It's official. An Internal Revenue Service division spent $4.1 million on one conference.Oh my goodness, IRS. Really? You know better than that.
But then, apparently you didn't know better than that three years ago.
The Treasury Inspector General for Tax Administration (TIGTA) latest whack at the IRS confirms that the August 2010 Small Business and Self-Employed (SB/SE) Division's managers conference in Anaheim, Calif., topped the $4 million mark.
It's a good thing those videos were done utilizing local talent back at the IRS office in suburban Maryland.
Still, the IRS acknowledged to TIGTA auditors that it spent $50,187 on videos for the conference.
Myriad expenses: I tried to give the IRS the benefit of the doubt before the TIGTA conference report came out, thinking it would be bad, but not, you know, incredibly bad. The way things are going for the IRS nowadays, I should have known better.
Other notable expense excesses for the SB/SE event attended by 2,600 of the division's employees included:
- $133,350 for 15 outside speaker presentations, which included a $17,000 fee for the keynoter whose presentation included creating six paintings of famous people to reinforce his message of finding creative solutions to challenges;
- $35,800 in travel costs for IRS employees who made three planning trips to Southern California prior to the conference;
- $30,000-plus for 45 IRS employees who lived in the local area to stay at the Marriott, Hilton and Sheraton hotels in Anaheim and incur per diem expenses while at the conference; and
- $64,000 for assorted gifts and promotional items given to the attendees.
Yes, "little" things do quickly add up. But $4.1 million. For one event. Again, really?
And, noted Inspector General J. Russell George, who's becoming a bit of a political wonk/tax geek celebrity thanks to all his recent appearances at Congressional hearings, "Certain of the IRS' expenses associated with the Anaheim conference do not appear to be a good use of taxpayer funds."
All together now -- Understatement!
More than one: While the 2010 gathering was, according to the TIGTA report, the most expensive IRS conference held in fiscal years 2010 through 2012, it was not the only instance of excessive off-site spending.
Over the three-year period TIGTA examined, it found that the IRS held 225 conferences that cost a total of approximately $49 million.
The one bit of good news for the IRS is that it reduced its spending on conferences from approximately $37.5 million in fiscal year 2010 to $4.8 million in fiscal year 2012.
The reduced costs were largely because beginning in February 2011, the IRS issued policy directives to help minimize spending on travel and conferences. That was followed in May 2012 by Office of Management and Budget (OMB) guidelines mandating that agencies not incur net expenses greater than $500,000 for a single conference and that agencies publicly report on their official website all conference expenses in excess of $100,000.
My mom was right. Public pressure does work!
TIGTA's recommendations: The tax watchdog office recommended several fixes to guard against future egregious conference expenses. They suggest that the IRS:
- Verify that costs are being tracked for recent conferences;
- Track conference attendance;
- Ensure that applicable IRS personnel are used to plan future conferences;
- Develop procedures outlining the appropriate use of non-governmental event planners for IRS conferences;
- Establish procedures related to planning trips, information corridors, videos and other technology for future conferences;
- Evaluate whether hotel upgrades should be used for future conferences; and
- Ensure that taxable travel is identified and Forms W-2, Wage and Tax Statement, are issued to applicable employees.
The IRS, says TIGTA, agreed with all its recommendations.
IRS apology (again) and response: Following the official release of the TIGTA conference report, the IRS issued a statement in which it acknowledged the overspending, but also pointed to cost-cutting changes now in place at the agency.
"While there were legitimate reasons for holding the meeting, many of the expenses associated with it were inappropriate and should not have been incurred," according to the IRS release. "Taxpayers should take comfort in knowing that these kinds of expenses are no longer permitted and such a conference would not take place today."
The statement also noted that the agency has dramatically cut the number of meetings involving travel since 2010: "We did not hold any similar, large-scale nationwide meetings like these in 2011, 2012 or 2013, and we do not have any plans to do so going forward."
The IRS also pointed out that it is no longer using outside speakers at its conferences and training events and that it has increased the use of virtual meetings and trainings to cut costs.
As for the Anaheim event, the IRS offered the following:
- The SB/SE division accounts for the majority of the $50 billion collected in annual IRS enforcement revenue each year.
- The training was deemed necessary at the time because in 2010 almost 30 percent of the division's managers were either new to the division or new to management within the prior two years.
- The meeting also included employee safety and security training due to a substantial increase in security threats following the suicide attack on an IRS facility in Austin earlier in the year.
Thanks, IRS, for the context and elaboration. Now don't do it again!You also might find these items of interest: