IRS Comes Under Fire for Conference Spending

By Ken Berry
 
The IRS – already under intense pressure due to activities targeting "tea party" and other conservative groups – is expected to face even more heat this week when the Treasury Inspector General for Taxpayer Administration (TIGTA) releases a new report. TIGTA claims that the nation's tax collection agency spent about $50 million in holding at least 220 conferences for IRS staffers between 2010 and 2012.
 
This latest revelation caps off several difficult weeks for the IRS. In recent developments, the IRS is being investigated for activities targeting conservative groups applying for tax-exempt status, Acting IRS Commissioner Steven Miller was replaced, and the agency has been criticized for producing videos at taxpayers' expense. Three videos – including parodies of Star Trek and Gilligan's Island and another one of IRS workers line dancing – were handed over to Congress on May 31.
 
The videos collectively cost more than $60,000 to produce, but that's just the tip of the iceberg, according to the new TIGTA report. For instance, the IRS allegedly spent $4 million for an Auguest 2010 conference in Anaheim, California. The conference was attended by 2,600 IRS employees from 350 offices nationwide.
 
The IRS didn't negotiate lower room rates at the Anaheim conference, although that's the customary practice of government agencies. To make matters worse, some attendees at the conference received extra benefits, including baseball tickets, while staying at lavish presidential suites normally costing $1,500 to $3,500 per night.
 
During the conference, the IRS doled out a total of $135,000 in fees to fifteen outside speakers. One was paid $17,000 for a speech about "leadership through art." 
 
The new report also includes more details about the IRS videos that were produced prior to the conference. In addition to the parodies supposedly used for training purposes, another video shows IRS workers practicing dance moves to the "Cupid Shuffle." The IRS admitted in a statement that the video of the dancing staffers was "unacceptable and an inappropriate use of government funds." 
 
In defense of the IRS, however, spokeswoman Michelle Eldridge said that spending on large agency conferences with fifty or more participants declined from $37.6 million in fiscal year (FY) 2010 to $4.9 million in FY 2012. The government's fiscal year begins on October 1 of the previous calendar year.
 
Daniel Werfel, who was recently named as the new IRS Acting Commissioner in place of Miller, referred to the Anaheim conference as "an unfortunate vestige from a prior era." He added, "While there were legitimate reasons for holding the meeting, many of the expenses associated with it were inappropriate and should not have occurred."
 
Werfel noted that the IRS has imposed spending restrictions since 2010, cutting back on travel and training expenses by more than 80 percent. "Taxpayers should take comfort that a conference like this would not take place today," Werfel said. For its part, the Treasury Department said that it will work with Werfel to help restore public confidence in the IRS.
 
The TIGTA report on IRS conferences will be presented at a hearing on June 6 by the House Oversight and Government Reform Committee. This is the same committee, chaired by Representative Darrell Issa (R-CA), which is investigating the "tea party" scandal.
  
Related articles:
 

You may like these other stories...

Legislation coming out of Washington just might reduce homeowners' burden for disaster insurance. It's a topic very much on everyone's minds since the mudslide in Oso, Washington. The loss of human life was...
Divorce is hard, and the IRS isn't going to make it any easier. The IRS generally says "no" to tax deductions that might ease the pain of divorce. In certain circumstances, however, you might be able to salvage...
IRS chief: New rule on the way for tax-exempt groupsIRS Commissioner John Koskinen told the USA Today on Monday that the agency will likely rewrite a proposed rule regulating the political activities of nonprofit groups to...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.