What Does the IRS Have to Say For Itself About Those Lavish Conferences?

Niraj Chokshi

You've probably heard about the Tuesday report that found that the IRS spent millions of dollars on conferences from 2010 to 2012, but what does the IRS have to say for itself? It turns out an initial response to a draft of the report is included in the report itself, right at the very end.

The eleventh and final appendix item in the report is an April 29 letter from the Chief Financial Officer Pamela LaRue responding to the Treasury Inspector General's finding that the IRS spent $49 million on 225 conferences over that time period. The report highlights one conference in particular, a $4.9 million event hosted in 2010 in Anaheim, California. LaRue doesn't outright deny the spending, but seeks to explain it and how recent changes would prevent it from happening today. Here's what she had to say:

There were a lot of new people to train:

The [Small Business/Self-Employed] Division comprises almost one-third of the total IRS work force and includes our largest enforcement staff, providing for the majority of the approximately $50 billion in annual enforcement revenue that the IRS collects. ... At the time of this conference, almost 30 percent of SB/SE managers were either new to the division or new to management within the prior two years.

There's more oversight now:

[D]uring the past three years, the IRS has put in place an extensive series of procedures with regard to conferences. ... [T]he IRS has elevated the conference approval processes so that all large meetings must be approved centrally and not solely by individual business units.

Still, that meeting was an aberration and spending is way down:

[T]he number of large meetings decreased 84 percent between Fiscal Year (FY) 2010 and FY 2012. The costs of these meetings decreased 87 percent over that time period. Costs for FY 2013 will be even lower.

Training and travel expenses are down:

To date, our travel and training expenses are down more than 80 percent since FY 2010. In fact, in FY 2012, more than 90 percent of our training courses were delivered virtually. Compared with FY 2010, the percentage of training hours delivered online has nearly doubled and our cost per hour of overall training has been reduced by 46 percent.

Most of the cost was for travel and per diem payments:

[I]t is important to note that the vast majority of the cost—more than 90 percent—resulted from travel and authorized government per diem for the attendees. Although the average cost per attendee was reasonable, the IRS recognizes that a number of less significant costs warranted additional scrutiny and were no the best use of government resources.