Media IRS Scandals

[Samstwitch]

Every day more dirt is surfacing.

IRS Obamacare officials placed on leave for accepting food and gifts

Just as President Obama is about to deliver a report card on his health-care overhaul initiative, two Internal Revenue Service officials charged with implementing the plan have been placed on administrative leave for accepting free food and gifts, according to reports.

The Hill reported late Wednesday that Fred Schindler and Donald Toda are accused of accepting more than $1,100 in food and gifts during a 2010 conference in Anaheim, Calif. Schindler reportedly is a top aide to Sarah Hall Ingram, chief of the IRS’s health-care office. She also presided over the office that approved tax exemptions when conservative groups allegedly were targeted.

The conference was one of several events for which the agency is under fire. IRS officials are accused of spending nearly $49 million on more than 200 conferences from 2010 to 2012. Bloomberg reported late Wednesday that the Anaheim event was one of the most expensive, hosting 2,600 IRS employees.

Acting IRS Commissioner Danny Werfel said the conference was geared to train new managers of the agency’s auditing group, many of whom were relatively new at the time, on employee safety and security training. There had been a suicide attack on an Austin IRS facility earlier that year.

In a prepared statement, Werfel said that while the purpose of the trip was legitimate, many of the expenses were not. He vowed that practice would not continue.

“This conference is an unfortunate vestige from a prior era. While there were legitimate reasons for holding the meeting, many of the expenses associated with it were inappropriate and should not have occurred,” Werfel said.

 

[Samstwitch]

IRS Targets Conservative Groups

IRS Scandal - President Obama loses Chris Matthews

 

[Samstwitch]

IRS worker blasts Lerner for blaming Ohio office on targeting, likens effort to 'nuclear strike'

An IRS agent in the embattled Cincinnati office is lashing out at the agency's managers for pinning the blame on them for the targeting of conservative groups, describing one official's attempt to pass the blame as a "nuclear strike on us."

According to transcripts of interviews that House investigators conducted with two Cincinnati office employees and which Fox News reviewed, agent Elizabeth Hofacre claimed that the idea this program was the work of two rogue agents is "absurd."

She said that when Lois Lerner, the high-level official who oversaw the Cincinnati unit and is now on leave over the scandal, first acknowledged the program last month and traced it to the Ohio office, "I was furious."

"I mean, it was inaccurate, but me especially because I was involved in the processing of these in 2010 so it looked like ... Lois Lerner was putting it on us," she said.

Hofacre went on to say that she thinks the public has been purposely misled on the claim that two rogue agents were responsible.

"Everybody that has been making those statements should know they are inaccurate," she said. "I just thought when Lois Lerner dropped that bomb shell, oh, it was Cincinnati's problem, she thought it would go away, but instead it exploded."

The interviews were conducted with Hofacre and Gary Muthert, both tasked with handling applications for tax-exempt status from Tea Party and other conservative groups.

Echoing prior reports, Hofacre claimed the agency's "really tight inventory control" system made it impossible for the unit to do anything on their own.

She said she had to send in extra information via fax and email to her boss Carter Hull when handling the Tea Party applications in question.

She said she became very "frustrated" and "had no autonomy at all through the process." She described the additional scrutiny as "ridiculous" and "over the top" as she was getting call after call from "irate taxpayers" who didn't have an answer on the status of their applications.

"It was demeaning," she said.

Hofacre is also the official who apparently tipped off Washington as far back as July 2010, when she accidentally emailed a summary of her initial findings to a broad group of IRS officials in Washington.

This means some in D.C. were clued in a full year earlier than previously thought.

Lerner has said she didn't learn of the list of flagged groups until June 2011 and then tried to change it. Lerner, though, refused to testify at a congressional hearing last month, and has since drawn additional scrutiny from lawmakers.

 

[Samstwitch]

IG: More Than 1,000 IRS Employees Misused Government Charge Cards; Wrote 325 Bad Checks

(CNSNews.com) - The Treasury Inspector General for Tax Administration revealed in a recently released audit report that in fiscal years 2010 and 2011 more than 1,000 Internal Revenue Service employees misused government charge cards issued by Citibank.

The report said that during the two years in question agency employees sent Citibank a total of 325 bad checks written on personal accounts that had insufficient funds to cover them, that agency officials with top-secret security clearances had their charge accounts suspended for failure to pay the balances, and that the IRS had a tendency of being “overly lenient” in disciplining those who misued the cards.

Despite the more than 1,000 IRS employees who misused the charge cards, the inspector general's report found that the IRS did a "generally effective" job in controlling its employees use of the cards.

"We found that the IRS was generally effective in implementing travel card controls," said the IG report. "However, in some instances controls were not implemented effectively, which increased the risk for misuse and resulted in some travel card misuse going undetected."

The report, which is dated April 18, 2013, was released on May 29.

IRS employees who misused charge cards included an executive-level official, a criminal investigator, and multiple employees with security clearances.

“We found that 15 cardholders with either secret or top-secret clearances had their travel accounts suspended due to their failure to pay outstanding balances,” said the IG report. “Two other cardholders with secret and top-secret clearances presented NSF [non-sufficient funds] checks to Citibank for payment of their travel card balance.”

These were not the only IRS officials who wrote non-sufficient-fund checks after passing government background checks.

“In addition,” said the inspector general, “94 cardholders serving public trust positions requiring moderate and high-level background checks wrote one or more NSF checks, and 36 had their accounts charged off [written off as a loss by Citibank] due to their failure to pay outstanding balances.
“For example,” said the IG, “a tax compliance officer wrote seven NSF checks in FY 2011 while occupying a position that required a moderate-risk background investigation.”

The inspector general determined that the IRS had detected most, but not all, of the bad checks that IRS employees sent to Citibank. “Our analysis of the NSF check control review for FY 2011 found that the IRS identified 110 (99 percent) of 111 of the NSF checks that we identified during our review,” said the IG report. “However, during the FY 2010 NSF check control review, we found that the IRS did not identify 77 (36 percent) of 214 NSF checks due to errors in extraction. This occurred because the IRS did not select the correct NSF code in the Citibank transaction data.”

Under a law signed by President Bill Clinton in 1998, federal employees are required to use “a Government-issued travel charge card” to pay for most official government travel and travel-related expenses. The IRS uses Citibank to provide these cards, which are divided into two types:

centrally billed cards and individually billed cards. Citibank bills the IRS directly for centrally billed cards, and bills the individual employees, who are then reimbursed by the IRS, for individually billed cards. IRS employees are not permitted to use their Citibank IRS travel cards for anything other than official government travel and travel-related expenses. The IG report focused on the individually billed cards used by IRS employees.

“By accepting the travel card, employees agree to use it only for official travel and related expenses while away from their official duty station for which they will submit a travel voucher for reimbursement,” said the IG report.

The report said that examples of misuse or abuse of the travel card could include, among other things, use of the card by someone other than the cardholder, use while not on official travel, purchases from an unauthorized merchant, and failure to pay on time.

According to the inspector general, by the end of fiscal 2011 there were 51,974 IRS employees carrying Citibank IRS travel cards. Those 51,974 charge-card carrying IRS employees outnumbered, for example, the 34,622 people who, according to the Census Bureau, live in Beverly Hills, Calif. Collectively, in fiscal 2011, the IG reported, they charged $121 million in travel expenses to American taxpayers.

Generally, the inspector general discovered that the more than 50,000 IRS employees carrying government charge card did not misuse them. “The vast majority of cardholders use their travel cards in an appropriate manner and paid their bills on time, which was evidenced by the low IRS travel card delinquency rates,” said the IG. “However, the CCS Branch identified over 1,000 cases of travel card misuse during FYs 2010 and 2011.”
When the inspector general’s auditors examined a sample of 30 cases of travel card misuse to see how the IRS handled the offending employees, they discovered that the IRS tended to be lenient in its discipline.

“While the CCS Branch correctly referred misuse cases to Labor Relations, disciplinary actions against employees were typically less severe than those recommended by the IRS’s penalty guidelines in approximately half of the 30 cases reviewed,” said the report.

Background clearances were not reevaluated for employees who wrote bad checks or had their cards “charged off.”

“In addition,” said the IG, “the IRS lacked standard policies for referring employees who misused their travel cards to security personnel to determine if background checks, security clearances, and suitability for employment determinations required reevaluation. As a result, employees who wrote NSF checks or had suspended or charged-off accounts received little or no disciplinary action in response to their misuse and did not have their background clearances reevaluated for suitability for employment.”

The IG determined that in about half of the specific cases it reviewed the IRS was “overly lenient” with the credit-card misusing employee.
“However, we determined that an overly lenient approach was taken in approximately half of the 30 cases we reviewed,” said the IG. “The lack of aggressive steps taken to address travel card misuse and the lack of a subsequent reevaluation of employee background checks and clearances reduces the overall effectiveness of controls over the travel card program and provides a reduced deterrent factor for travel card misuse.”

The inspector general’s bottom line conclusion in this area was that the IRS is more tolerant of its own employees who misuse government charge cards than it is of American taxpayers who fail to pay their taxes in a timely manner.

“Of particular concern is the fact that the IRS ask taxpayers to voluntarily pay taxes owed in a timely manner and yet was more tolerant when its employees became delinquent and defaulted on outstanding payments, violated the terms of the Citibank contract, abused a Government-provided resource (travel funding), and compromised the integrity of the IRS.”

 

[Samstwitch]

Senator: IRS to pay $70M in employee bonuses

WASHINGTON (AP) -- The Internal Revenue Service is about to pay $70 million in employee bonuses despite an Obama administration directive to cancel discretionary bonuses because of automatic spending cuts enacted this year, according to a GOP senator.

Sen. Chuck Grassley of Iowa says his office has learned that the IRS is executing an agreement with the employees' union on Wednesday to pay the bonuses. Grassley says the bonuses should be canceled under an April directive from the White House budget office.

The directive was written by Danny Werfel, a former budget official who has since been appointed acting IRS commissioner.

"The IRS always claims to be short on resources," Grassley said. "But it appears to have $70 million for union bonuses. And it appears to be making an extra effort to give the bonuses despite opportunities to renegotiate with the union and federal instruction to cease discretionary bonuses during sequestration."

The IRS said it is negotiating with the union over the matter but did not dispute Grassley's claim that the bonuses are imminent.

Office of Management and Budget "guidance directs that agencies should not pay discretionary monetary awards at this time, unless legally required," IRS spokeswoman Michelle Eldridge said in a statement. "IRS is under a legal obligation to comply with its collective bargaining agreement, which specifies the terms by which awards are paid to bargaining-unit employees."

Eldridge, however, would not say whether the IRS believes it is contractually obligated to pay the bonuses.

"In accordance with OMB guidance, the IRS is actively engaged with NTEU on these matters in recognition of our current budgetary constraints," Eldridge said.

The National Treasury Employees Union did not respond to requests for comment.

The IRS has been under fire since last month, when IRS officials acknowledged that agents had improperly targeted conservative groups for additional scrutiny when they applied for tax-exempt status during the 2010 and 2012 elections. A few weeks later, the agency's inspector general issued a report documenting lavish employee conferences during the same time period.

Three congressional committees and the Justice Department are investigating the targeting of conservative groups. And key Republicans in Congress are promising more scrutiny of the agency's budget, especially as it ramps up to play a major role in implementing the new health care law.

Much of the agency's top leadership has been replaced since the scandals broke. President Barack Obama forced the acting commissioner to resign and replaced him with Werfel, who used to work in the White House budget office.

In a letter to Werfel on Tuesday, Grassley said the IRS notified the employee union March 25 that it intended to reclaim about $75 million that had been set aside for discretionary employee bonuses. However, Grassley said, his office has learned that the IRS never followed up on the notice. Instead, Grassley said, the IRS negotiated a new agreement with the bargaining unit to pay about $70 million in employee bonuses.

Grassley's office said the information came from a "person with knowledge of IRS budgetary procedures."

"While the IRS may claim that these bonuses are legally required under the original bargaining unit agreement, that claim would allegedly be inaccurate," Grassley wrote. "In fact, the original agreement allows for the re-appropriation of such award funding in the event of budgetary shortfall."

Werfel wrote the directive on discretionary employee bonuses while he was still working in the White House budget office. The directive was part of the Obama administration's efforts to impose across-the-board spending cuts enacted by Congress.

The spending cuts, known as "sequestration," are resulting in at least five unpaid furlough days this year for the IRS' 90,000 employees. On these days, the agency is closed and taxpayers cannot access many of the agency's assistance programs.

Werfel's April 4 memorandum "directs that discretionary monetary awards should not be issued while sequestration is in place, unless issuance of such awards is legally required. Discretionary monetary awards include annual performance awards, group awards, and special act cash awards, which comprise a sizeable majority of awards and incentives provided by the federal government to employees."

"Until further notice, agencies should not issue such monetary awards from sequestered accounts unless agency counsel determines the awards are legally required. Legal requirements include compliance with provisions in collective bargaining agreements governing awards."
IG: More Than 1,000 IRS Employees Misused Government Charge Cards; Wrote 325 Bad Checks - See more at: IG: More Than 1,000 IRS Employees Misused Government Charge Cards; Wrote 325 Bad Checks | CNS News
IG: More Than 1,000 IRS Employees Misused Government Charge Cards; Wrote 325 Bad Checks - See more at: IG: More Than 1,000 IRS Employees Misused Government Charge Cards; Wrote 325 Bad Checks | CNS News