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IRS Suspends Two Officials for Taking Conference Perks

Jun 6th 2013
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By Ken Berry

Following a new report from the Treasury Inspector General for Tax Administration (TIGTA) turning the spotlight on a 2010 conference in California, the IRS announced it has placed two of its employees on administrative leave for "inappropriate behavior." The IRS is also starting dismissal proceedings for the two workers, who are accused of taking advantage of free food and gifts while being put up in a lavish hotel suite.

According to sources within Congress, the two staffers placed on leave – Fred Schindler and Donald Toda – received more than $1,100 in free food, violating government ethical standards. Schindler and Toda were both working on implementing health care law reforms at the IRS.

The TIGTA report revealed that the conference in Anaheim cost the IRS more than $4 million. IRS staffers stayed in presidential suites normally costing $1,500 to $3,500 per night. Although the IRS paid a flat daily fee of $135 per hotel room, 132 of its employees benefitted from upgrades, adding to the total cost.

At the same conference, the IRS paid $135,000 to fifteen outside speakers, including a $17,000 fee for one speech on "leadership through art", featuring portraits of Michael Jordan, Bono, Abraham Lincoln, and other famous people. The conference also has become notorious for the presentation of a Star Trek video spoof used for training purposes that cost the IRS $60,000 to produce, along with another one based on Gilligan's Island. A third controversial video shows IRS staffers practicing a line dance.

In total, the report says the IRS spent close to $50 million on more than 200 conferences between 2010 and 2012. The Anaheim conference averaged more than $1,500 per attendee. One conference held in Philadelphia in 2010 cost $2.9 million, one at San Diego set the IRS back another $1.2 million, and still another one in Atlanta cost $1.2 million. All these conferences would be in violation of new rules, instituted in 2012, that cap expenses for a single conference at $500,000. The IRS exceeded the limit at thirteen conferences in 2010.

This is just one more headache for new IRS Acting Commissioner Daniel Werfel, who succeeds another acting commissioner, Steven Miller. "The agency stands ready to confront any problems that occur, hold accountable anyone who acted inappropriately, and permanently fix these problems so that such missteps do not occur again", said Werfel. He's scheduled to appear at a congressional hearing on June 6, along with Faris Fink, the IRS official who portrayed Mr. Spock in the Star Trek video, and Russell George, the Treasury's tax administration inspector general.

Werfel has cited the hijinks at the 2010 conference as "an unfortunate vestige from a prior era." TIGTA has confirmed the IRS' assertions that travel and training costs have declined significantly since then.

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