U.S. Department of the Treasury

As Prepared for Delivery

Introduction

Good afternoon.  Earlier today you heard from Deputy Secretary Adeyemo and IRS Commissioner Werfel about the number of ways your efforts as a committee has informed the work of the Treasury Department and IRS. I’m not sure I can compete, but I would be remiss if I didn’t take this opportunity to thank you directly for your extraordinary efforts over the last two years. 

This inaugural TACRE is groundbreaking. In its 200+ year history, this is the first time Treasury has gathered outside experts to examine the barriers to economic opportunity through the lens of racial equity, as well as the solutions that could change the economic trajectory of families that have been marginalized in our economy for far too long. We have all been at this work for a long time. We understand we will not undo the legacies of structural racism, climate injustice, or economic exclusion and exploitation in just two years. But, we all gathered here in good faith with a shared understanding that the painstaking work of repairing and rebuilding a fairer economy has to start somewhere – and it started with us.  

You have my heartfelt gratitude. Thanks to the tone set by President Biden and Vice President Harris on the first day of the Administration through EO 13985 and the leadership of Secretary Yellen and Deputy Secretary Adeyemo, the Treasury Department was poised to accept the challenge of examining and eliminating barriers to economic opportunity. Even so, I knew I could not do this work alone. I needed the brain trust around this table to bring ideas, inspiration, accountability, unique knowledge and skill sets to move our agenda forward. This work takes a village, and you have been a big part of mine. 

I also want to take a moment to thank the Treasury staff that supported this effort. From my colleagues in key policy and program teams to the new Equity Hub team this work could not get done without your partnership and mobilization. Finally, a very special thank you to the incomparable Mayor Nutter and Felicia Wong in their roles as Chair and Vice Chair. Your steadfast leadership, advice, and insight kept us focused on the highest priorities and delivering results for the American people. 

Our work could not have come at a more critical time. At the outset of this Administration, our country was in the middle of a public health crisis that triggered an economic calamity. Millions of jobs were lost. Our great task was to prevent the economic scarring that had been the hallmark of previous recoveries.

As Secretary Yellen shared in our first meeting together, the Department’s approach to equity is rooted in the fundamental principle that producing strong outcomes for all Americans requires investments in people and places that have in the past been cut off from major economic investments, including communities of color, low-income families, energy communities, and rural areas. In the implementation of the American Rescue plan, Treasury leveraged input from local leaders and support from trusted partners to deliver aid to those most in need. This approach helped Treasury and the Biden-Harris Administration drive the most equitable economic recovery on record.

TACRE’s work began just as the Department was in the early stages of implementing the Inflation Reduction Act. From the beginning we understood IRA’s potential to reduce disparities, build wealth, and boost productivity. This created a fresh opportunity to consider how to make tax administration more fair, better support mission lenders, and use research to understand the impacts of our policies and programs.

Key Accomplishments 

As a committee, you recognized the timely opportunities to inform policy decisions that will shape our economy for the next decade and beyond. Over the course of two years, you provided more than 40 recommendations. We also benefited from your participation in key stakeholder events, deep expertise, and networks touching deep into underserved and marginalized communities. In April, we shared a comprehensive technical report on the steps taken to implement TACRE’s recommendations, and today I shared a memo with additional updates. So, I won’t try to capture your full impact now, but I do want to call out five areas where your recommendations have informed Treasury’s approach: 

• Direct File pilot: The Direct File pilot launched this year was a tremendous success, processing returns for over 140,000 tax filers and issuing more than $90 million in tax refunds. As a committee, you advised us on how to develop and launch the pilot with all taxpayers in mind. For example, you recommended Treasury standardize presentation and outreach materials. Treasury and IRS took that advice, developing and disseminating the Direct File Partner Outreach Toolkit to make sure the pilot reached underserved tax filers who may be wary of working directly with the IRS. The pilot also featured a dedicated live chat feature to answer user questions. Finally, the design phase included engagement with Spanish speakers and Spanish-language focus groups to make sure the pilot reflected the needs of a diverse tax filing population.
• Reducing tax audit disparities: The IRS is running two pilots this year aimed at improving accuracy and reducing disparities in selection for EITC audits. The IRS also committed to reducing the number of correspondence audits of returns claiming refundable tax credits. Finally, IRS Commissioner Werfel has committed to releasing the results of these pilots, maintaining transparency on audits, and examining audit fairness by other demographic categories. Today we received additional recommendations on how Treasury and the IRS can rebuild trust among tax filers, and we look forward to working with members of this committee and other stakeholders to continue this work. 
• Support for mission capital lenders and allocators: When the CDFI Fund revised its certification application last year, final guidance included several recommendations made by TACRE. The new certification application establishes clear standards for responsible lending, collecting additional transaction-level information and demographic information on the board members and executive leaders of CDFIs. The CDFI Fund also expanded the focus on Vietnamese, Filipino, Native Hawai’ian, and Alaska Native communities. Treasury has also focused on expanding opportunities for underrepresented fund managers in the State Small Business Capital Initiative. As of July 2024, 54 venture capital funds have received an SSBCI capital commitment; 36 are owned or managed by underserved fund managers or have investment strategies focused on underserved founders.
• New data collection and analysis: As a committee, you have urged us to become more sophisticated in the ways we analyze how programs and policies affect people who are underserved or underrepresented. To that end, the Department initiated the collection of new program and performance data collection across COVID relief, CDFI and small business programs. Treasury published a new working paper on distributing marriage penalties and bonuses by race and ethnicity. This year for the first time ever, Treasury published alongside the Greenbook a deep-dive examination of the impact of some of the Greenbook’s tax proposals on the racial wealth gap and a distributional analysis of proposals to expand the Child Tax Credit, expand the Earned Income Tax Credit, and limit preferential tax rates on capital income. Finally, Treasury expects to finalize a rule this year to share additional tax data with the Census, which will improve researchers’ ability to examine the impact of tax policies by race and other demographic drivers. 
• Improving outreach and communications strategies: In its implementation of IRA, the Department’s approach is to deliver services in accessible ways, in preferred languages, and through trusted partners. When it comes to IRS modernization, the IRS is taking a strong customer-service approach.  Transforming the IRS into a modern twenty-first century enterprise requires interactions with individual and business taxpayers to take place online in the same way and level they interact with their banks and other financial institutions. Apart from the Direct File pilot, the IRS is working to improve customer service more broadly by deepening engagement with underserved and vulnerable communities and being more responsive to service gaps experienced by tax filers. The IRA program office has created a dedicated Stakeholder Engagement team to make sure that eligible consumers, businesses, labor, tribal, state and local governments do not miss the critical opportunities available to them. They also developed a place-based initiative to promote elective pay and transfer election benefits. Finally, they are also building new relationships with climate-impacted communities to inform policy design.

Conclusion

Without question, this work is ongoing and there is more to be done. Soon there will be a new cohort of Members to accept your baton and continue your efforts. And while I look forward to working with the new Members, this is the group that has laid the foundation for all future efforts. It can be tempting to get wrapped up in the slow pace of change, the technicalities that seem to keep us from ideal solutions, or other challenges. But I am an optimist. Beyond the responses to specific recommendations, TACRE has transformed the way Treasury considers and accounts for the needs of our nation’s most vulnerable, marginalized, overlooked and underestimated in our policymaking. 

When we look back on the transformational impact of the Biden-Harris economic investments, we will see a throughline to the advice and insights of TACRE paving the way to a more equitable and inclusive economy. 

Thank you. 

###