemental additional dissenting or minority views. There being no further business before the committee. The committee stands adjourned.
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