Senate Report Finds IRS Agents Living Large on the Public’s Dime

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Tax Revolution Institute – by Guillermo Jimenez

What once could be criticized as disregard for the American taxpayer can now only be viewed as disdain.

More evidence of the Internal Revenue Service’s frivolous spending continues to be unearthed, and the picture it paints of the agency’s wasteful habits has gone from ludicrous to obscene.  

The Senate Finance Committee has released a report detailing the long-term travel costs for IRS employees in 2015. For just 27 workers, the IRS spent more than $1.4 million on “luxury” hotels and apartments and high-end car services. According to the report, these employees traveled 125 business days or more, and “the average cost of each trip was approximately $52,800 with an average trip length of 207 days.”

The committee points out that federal guidelines dictate that employees “must exercise the same care in incurring expenses that a prudent person would exercise if traveling on personal business,” and yet a review of the IRS’s travel receipts reveal anything but “prudent” behavior.

“Although the IRS has a number of employees who travel more than half of the fiscal year,” the Senate report states, “the IRS has not routinely taken the steps allowable to reduce its travel related per diem expenditures.”

The report also notes that the IRS currently has several executive-level employees who are still not “geographically located where their primary job duties are.” In fact, the committee found that more than half of the long-term travel time for agency workers was spent in the DC area.

In short, the IRS has failed to live up to its own rules regarding travel expenses at a tremendous cost to the American public. The committee found evidence of IRS employees living the high life, milking their lavish — yet “allowable” — per diem rates. Employees who travel to Washington are allowed to spent up to $7,099 per month on housing alone. If that figure seems exceptionally high, the Senate committee would agree, stating that it sees “virtually no circumstance where an employee living in Washington” would need such a large amount for rent on a month to month basis.

Several IRS employees, however, found a way to do just that. The committee’s inquiry discovered five IRS employees living in expensive hotels, including one who spent more than five months at the Grand Hyatt in DC at a total cost to taxpayers of $38,799. Another spent $72,544 for the year as he “moved among several hotels in the Washington area,” including $43,726 on the Ritz Carlton alone. Three other workers lived primarily out of the Grand Hyatt, Mayflower Hotel, and the JW Marriott.

And that’s not all. The report also highlights two other indulgent IRS workers: one who rented a $1.07 million, four-bedroom home in Arlington, VA, at a rate of $4,950 per month, and another who spent $4,605 per month on a luxury apartment in downtown Chicago, overlooking the Chicago River.

Of course, travel expenses require more than just housing itself, and the committee’s report goes on to list several other peripheral costs — such as laundry, internet bills, taxis, “black car” services, and metro cards — that further condemn the IRS’s fast and loose spending.

The committee concludes its report by urging the IRS to follow federal guidelines regarding these sorts of expenses, including their own internal travel policies. The committee says the IRS must “better emphasize the personal responsibility of each and every IRS employee to spend taxpayer funds as they would their own.”

The committee also says that it “hopes” that the IRS will “voluntarily” adopt some of the best practices and recommendations described in their report and improve its behavior. But one wonders if this is even possible.

As with most, if not all, federal agencies, the IRS has shown to be incapable of policing itself and has long lost the privilege of calling for the public’s trust. Recent examples of excess and waste abound, including reports of the agency’s multi-million-dollar conferences, costly furniture purchases, thousands lost on ridiculous Star Trek parody videos, and many more millions squandered on obsolete computer operating systems and “useless” email upgrades.

While the public has every right to be shocked and dismayed, we can no longer claim to be surprised. Shaming the IRS into following their own rules simply doesn’t work. It’s a strategy that has failed over and over again, and it’s enough to ask ourselves whether the time has come to reexamine this entire system.

If an agency, company, or other entity can sustain itself through state welfare — a seemingly bottomless well of funds derived from compulsory tax money — with zero competition or consequences for its actions, what incentive does it have to curb its spending or improve its behavior? Is this really the best we can do?

Tax Revolution Institute

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