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June 03, 2013 10:00 AM Are Those IRS Conferences Really So Wasteful?

By Henry Farrell

The Washington Post has a story with politicians expressing outrage about the recurring scandal of federal employees going to conferences with training videos and food and stuff.

The Internal Revenue Service spent an estimated $49 million on at least 220 conferences for employees over a three-year span beginning in fiscal 2010, according to a forthcoming report that will prompt fresh scrutiny of the already embattled agency. … The report focuses especially on an August 2010 conference held in Anaheim, Calif., for roughly 2,600 agency employees in the IRS’s small business and self-employed division, a unit that assists small business owners with tax preparation and is based in Lanham. … The conference cost roughly $4.1 million and was paid for in part with about $3.2 million in unused funds from the IRS’s enforcement budget, a decision that didn’t violate IRS guidelines, according to aides briefed on the audit. … During the conference, employees watched two training videos starring division employees that cost at least $60,000 to produce, according to the audit’s estimates.
Charles W. Boustany Jr. (R-La.), who had learned about it and a television production studio at the division’s offices in New Carrollton. Boustany chairs the House Ways and Means Committee’s oversight subcommittee and also fielded some of the first allegations that tea-party-affiliated groups were being inappropriately targeted as they sought tax-exempt status. “The outrage toward the IRS is only growing stronger,” Boustany said in a statement Friday. “Clearly this is an agency where abuse and waste is the norm and not the exception.”

When much more lavish conferences are held by private sector US corporations or professional associations (including academic associations, if your university doesn’t pay for it), they cost the US government lots of money too. Within various rules and strictures, they’re considered legitimate tax deductible expenses which people and (as best as I understand it) businesses can declare against earnings. You can make the case, obviously, that these conferences and events are mostly useless boondoggles. You can equally well make the case, if you want to, that they’re useful opportunities for social networking, building up esprit de corps and all of that good stuff. What you can’t make the case for, unless there’s some very subtle argument which escapes me, is a distinction under which conferences (for government employees) that cost the US government lots of money are obvious cases of abuse and waste, while more lavish conferences (for non-government employees) that cost the US government lots of money, are perfectly legitimate business expenses that we shouldn’t be bothering our pretty little heads with.

[Cross-posted at Crooked Timber]

Henry Farrell is an associate professor of political science and international affairs at George Washington University.
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Comments

  • DRF on June 03, 2013 11:32 PM:

    I don't buy that analysis. Private businesses are, presumably, incentivized to limit expenses in order to maximize profits. Therefore, as a general matter, we can assume that businesses will not overspend on employee conferences. Obviously, some companies will spend extravagantly on such conferences, probably for employee morale purposes, but in doing so they hurt their own shareholders more than they hurt the taxpayers.

    I don't know whether the $49 Million in conference expenses can be justified by the IRS, but certainly it can't be defended by arguing that private businesses spend more money on their own conferences.