IRS Says IRS Conferences Followed IRS Rules

The IRS spent $50 million on 225 employee conferences. What did the taxpayer get in return?


irs-star-trek-video

The very expensive IRS conferences that have come under scrutiny followed IRS guidelines, the IRS assures us.

AP (“IRS official: Lavish conference followed IRS rules“):

An Internal Revenue Service official at the center of the agency’s latest scandal told lawmakers Thursday that an expensive conference held in 2010 conformed to existing rules, though he acknowledged it was not the best use of taxpayer money.

The official, Faris Fink, said spending at the $4.1 million gathering should have been more closely scrutinized, and that new rules would prevent such a conference today.

“I think it is important to point out that in carrying out this 2010 meeting, we followed IRS and government procedures that were in place at the time,” Fink told the House Oversight and Government Reform Committee.

In 2010, Fink was a top deputy in the IRS small business and self-employed division, which staged the conference. A 32-year IRS employee, Fink was promoted to lead the division in 2011.

“The Treasury inspector general’s office review found no instances of fraud,” Fink told lawmakers. “But we are now in a very different environment and there are many new procedures in place at the IRS governing training and travel.”

The hearing focused on a new report by the IRS inspector general that said the IRS spent nearly $50 million on 225 employee conferences from 2010 through 2012. The 2010 conference in Anaheim, Calif., attended by 2,600 IRS managers from across the country, was the most expensive.

At that conference, Fink stayed in a luxury suite and starred in a cheesy but slickly-produced “Star Trek” video filmed by IRS employees.

From the witness table, Fink watched the video screen in the hearing room without expression as excerpts played showing him in his role as Mr. Spock.

The IRS spent more than $50,000 to produce three videos that were shown at the conference, the report said, including the “Star Trek” parody.

“What were you thinking?” asked the committee chairman, Rep. Darrell Issa, R-Calif.

Fink said the videos were “a well-intentioned” attempt at humor, shown at the opening and closing of the conference.

“They would not occur today, based on all the guidelines that exist and frankly, they were not appropriate at that time, either,” Fink said. “The fact of the matter is, it’s embarrassing, and I apologize.”

There have been a handful of flaps recently involving lavish conferences involving government employees from various agencies. These sort of spoof videos, too, have been in the news.

Certainly, at least on the surface, the costs seem excessive. Federal employees are expected to be prudent stewards of our money. We shouldn’t expect them to double-bunk it at the local La Quinta; but not should they be staying in the penthouse at the Waldorf-Astoria.

At the same time, without more information on how the monies were spent, it’s tough to make a real assessment. $4.1 million is a lot of money. But it hosted 2100 management level employees, thus translating to $1577 per manager. That’s not exactly thrifty. But: How long was the conference? What was gained by hosting the conference? Does the cost include simply transportation, food, lodging, and whatever incidentals come from the conference itself? Or does it also include the prorated portion of the employee salaries?

Similarly, “$50 million on 225 employee conferences from 2010 through 2012” sounds outrageous. First off, do we really need to host 75 conferences a year for IRS employees? For what? Most professionals attend no more than one or two conferences a year. Second, are we getting $50 million in value for them?

The frustrating thing about all this is that we’re only focusing on the numbers and the silly videos (i.e., the costs) while ignoring the other side of the equation (i.e., the benefits). We simply don’t have enough information to assess the “scandal” without the latter.

FILED UNDER: Economics and Business, Government
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Matt Bernius says:

    The frustrating thing about all this is that we’re only focusing on the numbers and the silly videos (i.e., the costs) while ignoring the other side of the equation (i.e., the benefits). We simply don’t have enough information to assess the “scandal” without the latter.

    This mirrors the issue with the investigation into The Exempt Organizations office.

    For example, without additional data on the make up of all the applications that were held for specialist review, we can’t know the extent of the “bias.” Unfortunately, a lot of that data cannot be publicly released.

    “The Treasury inspector general’s office review found no instances of fraud,” Fink told lawmakers. “But we are now in a very different environment and there are many new procedures in place at the IRS governing training and travel.”

    I think this quote sums up many of the issues in both cases. While “inappropriate actions” were taken, there’s very little evidence of actual crimes being committed. Unfortunately, the public actions of the House Committees suggest that they are far more interested in chasing scandals than actually attempting to fix the underlying problems.

  2. john personna says:

    Always remember the tanks.

    Army says no to more tanks, but Congress insists

    I’d love to have an IRS guy say “but Senator, you spent $436 million on a weapon the experts explicitly say is not needed” … and you are talking to me about a $1,600 video?”

    Seriously?

  3. beth says:

    I think this is going to turn out to be the $16 muffin story all over again. It seems like the IRS, and most government agencies, have to go through the same process that private industry went through in finding ways to reduce training, travel and conference expenses and still keeping a well trained and motivated workforce. As usual, the government seems to be lagging behing private business by a few years.

  4. Rafer Janders says:

    Similarly, “$50 million on 225 employee conferences from 2010 through 2012″ sounds outrageous.

    Umm, what? No it doesn’t sound expensive at all relative to the size of either the US government or the IRS, or the amount of revenue that the IRS brings in. That averages out to $222,222 per conference, which isn’t really all that much money.

    I mean, for god’s sake, we spend $8 billion A MONTH in Afghanistan, which comes out to about $266 million PER DAY, and all of that is entirely wasted. $50 million doesn’t even pay for SIX HOURS of occupation costs in Afghanistan, and at least for $50 million spent on conferenceS we have some well-trained federal employees performing a crucial function.

    I mean, guys, c’mon, talk about not seeing the forest for the trees.

  5. Rafer Janders says:

    $4.1 million is a lot of money.@beth:

    I think this is going to turn out to be the $16 muffin story all over again.

    You know the $16 muffin story turned out to be a fake, right? That there was no $16 muffin, but rather that $16 was the cost of the entire breakfast per person?

  6. MarkedMan says:

    Beth’s quote is an indication of the problem. The $16 muffin was thoroughly and completely debunked but it is still taken as gospel by a significant segment of the population.

  7. rudderpedals says:

    Whether the $16 muffin story is true or not is a don’t care, the story’s out there. Cokie’s Rule.

  8. Anon says:

    Let’s say it were a 2 day conference. Then there needed to be 2-3 nights lodging, plus food, plus airfare, plus paying for the conference venue itself. $1600 might not be as low as it could be, but I doubt it could go much lower. For an academic conference (3-4 days), $1600 is reasonable, and can be much higher if international. The registration is typically $500-700, which pays for food during the day, and typically one dinner, plus all other expenses incurred by the conference itself. (I’ve helped run one before, and these conferences don’t make money, but more or less break even.) Lodging could be $150/night, easily. Airfare depends on the destination, of course.

  9. Rafer Janders says:

    Let’s also remember that in an open economy your spending is my income and my income is your spending.

    So $50 million over three years wasn’t just set on fire, it was actually paid to American businesses for goods and services delivered. It went to airlines, hotels, restaurants, conference centers, taxis, etc. etc., and then those businesses paid their employees such as waiters, caterers, bartenders, tech people, videographers, drivers, etc., and then those people took that money and spent it on restaurant meals and vacations and car repairs and mortgages and tuition payments, and ultimately that money had a multiplier effect and came back to the federal government in the form of taxes.

    If the IRS hadn’t spent that money, then none of those people would have been paid, and ultimately we’d all be poorer for it. Unlike the $50 million we waste every seven to eight hours in Afghanistan, which is money that may as well just be lit on fire since most of it is never coming back to the US economy.

  10. Rafer Janders says:

    Similarly, “$50 million on 225 employee conferences from 2010 through 2012″ sounds outrageous.

    Scale. The IRS spending $50 million over three years is like me spending, what, 0.75 cents over three years — it’s not exactly a lot of money.

  11. anjin-San says:

    How much have Republicans in congress spent on meaningless votes against Obamacare?

  12. JKB says:

    @Rafer Janders: No it doesn’t sound expensive at all relative to the size of either the US government or the IRS, or the amount of revenue that the IRS brings in.

    First off, the IRS doesn’t bring in revenue. They are accounting and that is a cost center. Now, they are very aggressive in going after delinquent accounts and even finding new ways to deny deductions.

    And like James says, comparing the cost to the federal budget, even the IRS budget is not on point. What did the citizens, i.e., taxpayers, get from this luxury expense by so-called public servants.

  13. JKB says:

    Irony – The whole conference scheme, especially those not oriented toward marketing and sales, all came about as a way for corporate men to retain the quality of life they lost when the income tax took a bite out of the middle class. Same with the working lunch, etc. Many corporate employees enjoy life far above their salary.

    True the IRS caught on to the scheme and enforce limits on it. But government workers, e.g. the IRS, see the lavish corporate conferences and feel they are missing out. So they adopted the team-building conference, the regional manager’s conference, etc. Which always seem to happen in warm, touristy locales.

  14. Console says:

    @JKB:

    I’ve always felt that government suffers even more from it because it has an abundance of managers. The consequences of the scrutiny of the public sector combined with the way federal salaries flatten out at the top means even more managers and supervisors than your typical business.

  15. Rafer Janders says:

    @JKB:

    What did the citizens, i.e., taxpayers, get from this luxury expense by so-called public servants.

    Well, like I said, that $50 million over three years was paid out entirely to American businesses, which used that money to pay their employees, which used that money to spend on other American businesses, which all eventually paid part of that back in taxes. So the American taxpayer got (a) training for IRS agents and (b) $50 million dollars of stimulus injected straight into the American economy.

  16. Tyrell says:

    Close down the IRS.

  17. Rafer Janders says:

    @JKB:

    The whole conference scheme, especially those not oriented toward marketing and sales, all came about as a way for corporate men to retain the quality of life they lost when the income tax took a bite out of the middle class.

    The income tax never took a bite out of the middle class. Taxes are at historic lows compared to past periods.

  18. Rafer Janders says:

    @Tyrell:

    You are a moron.

  19. anjin-san says:

    @ Tyrell

    Move to Somalia. No IRS there.

  20. JKB says:

    @Rafer Janders:

    You seem confused. The US government spends more money than it takes in. The money you claim the IRS stimulated the economy with would have been spent by the government for something. Yes, the could have done something crazy like just not borrow as much but then some investor would spend their money for something other than US government bonds.

    As for training, oddly none of the training for IRS employees seems to have involved how to properly do their job in relation to tax exempt organizations or even basic statistics and sampling techniques.