The Internal Revenue Service (IRS) has come under scrutiny after a report revealed that the tax agency has spent excessively on conferences for staff. The Treasury Inspector General for Tax Administration (TIGTA), Russell George, discovered that the IRS spent $4.1 million of taxpayer dollars on a single conference for employees in 2010, which included $64,000 in promotional products and gifts.
The May 31 report, “Review on the August 2010 Small Business/Self-Employed Division’s Conference in Anaheim, California,” investigated IRS expenditures for the three-day conference that hosted 2,600 employees and found that the agency violated its own policies in booking accommodations. “Certain of the IRS’s expenses associated with the Anaheim conference do not appear to be a good use of taxpayer funds,” George said.
Among the costs that the TIGTA found questionable were $135,000 in speaking fees, $50,000 for promotional videos, and the use of outside event planners who booked rooms without trying to secure the lowest rates, securing themselves $133,000 commission from the hotels. Including the Anaheim event, the report found that the IRS spent more than $49 million on 225 conferences for staff between 2010 and 2012.
The report also highlights the costs for promotional products used during the event. More than $64,000 was spent on incentive items for the conference, including:
- 2,804 “brief bags” with an imprinted logo were provided to all attendees at an estimated cost of $15,669. The logo on each bag included the caption “Leading into the Future,” the theme of the conference.
- 2,800 hard-covered spiral journals with a conference logo imprinted on the front and the hotels’ and event planners’ logos on the inside cover. The IRS paid $2,449 for 505 journals, with an additional $13,064 paid by the hotels, the event planners, and the Anaheim Convention and Visitors Bureau.
- 800 lanyards, 75 travel mugs, and 75 picture frames/clocks with the SB/SE Division logo, along with an unknown number of imprinted portfolios, sticky note pads, bookmarks, and retractable badge holders with a reported cost totaling approximately $19,210.
- Various promotional items totaling approximately $27,000 were provided at the information corridor booths. These included items such as “engraved pens/badge holders, give-away items from Oriental Trading, promotional pens/printing poster/web cams, and imprinted can coolers/post-it notes.”
“We did not identify any guidance at the time of the conference outlining the purchase of gift items/mementos for conferences sponsored by the IRS,” the report noted. The IRS adopted guidance that would discontinue the purchase of promotional products for conferences in October 2012.
In a blog post, PPAI president and CEO Paul Bellantone, CAE, commented on news reports focusing on the money spent by the IRS on promotions for the conference. “I, like many of you, was disappointed by the IRS’ conduct of late, but I was dismayed by the ensuing media portrayal of our industry,” he said. “Simply because our products are tangible, memorable and long-lasting—all attributes that contribute to their effectiveness—they are easy targets for sound bites.”
“However, it is important to realize that the media coverage was not an attack on the promotional products industry, but rather focused on the IRS,” he added. The investigation into the IRS’s excessive spending is part of a larger crackdown on government agency budgets. In April 2012, the U.S. Inspector General found that the General Services Administration (GSA) spent $822,000 on a single conference, which lead to numerous investigations and personnel changes in that administration.
When questioned by Congress about the convention, Faris Fink, commissioner of the IRS’ Small Business and Self-Employment Division, said “The fact of the matter is, Mr. Chairman, it’s embarrassing, I apologize.”
