The U.S. Internal Revenue Service has been embroiled in controversy for around a month now, with reports of lavish spending as well as ‘mistreatment’ of conservative groups shaming the agency. All of this has happened quickly, and with hearings commencing on Capitol Hill, here’s a recap of why the IRS is a complete hot mess right now:
1. Livin’ Large
The IRS has been quite loose with the very tax money it collects, with reports surfacing recently that $50 million was spent on employee conferences. That money accounted for 220 conferences between 2010 and 2012; a period of time in which the IRS failed to negotiate for discounted rooms — a standard procedure for the government — purchased baseball tickets for its employees, and spent $135,000 on speakers, including one on the topic of “leadership through art” for the price of $17,000. Many employees were also upgraded to presidential suites at the conferences that ranged from $1,500 to $3,500 per night.
2. FBI Probe
The U.S. Federal Bureau of Investigation has announced it will launch a criminal probe of the IRS following the revelation that the agency had been inappropriately targeting conservative groups during the 2012 election as they sought to obtain tax-exempt status. President Barack Obama has declared this behavior “intolerable and inexcusable” amid an investigative report that found this activity continued uninterrupted for 18 months. Attorney General Eric Holder told the press: “The FBI is coordinating with the Justice Department to see if any laws were broken in connection with those matters related to the IRS.” Groups were targeted based on certain criteria, including containing the phrases “Tea Party” and “Patriot.”
3. Asking for More
Since the passage of the healthcare law, the IRS is finding itself strapped with new responsibilities, as the Patient and Affordable Care Act implements new taxes in a variety of forms. As such, the agency has asked for $1 billion to aid its expanded duties in implementing the law amid findings of excess spending and misbehavior. This funding increase on the rocks now, with Rep. Hal Rogers (R-Ky.) saying: “The power of the purse rests in Congress. We’re prepared to use that purse to get to the truth.”
4. Inspector General’s Report
A report by the Treasury Inspector General for Tax Administration detailed the abundant spending at the IRS from 2010 to 2012, and highlighted a “Star Trek” training video being made, as well as accusing the agency of failing to lower its own costs. The IRS reported that it spent over $50,000 on the production of videos, including the “Star Trek” parody, although the report shows that the IRS did not keep any documentation related to the costs of these productions. Specifically, no documentation was maintained to track the expenditures for, “script development, makeup, lighting, and videotaping,” resulting in the report recommending more stringent procedures on the production of training videos, and the monitoring of their costs.
5. Apologizing for the Past
Danny Werfel, upon assuming the role of acting IRS commissioner, was also placed in the role of chief apologizer, being forced to take responsibility for the wrongs of his predecessors. Werfel admitted the problems from the inspector general’s report, and conceded that public confidence in his agency was damaged. He even went so far as to suggest the agency didn’t need more money at this time. “If you start with more money, it’s the wrong starting point,” he said when discussing how to fix the agencies problems.
6. Change of Stories
The IRS initially reported that the actions against conservatives taken by the Cincinnati office were their own initiative, and that Washington had no part in the behavior. However, Rep. Darrell Issa (R-Calif.) is intent on proving that this is not the case, even accusing the White House Press Secretary Jay Carney of being a “paid liar.” Cincinnati employees have indicated through interviews to House committees that their actions were induced by orders from Washington. Issa has since claimed that Lois Lerner, head of the tax-exempt division which oversaw the scandal, invoked her Fifth Amendment rights, “not because there’s a rogue in Cincinnati, it’s because this is a problem that was coordinated in all likelihood right out of Washington headquarters And we’re getting to proving it.”