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IRS Hiring Funds Diverted to Fund Conferences

Issa suggests wasteful spending on conferences contributed to scandalous targeting of conservatives

Rep. Darrell Issa / AP
• June 6, 2013 11:28 am

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A top House investigator on Thursday tied lavish, multi-million-dollar conferences held by the Internal Revenue Service to an ongoing scandal over the agency discriminating against conservative groups.

The comments came at a House Oversight and Government Reform Committee hearing on Thursday following the release of an inspector general report showing poor oversight of extremely expensive IRS training conferences.

According to the report, an IRS division transferred $3.2 million from a fund devoted to hiring employees in order to fund the conferences.

Additional money marked for training was used to fund conference logistics, which included room upgrades for top IRS officials and per diems pocketed by conference attendees.

"This hearing is about specifically spending at these conferences and waste," said Committee Chairman Darrell Issa (R., Calif.). "But on everyone’s mind is what the IRS did out in Cincinnati and Washington … to taxpayers and organizations that simply wanted to comply" with regulations governing tax-exemption.

The comment referred to revelations that officials in the Washington and Cincinnati IRS offices routinely discriminated against conservative groups that applied for tax-exempt status.

Some groups reported waiting years for the IRS to approve their tax-exempt status applications as a result of heightened scrutiny applied, as a matter of policy, to groups with names or activities that sounded conservative in nature.

Issa said IRS employees "should’ve been better trained to be able to give answers quickly. There should’ve been the employees necessary for them not to wait three years" for approval of tax-exempt status."

Instead, IRS officials used funds devoted to hiring and training to put on lavish conferences that often included superfluous activities, Issa said.

One such activity was a "Star Trek" parody video, starring Faris Fink as the Vulcan Spock. Fink, the commissioner of the IRS Small Business and Self-Employed Division, apologized for the video in testimony before the committee.

The video cost $50,187 and 62 staff hours to produce, according to IRS staff interviewed for the IG report. But "IRS management stated that this was an estimated cost and could not provide detail on how this cost was estimated," the report notes. "In addition, IRS management could not provide any supporting documentation detailing how this money was spent."

The lack of documentation was a persistent barrier to accurately and confidently assessing the actual costs of the IRS conference examined by the report.

The agency told the IG that it cost $4.1 million, but "was unable to provide documentation to support all costs associated with the conference," the report states.