Congress Criticizes IRS for Wasteful Conference Spending

Representatives from both the Republican and Democratic parties criticized the IRS on Thursday after hearing testimony on how the IRS spent over $50 million of taxpayer money on conferences between 2010 and 2012.

A representative of the IRS appeared before an oversight committee for the House of Representatives on Thursday to testify on the lavish spending.

The most egregious expenditures highlighted by the committee included a 2010 conference in California costing more than $4 million and the creation of a “Star Trek” parody training video at a cost of over $50,000.

“Not only does the IRS take your money, not give you proper answers, but then when it comes to tens of millions of dollars, use it in a way that is, at best, maliciously self-indulgent,” said Representative Darrell Issa of California.  Issa. Is the chairman of the House Oversight and Government Reform Committee.

Democratic Representative Elijah Cummings of Maryland leveled criticism at the IRS focused on the training video, noting the cost was more than many people make in a year.

The conference was held to train over 2,600 managers in two divisions of the IRS.  The $4 million in spend for the conference included over $35,000 in pre-conference trips to plan the event, over $60,000 on trinkets passed out to conference attendees, and over $125,000 on outside speakers.

Faris Fink was the head of the division that held the California conference.  During the conference, Fink stayed in a room that normally cost over $1,500 per night.  In addition, Christopher Wagner, the commissioner of the division, stayed in a presidential suite that normally cost over $3,500 per night.

While records indicated the IRS paid a flat $135 per hotel room per night, the use of the upgraded rooms by Fink and Wagner drove up the overall cost of the conference package used by the IRS.

Fink was one IRS representative who appeared before the committee.  Fink issued an apology for the expenditure as a part of his testimony, noting it was not a wise use of taxpayer funds.  However, Fink also noted that the conference “followed IRS and government procedures that were in place at the time.”

Wagner did not appear before the committee, as he retired from the IRS in 2013.

The IRS has now instituted restrictions to prevent extravagant conference expenses in the future.  In addition, the IRS has placed several officials on leave for having accepted free food while attending the conference in California.  The free food was not reflected on the W-2s of the employees, which therefore amounted to tax evasion on their part.

“When I came to IRS, part of my job was to hold people accountable,” acting IRS Commissioner Danny Werfel noted.  “There was clearly inappropriate behavior involved in this situation, and immediate action is needed.”

Werfel noted the officials on leave would likely be fired after investigation into the matter is completed.

The rampant conference spending of the IRS only added to recent frustration with the agency, as the hearing on Thursday was the seventh such conference in recent weeks on controversies involving the IRS.

Evidence surfaced in May that the IRS had targeted various conservative political organizations seeking tax-exempt status.  The targeting included delay tactics that held up applications of some organizations for years.

by Mark Johnston

Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.