IRS Events Exceeded Costs, Did Not Receive Proper Approval

Agency spent $43.7 million on conferences in 2013 and 2014

IRS Commissioner John Koskinen with the Taxpayer Bill of Rights / AP
• March 22, 2016 2:25 pm


The Internal Revenue Service hosted events that exceeded cost estimates and often failed to meet requirements for their approval, according to a report from the Treasury Inspector General for Tax Administration.

The report reviewed documentation for 650 events held by the IRS in fiscal years 2013 and 2014 and found that most were reported as required, but that some events exceeded costs or did not receive full approval.

The Office of Management and Budget set guidelines for federal agencies in May 2012 that capped expenses for a single conference at $500,000 and stipulated that conference expenses exceeding $100,000 be publicly reported on an official website and approved by the agency’s deputy secretary.

"During our review of events, we found 26 events exceeded approval costs by more than 15 percent," the audit states. "Because the IRS did not follow the requirements of the guidance for reapproval for the 26 events, an additional $245,820 was incurred without the appropriate approval."

The report also identified 45 events totaling $891,810 in costs that were not approved by the IRS Commissioner, as required.

"We found three events with costs exceeding $100,000 that were not reported to the public as required," the audit said. "Without an effective mechanism for reporting events costing more than $100,000 in a timely manner, the IRS risks noncompliance with Federal requirements for reporting of conference spending."

The audit was conducted after it was discovered that the IRS had spent more than $4 million on a conference in Anaheim, Calif. in August 2010.

"We identified questionable expenses related to the conference," the audit states.

The report found that taxpayer money had been used to purchase promotional items and gifts for IRS employees, event planners, event planning trips, and outside speakers who cost more than $100,000, among other purchases.

In 2010, the IRS spent $177.5 million on conferences, training and meetings. Since fiscal year 2010, IRS spending on conferences has declined. The IRS spent $21.5 million in 2013 and $22.2 million in 2014. The audit did not provide data for fiscal years 2011 and 2012.

While the report found that some IRS events did not receive the correct approval, the audit found that the majority of events were reported as required.

"Event spending was generally approved in an appropriate manner, ensuring proper oversight on funds expended on meeting, training, and conference events by the IRS," the report said.

Since 2010, when the IRS held the $4 million conference, the audit found that the agency had updated its policies and procedures as recommended.

"We found that the IRS has issued comprehensive guidance for event planning, approvals, and cost tracking that addresses each recommendation TIGTA made," the report said.

"We agree with the recommendations listed in the draft report and have already developed and implemented corrective actions to address them," the IRS said in response to the auditors’ recommendations.

Published under: Government Waste, IRS