This Is What The IRS Spends Your Money On

Tyler Durden's picture

Moments ago, the Treasury inspector general for tax administration, the same source as the crushing report exposing the IRS persecution of conservative groups, released a report highlighting the spending and "questionable expensing" by IRS staff who blew through $49 million across 225 conferences between 2010 and 2012. The source of the money was largely unused cash meant to hire more enforcement agents. Instead it was spent on things like the previously mentioned Star Trek parody, ad hoc drawn paintings of Abraham Lincoln and "motivational speakers" whose primary requirement is to be flown in first class.

Before getting into the details of just how the IRS spent the tax money it itself collected, here is the summary of the report:

In April 2012, the Treasury Inspector General for Tax Administration received an allegation about an August 2010 Internal Revenue Service (IRS) conference held in Anaheim, California, (hereafter referred to as the Anaheim conference or the conference) that may have involved excessive spending. The Small Business/Self-Employed (SB/SE) Division held the conference, entitled "Leading into the Future," for its entire management staff. According to information provided by the IRS, this conference was provided to 2,609 employees at an estimated cost of approximately $4.1 million.

Where did the money come from:

According to SB/SE Division management, the SB/SE Division was allocated $132.7 million in the IRS's FY 2010 budget to hire 1,315 full-time employees.

Or roughly $100,000 per agent: one can see why the IRS is incentivized to collect as much as possible. After all, any leftover cash will be promptly spent on "conventions."

So what exactly was the cash used for?

First, here is the breakdown of all IRS conferences in the period 2010-2012. 225 conferences in 3 years (over 70 per year), costing $48.6 million, averaging $216,141 each. Morale at the IRS must truly have been abysmal if it needs this much "group-building" activity and entertainment.

Narrowing it down to the infamous Anaheim conference:

Drilling down some more, here is how much just the guest speakers were paid at the same conference:

The motivational level must have been at all time highs. But it gets better:

For the conference, SB/SE Division management contracted with 15 outside speakers for presentations at a total cost of $135,350.... One keynote speaker was contracted to perform two keynote speeches that lasted approximately one hour each, and the speaker was paid $17,000. According to the contract signed by the IRS, this speaker was "uniquely qualified to deliver this presentation because of the combination of his artistic abilities and his presentation skills. In each presentation, he will create a unique painting that reinforces his message of unlearning the rules, breaking the boundaries, and freeing the thought process to find creative solutions to challenges."

The speaker was Eric Wahl: "artist, author, performer." More importantly, he is an artist:

The speaker created six paintings at these two keynote sessions (three at each session). These paintings consisted of the following portraits: Albert Einstein (one); Michael Jordan (one); Abraham Lincoln (one); U2 singer Bono (one); and the Statute of Liberty (two).

 

At each session, one attendee was selected by the speaker and presented with one of the paintings. SB/SE Division management indicated that three paintings were donated to the Combined Federal Campaign as auction items (these paintings were sold for $75, $130, and $380). SB/SE Division management stated that the final painting prepared during these presentations was lost. Figure 2 shows an example of a painting prepared during the conference.

 

 

The second keynote speaker was paid $27,500 (including travel expenses) for two speeches lasting approximately one hour each. According to the contract signed by the IRS, this speaker was uniquely qualified because the presentation was based on a book published by the speaker, and the speaker "will share how seemingly random combinations of ideas can drive radical innovations. His concept of Intersectional Ideas illustrates how ideas from different fields can be combined to generate new solutions to existing challenges. According to the contract, this speaker's fee of $27,500 included a $2,500 flat fee for travel, which the contracting officer authorized to accommodate first-class travel. "

The speaker in question is this Frans Johannson. According to this twitter profile, he is "the author of The Medici Effect and The Click Moment, dragon slayer, innovation thought leader, speaker and CEO of The Medici Group."

This, ladies and gentlemen, is what is known as the public sector trickle-down effect, which keeps motivational speakers (and artists) among the 1%.

...

Next we get to the infamous Star Trek Video...

As previously stated, the IRS reported that it expended $50,187 on "videos" for the conference, but was unable to provide any details supporting this cost. We determined that SB/SE Division management showed several videos at the conference, including a Star Trek parody and another video entitled "SB/SE Shuffle."

 

The conference theme was "Leading into the Future," with a Star Trek parody video shown at the beginning of the conference. This video consisted of a scripted presentation featuring SB/SE Division executives portraying Star Trek characters in a tax-themed parody.

 

SB/SE Division management stated that the purpose of the video was to open the conference by highlighting "current issues facing the IRS and SB/SE [Division] in the leadership arena and set the stage for the many topics being covered at the conference." According to SB/SE Division management, the SB/SE Division Commissioner verbally approved the creation of the video.

 

Although SB/SE Division management did not track a specific cost associated with producing the Star Trek video, we determined the following:

  • The Star Trek video was approximately 5 minutes and 40 seconds long and featured SB/SE Division executives in Star Trek costumes on a mock set of the Starship Enterprise. Per the SB/SE Division, employees purchased the costumes using personal funds.
  • The IRS constructed a mock set at its television studio located in New Carrollton, Maryland, at a cost of $2,400. However, SB/SE Division  management  does not have any documentation supporting this amount.
  • IRS personnel located at its New Carrollton television studio worked on the video production. The average grade for these IRS employees was a General  Schedule-14.
  • The SB/SE Division estimated that it takes 11 hours of staff work to produce one minute of finished video. Based on the length of the Star Trek  video,  we estimate it took approximately 62 staff hours to produce the final video. At a minimum hourly rate of 50.00 for a General Schedule-14 employee, this converts to approximately $3,100 in staff time.
  • No documentation was maintained to track any costs associated with the development of the other production costs, such as the script development, makeup, lighting, and videotaping.

... Then on to lodgings:

As part of the Letters of Intent with the hotels, the IRS received a certain number of free rooms per night as well as suite upgrades that were used by IRS personnel. Federal employees traveling for work are paid for their lodging costs plus a fixed amount for meals (per diem). As part of the agreement, the hotels charged the IRS the Federal Government rate of $135 per night for all rooms (including suites) provided.

 

Specifically, the Letters of Intent indicate that 93 suite upgrades were provided by the Hilton, 33 by the Marriott, and six by the Sheraton each night of the conference. This represents 4.7 percent of the 2,830 rooms that the hotels agreed to reserve in the Letters of Intent.

 

Although the per diem rate of $135 was charged by the hotels, we determined the rack rates13 for the upgraded rooms provided ranged from $299 per night to $1,500 per night, depending on the room and the hotel. For example, the Commissioner, SB/SE Division, stayed five nights in a Presidential Suite at the Marriott. This room is described as having a private bedroom, living area, conference table, wet bar, and billiard table. We spoke with a Marriott representative who stated that this suite currently retails for $3,500 per night."

The IRS per diem...

Federal employees traveling for work are paid a fixed amount for meals (per diem). In Calendar Year 2010, the meal and incidental expenses allowance for Anaheim, California, was $71 per day. According to the Federal Travel Regulations, employees are not required to reduce their per diem reimbursement for complimentary meals provided by a hotel or motel.

And so on. Much more in the full report below.

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Gringo Viejo's picture

As long as you have sports and beer, nobody's gonna give a shit. That comes when peoples' children start going hungry.
We're not there yet.

flacon's picture

Does the IRS pay taxes or is that like asking if Public Servants pay taxes? What did Ben Bernanke's tax return look like? If I rob my right hand to pay to my left hand do I become wealthy?

MillionDollarBonus_'s picture

At least the IRS keep their books in order, unlike many ‘small businesses’ that routinely fail to comply with accounting regulations, creating miles of red tape for auditors. There are certain areas in which we need entrepreneurship, such as in green technologies. But most of today's 'small businesses' are a net cost to society because they have to be constantly monitored and audited by regulators. 

CH1's picture

Lick your overlord's feet, slave!

francis_sawyer's picture

Jump  to    bitcoins ............      Make     yourself      some     tax      free        capital         gains...          Then    ~~~       brag       about      it         on a public              internet                  blog...         

Go Tribe's picture

Basically those fucks do no work. One day, one day....

nmewn's picture

"The speaker was Eric Wahl: "artist, author, performer." More importantly, he is an artist:"

Whoop...and there's a little shadow living outside the sunlight, its too bright for him, he lives right there...there...in the tree...someplaces the tree goes down...sometimes it goes up...isn't he a cute little rascal?...yes, thats fun.

http://www.youtube.com/watch?v=BHZgjQMxlJo

 

StychoKiller's picture

Bob Ross was an amazing guy, despite the "happy clouds" and friendly bushes/trees.

nmewn's picture

Yes, he was. I would catch him occasionally while I was channel surfing, pause and watch. I enjoy art, mostly because I'm not much of an artist...lol.

Still, I wouldn't pay anyone 17k just to watch them paint ;-)

Gringo Viejo's picture

@ MDB It's a given tenet of psychiatry that those incapable of positive social interaction, seek out negative attention as opposed to having none at all.

CrimsonAvenger's picture

Keeps their books in order? Maybe you didn't read down far enough to see how they failed to keep documentation on many of their expenses, something they would crucify you or me for doing (okay, maybe not you).

Buckaroo Banzai's picture

MDB is a benign troll. You've been had.

tenpanhandle's picture

I still dislike him.  He (whatever) is a douche.

Bay of Pigs's picture

Easy now, he's a Tyler(s) sock puppet.

All in good fun...where do think most of us learned how to spot trolls and sarc it up?

EvlTheCat's picture

I hope you stabbed yourself in the eye after you wrote that crap.  Satirical or not, you assume the miles of red tape are created by the 'small business' owners?  I don't remember the little guy being asked to share his fountain of knowledge when the tax code was being aborted to life.

Roandavid's picture

That there is pure unadulterated trolling brilliance, even by MDB's exhaulted standard.

shovelhead's picture

Shhh.

I like watching the puppies chase the little red laser dot.

Kirk2NCC1701's picture

Technically, MDB is correct.  But... that's because of the "Few Rotten Apples..." syndrome, that's causing them to 'discriminate'.  Also, there are a LOT more small businesses than medium or large businesses.  So it becomes a math/stats exercise. Nothing to get overly excited over. 

Our issues with the IRS are more fundamental, in that they are the "Enforcers" for the NY Financial Mob.

Dave Thomas's picture

I can't believe you're so racist MDB, those cashed based Nail Salons and Taco Vending wagons are the spice and diversity that makes American small buisiness great.

Here's what Herr MDB Really wants to say:

But most of today's 'Minority off the Books businesses' are a net cost to society because they have to be constantly monitored and audited by regulators.

jumbo maverick's picture

MDB this was by far your greatest effort yet. Your last sentence really nailed it. If people don't get you from that then they never will.

Slightly Insane's picture

Million Dollar Shit For Brains .... the IRS can do whatever the fuck it wants .... they don't have to keep "books" you shit for brains .... they collect taxes .... plain and simple!  There are no laws that they follow .... they are immune to everything and everyone!

I wish the fuck you and your green technology would take a hike!  (Get a fucking engineering degree, then come back to me on your Green Technology .... monitor that you slackjawed, 70 IQ, government asshole .... "Wesley Mouch douchebag").

nmewn's picture

"At least the IRS keep their books in order, unlike many ‘small businesses’ that routinely fail to comply with accounting regulations, creating miles of red tape for auditors."

The IRS doesn't even know the difference between 501(c)(3)'s & 4's & 5's...or they do and became criminals.

http://www.youtube.com/watch?v=UE4_MT8MkIA

BigSpruce's picture

Coming from the mouth of someone with his belly full - all made possible by numerous small business and the free market. Do us all a favor cunt and shut the fuck up !

BigSpruce's picture

Coming from the mouth of someone whose belly is full - thanks in part to numerous small businesses and the free market. Do us all a favor and get lost - you fuckn statist!

Dick Buttkiss's picture

Nice one, MDB.  All your downvotes would be upvotes if they got your sarc, but they don't.

Discouraging, considering how long you've been doing this and the presumed level of intelligence on ZH.

esum's picture

MDB...

 

 

 

 

Small businesses make up:

99.7 percent of U.S. employer firms,

64 percent of net new private-sector

 

jobs,

49.2 percent of private-sector employment,

42.9 percent of private-sector payroll,

46 percent of private-sector output,

43 percent of high-tech employment,

98 percent of firms exporting goods, and

33 percent of exporting value.

 

Source: U.S. Census Bureau, SUSB, CPS; International Trade Administration; Bureau of Labor Statistics, BED; Advocacy-funded research,

 

 

 

 

Richard Chesler's picture

Executing Obozo's corrupt agenda has its privileges.

sgorem's picture

LONG LIVE ANDREW JOSEPH STACK III....................................

bigrooster's picture

Someone needs to audit those assholes!

20834A's picture

And they have NO DOCUMENTATION of some expenses?! WTF?

CH1's picture

Agreed, but why should they give a shit? Everyone will comply just the same.

Until people cease to obey, they have no reason to change.

Buckaroo Banzai's picture

This is all a fucking sideshow. Instead of being outraged at how much the IRS wastes, and how politically corrupt they are, we need to be outraged at the very existence of a tax on wages in the first place.

This is a classic Hegelian-style distraction/diversion.

THESIS: The IRS is wasteful and corrupt

ANTITHESIS: The IRS must be reformed

SYNTHESIS: A "flat tax" on wages will be proposed, and maybe even passed, in order to make the IRS "more fair". Those who question the legitimacy of the tax itself will be marginalized.

Liquid Courage's picture

But the tax on wages is temporary. I'm sure they'll rescind it any day now just like they promised.

Freedom In Your Lifetime's picture

I really wish more people understood this. Fucking corrupt ass organization in a corrupt as government and people don't even realize it.

HelluvaEngineer's picture

Man, I hope they don't get audited!

kralizec's picture

What is SB/SE?  Sucking Butts and Shooting Excrement?

ElvisDog's picture

Well, hookers don't generally give you documentation of their expenses.....

tenpanhandle's picture

Call Girl Principle:  "The value of the services rapidly diminish after the service has been performed."  I think that is a FASB rule.

 ...therefore after the fact, zero is the value reported.

Dewey Cheatum Howe's picture

And spending 60,000 (small change) in the scheme of things for professional training videos spoofing pop culture like Star Trek here.

https://www.youtube.com/watch?feature=player_embedded&v=VxU6n4pAnrU

This so bad it is almost entertaining but not quite there like Super Infra-Man.

Evil Bugeyes's picture

The IRS spends money intended to hire more enforcement agents on Star Trek videos? That is actually a good thing.

20834A's picture

Until their apologists whine that they screwed up on the 501c's because the task was too big and manpower too small. "Shovel more money to us, chum...citizens, we're drowning here."

bonin006's picture

Finally, someone sees clearly.

Jena's picture

"More importantly, he is an artist"

This is what gives some of those kids getting their BAs and MFAs hope.

PiltdownMan's picture

Hunting me down?

jcaz's picture

LOL- $6K spent on lanyards and badgeholders-  sweeet!!!