Outrage, schmoutrage

by Henry on June 2, 2013

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.

{ 65 comments }

1

John Quiggin 06.02.13 at 4:36 am

For reference $1500 a head ($4.1m/2600) is about the total cost of an academic association conference in Oz, (rego+accomm+travel) , but cheap by the standards of commercial conferences.

2

Rich Puchalsky 06.02.13 at 4:43 am

I would like to go along and express appropriate outrage at the GOP outrage, I guess. But I don’t understand this. The IRS, and the government generally, doesn’t evaluate business expenses to see whether they are well-spent or not. If a company builds a factory, and it turns out to be in a really bad location and ends up being a huge loss, they still get to deduct that expense from their taxable income. Similarly, if a business is allowed to treat conferences as an expense, the government doesn’t evaluate them to see whether they are good social networking or boondoggles.

The government does, however, manage how governmental agencies spend their money. There are ways of protecting agency budgets from legislative storms of various kinds, but the final authority is there.

Of course I still think that it’s stupid to try to make “Government employees go to conferences!” into a scandal. But the distinction that you think isn’t one, really seems to be one.

3

Matt 06.02.13 at 5:10 am

Thanks for that information, John. Whenever I see some numbers like this, I always wonder, “is that a big number, or a small number?” $4M for a conference _sounds_ like a lot, which is why this has any legs at all, I guess, but it’s easy for it to in fact be a pretty small number in context.

4

BenK 06.02.13 at 5:24 am

I agree with Rich. There is no point in trying to turn this into a second order stupidity contest. Businesses, taxes and regulation are their own set of problems; but the basic principle is this: we expect businesses to try to make money. If they do something that fails in that aim, we presume it was a failure of the attempt, not a failure to make the attempt. If they try to spend money on something illegal – hire a hit man, for example – the problem is likely judged to be that they were too eager to make money, not wasteful in the expense. If they spend on employee welfare and morale and all that, they are expected to be doing it as eagerly as having teeth extracted; so the expense is likely legitimate. The people who conduct reform in support of shareholders may have some questions about this – but usually only at the C-level. Everywhere else, at least, the incentives of the supervisors are aligned with cost minimization.

Government is something else again. They are not trying to make money, we should hope. If they go spending money on this and that, at each level there is a need to demonstrate why the expenditure was driven by the mission they were given. When they spend on nice things for the office, there is a legitimate first order question about who made the decision and why it furthers the mission; because the foxes are fundamentally guarding the hen house.

5

heckblazer 06.02.13 at 6:13 am

Apparently the Republican position that government should be run like a business has some limits.

6

John Quiggin 06.02.13 at 6:42 am

Rich and BenK, as the OP mentions, conference attendance is deductible for individuals and the self-employed, so the IRS makes some effort to ensure that the “conference” isn’t just a vacation with a Powerpoint show thrown in.

And the same incentives apply for corporations. If a company can pay its workers in tax-free fringe benefits rather than taxable salary, it can pay them less, while leaving them better off. In Australia, at least, there’s a special Fringe Benefits Tax which limits things like the amount that can be spent on conference expenses before the tax kicks in

7

SusanC 06.02.13 at 8:20 am

@6: Yes, because you don’t pay income tax on the money that your employer spends on sending you to a conference, the Inland Revenue (in the UK) does care that it’s a legitimate business expense and not a holiday. (Although the tax authorities may not be in a very good position to be able to be able to know how legitimate the conference is).

The US furore over government-funded conferences is somewhat of a sensitive subject in many parts of academia at the moment, as we really do rely on conference publication for communicating research results etc., and attendance of US academics at legitimate conferences is getting more accounting scrutiny than usual.

8

marek 06.02.13 at 9:25 am

The idea that businesses make a finely graduated decision on how much to spend on staff conferences (and corner offices and executive parking slots) in order to maximise shareholder value, which seems to be the premise behind BenK’s comment at 4, is just a bit unreal. Management has clear incentives to maximise returns to management, and there is plenty of evidence that they are pretty good at it.

I am all for proper discipline of government expenditure, but second guessing $50m out of an operating budget of $12bn doesn’t seem a very clever way of doing it. If anything, that sounds like a worryingly small amount.

9

Philip 06.02.13 at 9:28 am

Yes Susan C, Iceland (the supermarket chain) are arguing with HMRC as to whether a trip for managers to Disneyland is tax deductible.

10

Hattip 06.02.13 at 10:34 am

How on earth can you confuse irresponsible spending by government employees with private business making legitimate tax deduction. How do legitmate tax deduction count as “money lost”. Are the payroll expense “money lost”.

This is a false analogy you are making. You seem to think that government is a “business”.

You make an irrational argument based on a category error–it is based on a false assumption.

Here is the point: Government employee should not be doing this sort of stuff ever. It is nobody’s business what a private company wants to do with their money.

11

floopmeister 06.02.13 at 11:04 am

It is nobody’s business what a private company wants to do with their money.

Has anyone told the shareholders this?

I think you are confusing ‘private sector business’ with ‘private business’.

12

marcel 06.02.13 at 11:13 am

heckblazer: I think the Republican position is not that government should be run like a business, but that it should be run by business. Isn’t that the reason that private contractors have proliferated in our military ventures? As far as efficiently collecting what is due the government, I think tax farming is the next (big?) thing. That would reduce our 47% moocher class to something manageable, at least that part comprised of lucky duckies who pay no income tax.

13

marcel 06.02.13 at 11:14 am

Testing… I may forgotten to close a tag.

14

L. F. File 06.02.13 at 11:32 am

One could also note the number of large conferences in lucrative settings (Hawaii, Cancun, etc.) held for employees of firms just before the firms declare bankruptcy!

lff

15

vasvas 06.02.13 at 12:31 pm

Isn’t it a much bigger outrage that Repubs seem to be rallying against …. employee training? Is there some nuance in what the good father of the nation says, to the tune of “this and this sort of training is good and legit, but what happened here is clearly different/worse”? I don’t think so, he just thinks training videos and training conferences are a waste of money, period. Why do there need to be second-order arguments to drive us to outrage? The guy doesn’t think civil servants ought to be trained!! And he’s willing to make that position known publicly! And there is little immediate pushback!

16

Walt 06.02.13 at 12:59 pm

Hattip, I admire your commitment to the right of management to piss away shareholder’s money. You have a bright future as a consultant.

17

Tom 06.02.13 at 1:15 pm

The OP says $3.2 million of the $4.1 million conference expense came from unused funds in the enforcement budget.

Is this the not uncommon case of a government agency making sure it spends all the money in a given budget, to prevent that budget’s being reduced in the future? (I don’t know if this also happens in the private sector.) If so, the conference was partly designed just as a way to spend money rather than mounted just on its merits.

18

P O'Neill 06.02.13 at 1:31 pm

The more potent meme is that federal government spending has spawned — as this Wall Street Journal story (possibly $) puts it — a new gilded age of contractors and consultants:

Meanwhile, it’s not difficult to spot examples of today’s abundance. After only a year in business, Aston Martin of Washington, D.C., based in the wealthy Virginia suburbs, is ranked seventh in sales in North America, having sold 100 of the $120,000-plus cars. At the Washington Humane Society’s annual “Fashion for Paws” gala on April 13, attendees raised contributions of a minimum of $5,000 each to walk their dogs, dressed in tutus and tuxedos, down a runway. At Karma, a Georgetown salon owned by society cosmetologist Erwin Gomez, customers plunk down $350 for eyelash extensions, while the new Capella hotel down the street charges $22 for a martini. Locals are soaking up the good life at the Ritz-Carlton, too, where restaurant bookings and special-events sales are surging. “My numbers are up considerably year after year,” says Elizabeth Mullins, vice president and D.C. general manager at the hotel

19

Rich Puchalsky 06.02.13 at 1:39 pm

Great, now I get to try to expand on what I meant in a context in which people are laughing with good reason at hattip’s “Government employee should not be doing this sort of stuff ever. “

“Rich and BenK, as the OP mentions, conference attendance is deductible for individuals and the self-employed, so the IRS makes some effort to ensure that the “conference” isn’t just a vacation with a Powerpoint show thrown in.”

I am self-employed, in the U.S., so I know something about this. (Not much, because I’ve actually never claimed conference or travel expenses.) If you claimed that you were going to a conference but you actually didn’t because it was really a vacation, that would just be plain old tax fraud, no different really than if the company in my first example claimed that they built a factory but they really didn’t. I don’t think that this is alleged to have been what happened; the governmental employees were supposed to have gone to actual conferences.

If they’re actual conferences, but “wasteful” in some sense (let’s all go to a tropical beach somewhere), there are various rules about how much you can claim, like the Australian ones that you refer to. And large claims just look suspicious and may bring down additional attention. If all of a sudden I claimed that 20% of my expenses were for conference attendance, I would guess that I’d be more likely to be audited. But businesses most often don’t run into this because their expenses are large enough so that conferences get lost in the noise.

But the IRS isn’t managing the decision about whether and how to have conferences. If they decide after the fact that you’re trying to pay employees with fringe benefits, or overstate expenses, then that’s something they’re concerned with, but not if it’s a more or less wasteful but actual conference. Henry writes:

“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.”

But yes. We make that distinction all the time.

20

peter 06.02.13 at 2:08 pm

Is it still the case that the National Science Foundation cannot serve coffee to its volunteer panel members at proposal assessment panels, because to do so would comprise an extragant waste of taxpayers’ monies?

21

Sam Tobin-Hochstadt 06.02.13 at 2:55 pm

peter, that’s not that case, speaking from first-hand experience of the coffee.

22

Harold 06.02.13 at 2:57 pm

Recently a federal government agency came into criticism for having a conference in Las Vegas. Having a conference of Federal workers in Las Vegas had been strictly off-limits since virtually forever — and it had been decided to hold it there because the senators and representatives from that state were complaining angrily and vociferously that their state was being discriminated against by the federal government. The agency was also accused on that occasion of paying too much for donuts to go with the coffee that they were allowed to serve. It is ridiculous.

23

Rich Puchalsky 06.02.13 at 3:10 pm

Also. The IRS really does pretty much honor expenses that are traditional within an industry. There’s a lot of business conferences that are lavish because they are bribes, not of the business’s own employees, but of the people it’s trying to sell things to. But sales expenses are treated as legitimate, within certain limits. Similarly, if you’re a tech company, you get to have a hugely wasteful and elaborate party around the release of a new product. Why? Because it’s supposed to make a splash and be advertising, effectively.

I think that non-crazy people pretty much understand this at some basic level. The people who are stoking false outrage at the idea that government employees ever go to conferences at all are just stoking false outrage, yes. But you can’t shoot them down by saying that something isn’t a distinction when we generally act as if it is.

24

RSA 06.02.13 at 3:33 pm

The US furore over government-funded conferences is somewhat of a sensitive subject in many parts of academia at the moment, as we really do rely on conference publication for communicating research results etc., and attendance of US academics at legitimate conferences is getting more accounting scrutiny than usual.

The reaction to the GSA scandal, in the context of the sequester, had some implications for a conference I’m involved with, a technical conference that brings together academics, industry, and government researchers. After all the papers were submitted, reviewed, and accepted or rejected, an announcement was made that no Department of Defense employees would be allowed to go to the conference. (There would be problems even if DoD employees traveled on their own dime, for reasons that escape me.) We’re working on a possible teleconferencing solution, with some people participating in their personal time…

On a related issue, I don’t know how many times I’ve talked with someone at a conference and said, “We could meet up later; are you staying at the conference hotel?” and been told that the person was staying some distance away in lodgings that were inexpensive enough to come in under the overnight rate that the government allowed. Conferences in big cities were sometimes tough for government employees or contractors.

25

BenK 06.02.13 at 3:52 pm

As a government employee who has had legitimate conference expenses and has had to defend them recently, and who travels at the government per diem, and has run workshops where the issue of serving food has come up, I have a fair amount of personal experience with many aspects of this – and I can safely say that the whole thing is a mess and has been so for a long time. It is currently just becoming a different mess. I hope that we eventually reach a new balance, which involves fewer poor decisions but also fades out some of the excessive restrictions currently in place.

Oh, and for RSA at 24 – I have been in many lovely hotels, even during major conferences, on the government rate. It takes some planning, but I feel the hotels have been very accommodating. These hotels have been in San Diego, Denver, San Francisco, and other booming towns. The per diem rate works just fine, once I got used to the idea of planning several months ahead.

What I object to in my post above is that the government can simply say “businessmen have fancy dinners as a business expense, so government employees should be able to charge fancy dinners to their own budgets.” This is not the case, not morally, ethically or legally. If the IRS or any other agency does something that can be viewed as frivolous or silly by the voters or their representatives, they should be held accountable and stop. If a businessman wastes corporate money, the chain of accountability is different; depending on the corporate structure (partnership, public traded, etc).

26

b9n10nt 06.02.13 at 4:05 pm

If a corporation wastes money…well, that can’t happen because Markets.

If a government wastes money…well, that has to happen because No Markets.

Of course, to a left-anarchist, the outrage might be about how waste in govt mimics that in private industry, and follows from deeply ingrained hierarchies in status and wealth. But that’s obviously not the hegemonic view.

27

Jim Harrison 06.02.13 at 4:10 pm

Anybody who thinks that regaling the troops is an illegitimate business expense has never managed a sales force. There is an obvious connections between the morale of employees and their performance. You don’t pay for the shrimp platters and white wine out of the goodness of your heart.

Of course many conservatives don’t think that government jobs are real jobs with real employees. Treating postmen, teachers, and bureaucrats badly may be self defeating, but it fits in with a rather peasant-like world view in which the only alternative to self-interest is saintly asceticism. Them tax collectors took the black. No parties for them.

28

RSA 06.02.13 at 4:31 pm

Thanks, BenK, I didn’t know that.

29

Robert the Red 06.02.13 at 4:33 pm

Peter (#20), I don’t know about the NSF, but at the NIH, the reviewers don’t get coffee or snacks. And the government employees running the meeting are not allowed to assist or inform them about how to get coffee or lunch — such things are specifically forbidden as a waste of a government employee’s time. The result is that people wander off looking for these things, and then the meetings are held up since the review work cannot legally continue until all reviewers are back in the room.

30

Robert the Red 06.02.13 at 4:35 pm

I forgot to add that government employees are allowed to tell reviewers how to get water to drink, and where the bathrooms are.

31

Downpuppy 06.02.13 at 6:04 pm

Your service expense is a service provider’s income.

The expenses of conferences – private or government – are, if held in the US, taxable income to the hotels, airlines, etc that host them. So I don’t see the tax subsidy to private conferences, any more than to any other business service.

32

Walt 06.02.13 at 6:19 pm

Vacations are also taxable income to hotels, airlines, etc. Business conferences are subsidized relative to identical travel packages that you pay for out of your own pocket.

33

John Quiggin 06.02.13 at 8:11 pm

“But you can’t shoot them down by saying that something isn’t a distinction when we generally act as if it is.”

This would seem to imply that no error of this kind (making a substantive distinction between two things that are effectively identical, but different in form) can ever be correctd.

34

Rich Puchalsky 06.02.13 at 8:55 pm

I don’t agree that they’re effectively identical. As BenK writes, there’s a different chain of accountability: the government gets to decide how to manage governmental agencies, but it doesn’t get to decide whether businesses that have legitimate expenses (according to some standard set of rules) are wasting money or not.

35

Purple Platypus 06.02.13 at 9:07 pm

“I don’t agree that they’re effectively identical.”

But at least you now appear to recognize that whether they are is a legitimate question. Earlier, you seemed to think the mere fact that we act as though they’re not settled the question.

36

heckblazer 06.02.13 at 9:48 pm

Marcel @ 12:

Going by his presidential transition plan Romney at least was dead serious about running the government like a business. Thank Kolob we dodged that bullet.

As for the trend of relying on contractors, that started with Bill Clinton’s “reinventing government” as a way to reduce the federal headcount and so claim that government had become smaller while still providing the same level of service. The Bush administration then realized that using contractors could likewise hide the real size of the American occupation of Iraq by minimizing the number of soldiers and direct DoD employees. That their friends the contractors could make tons of money definitely didn’t hurt though.

37

Dr. Hilarius 06.02.13 at 10:00 pm

The GOP is just pushing its established meme that government is nothing but waste, fraud, and incompetent workers sucking tax-payer blood. Every once in a while, government agencies do waste money on silly or extravagant meetings or purchases. In the overall picture it’s usually an insignificant amount but the damage done by the negative publicity is huge. The IRS example above does sound like a boondoggle (costing about $1577 per person) done to avoid having a budget surplus at the end of the fiscal year. IRS administrators, of all agencies, should be sensitive to the appearance of waste given the right wing’s pre-existing hatred of the agency.

I have noted over the years, the diminishment of attacks on military waste. Attacking the Pentagon for $500 toilet seats and $50 bolts used to be standard political fare. Apparently, in the never ending war on terror, no price for a toilet seat is too high.

38

John Quiggin 06.02.13 at 11:17 pm

So, to restate the basic points:

Repub claim is that a conference costing $1500/head is presumptively a misuse of public funds for the benefit of the attendees.

Response (OP + my comment #1)

1. Conference expenditures by individuals and companies are presumed, in the tax system, to be legitimate expenditures aimed at generating income, rather than consumption or disguised compensation, and accordingly are treated as tax deductible expenditures

2. The cost per person, for the case in question, is not unusual, in fact, lower than average

3. So, in the absence of additional information, it is inconsistent to object to the IRS conference while accepting the tax treatment of conferences in general

39

John Quiggin 06.02.13 at 11:21 pm

To reply more directly to Rich, it’s certainly true that the value-for-money of the IRS conference is a legitimate subject for scrutiny by elected officials, whereas there would be no policy problem with a business conference that achieved nothing for the firm(s) concerned (assuming it wasn’t a disguised holiday)

But no one has presented any evidence on this – the fact that the conference took place and cost $1500/head is taken as proof that money was wasted.

40

Rich Puchalsky 06.02.13 at 11:35 pm

“To reply more directly to Rich, it’s certainly true that the value-for-money of the IRS conference is a legitimate subject for scrutiny by elected officials, whereas there would be no policy problem with a business conference that achieved nothing for the firm(s) concerned (assuming it wasn’t a disguised holiday)”

Well, that’s basically all I was saying. That is the distinction that the OP said wasn’t a distinction. Even if a business ended up spending enough money so that it cost the government $1500/head in lost taxes, so that the two cases had exact monetary equivalence, businesses basically get to waste money at their own discretion as long as the waste falls into legitimate expense categories.

$1500/person sounds like a reasonable amount for a conference to me. I never thought that this should be a subject for outrage. I just disagreed with the reasoning in the OP.

41

ckc (not kc) 06.02.13 at 11:42 pm

(of course, the outrage is that every tax dollar collected – and spent – is wasted)

42

derrida derider 06.03.13 at 12:44 am

People seem to forget that government agencies are in a market – the labour market. Lousy pay and hairshirt economies mean that you can neither hire, motivate nor retain talent (google the term “efficiency wage”). None of which justifies waste or denies the need for accountability, but pettiness in that accountability is self-defeating.

I have long believed that the reason French (for example) attitudes to big government and to big business differ so much from US attitudes is partly to do with relative pay and prestige. In France the best and brightest become civil servants, in the US they go into business.

FWIW, I think its not the conference per se that is questionable but the source of the funds for it. If it came out of an annual training/development allocation there’d be no problem. “Spend any unspent money now before the beancounters use it to justify cutting next year’s budget” does not usually lead to rigorous assessment of the spending’s value for money. But this is not just a public sector phenomenon – it’s common in any area in a large business that is not a profit centre in itself (eg corporate support).

43

nick s 06.03.13 at 12:52 am

Chrimminy, the point of the deductible junket is to spread a degree of largesse to the hospitality industry, especially during slack time, and the irony here is that the largesse is designed to keep money from the IRS while having a relatively good time.

The agency was also accused on that occasion of paying too much for donuts to go with the coffee that they were allowed to serve.

Even though standard practice is to undercharge for the room hire, but make it back on the catering.

If the federal government were to stop holding conferences, you’d hear the yowls from hotel owners and restaurateurs echoing across the US. And tourism is a big, powerful industry.

Perhaps Rep. Boustany might require a word in his ear about the possibility of New Orleans being removed from the list of approved conference venues?

44

merian 06.03.13 at 2:13 am

I’m familiar (via my partner) with a small public US academic institution in a somewhat geographically isolated location which is so afraid of negative publicity in the local papers about extravagant travel that sending professional staff (specifically, computing and network operations) to workshops and conferences appears to be far out of the question. This leads to [IMHO, as far as the cause-effect link is concerned]:
a) a marked stagnation of skills development; b) high levels of frustration among incoming highly skilled staff who are used to a different culture; c) projects requiring specialized skills being outsourced to extremely expensive outside consultants.

Given the public outrage not long ago when a small number of legislators undertook an educational trip to a European country that has similar environmental and economic constraints to deal with, for a per-head cost that was sure high but didn’t sound outrageous to me at all, the institution in question is somewhat realistic about the potential for pushback.

(Travel of researchers and faculty is usually paid out of grants, and some funding for student travel stipend is available in this case.)

45

Bob Winter 06.03.13 at 2:13 am

Business expenses are deductible if they are “ordinary and necessary” to the conduct of the business. While it is an issue that is rarely tested, particularly in light of Delaware law that typically governs the liability of officers and directors for allegedly wasting company money, it is not the case that all expenditures should be tax deductible simply because the expenditure allows for a pleasant experience for the participants. I am aware of an instance where a company claimed an expense as deductible because the CEO thought it important to send a jet at company expense to pick up his mistresses brother who he thought would enliven an event. There is in my view a legitimate issue as to whether the government would do as well looking at what business spend their money on for conferences (entertainment) as looking at limiting the costs of events such as the IRS conference at issue. Leave for another day the costs of much (but not all) of Congressional travel.

46

b9n10nt 06.03.13 at 3:43 am

Here’s two ways this story could become an own goal:

1) make it about full employment:

Yes, at full employment, you want the IRS budget to be as efficient as possible, but now you’re thinking thank god someone’s still spending money

2) make it about the 1%:

Compare the IRS to an equally sized by employment “private” business and see what travel and convention-stuff costs. After all, the IRS is huge, right?

And just why should the corporate norm of business entertainment be a norm while millions want to work. Look at what we already know about our economy right now: how does it make any sense to focus on a speck of waste -and likely a reflection of overall professional culture in Ameica- in a time of Long Hours for the working and sleepless nights for the unemployed.

Does this story suggest any positive change for the people of cities and towns?

-

47

PatrickfromIowa 06.03.13 at 4:16 am

Former bartender here. Never saw a government credit card in the hands of a fat red-faced guy who groped the waitresses.

Saw plenty of corporate cards, though.

48

Andrew F. 06.03.13 at 11:28 am

I agree with Rich’s point regarding the rationale of the OP.

For those interested, here’s one of the two videos referenced in the article as costing a combined total of $60,000: http://www.cbsnews.com/video/watch/?id=50143433n

The cost estimation of those videos may well turn out to be highly questionable, of course.

In any case, the IRS runs on a budget of 12 billion dollars, and employs 88,000 full time employees. The conference spend over three years referenced in the article does not, from a very high level, look extravagant.

49

Barry 06.03.13 at 12:53 pm

Ben K: “I am all for proper discipline of government expenditure, but second guessing $50m out of an operating budget of $12bn doesn’t seem a very clever way of doing it. If anything, that sounds like a worryingly small amount.”

The real crime of that article is non-normalization of numbers. All numbers which don’t have an obvious context should be given one (e.g., I’ll bet that the IRS spends a lot of money on toilet paper, but a flat dollar figure doesn’t mean much).

50

Ronan(rf) 06.03.13 at 1:54 pm

“Former bartender here. Never saw a government credit card in the hands of a fat red-faced guy who groped the waitresses”

I remember a number of years ago in Spain a friend at the time telling me that one weekend when she was in Valencia she ended up in a bar with the Mayor of a medium sized Irish town and his entourage where he held court for the evening and bought the place drinks until 3 in the morning.
It didnt strike me as the worst way to spend public money*

*Admittedly it might have been their own money. Though I doubt it

51

Ronan(rf) 06.03.13 at 2:08 pm

..not the worst way to spend public money *but* a tedious (at best) way to spend an evening

52

MPAVictoria 06.03.13 at 2:33 pm

“..not the worst way to spend public money *but* a tedious (at best) way to spend an evening”

You think so? It sounds like it would have been a hell of a good time to me.

53

Ronan(rf) 06.03.13 at 2:34 pm

I know off (though not personally) the Mayor in question..I guess it depends where you were sitting

54

Ronan(rf) 06.03.13 at 2:35 pm

..although I do agree with you in general

55

MPAVictoria 06.03.13 at 2:35 pm

Not to give away too much about myself but I have worked for large government agencies and been responsible for organizing conferences and meetings. The amount of money is usually comparatively small and every expense has to meet certain guidelines and be approved by very senior management. If we want to attack waste there are better places to start.

56

MPAVictoria 06.03.13 at 2:36 pm

“I know off (though not personally) the Mayor in question..I guess it depends where you were sitting”
Oh… got ya.

57

Trader Joe 06.03.13 at 3:07 pm

I’d argue that a $50 million spent on conferences over 3 years is actually pretty miserly. Annual changes to the tax code are complex, enforcement (as has obviously been the case recently) is complex and ever changing and as someone pointed out up-stream, the best and brightest go to work for the corporates figuring out how to dodge the law – some training to keep the enforcers up to speed on the latest tricks to the trade can have substaintial returns on investment if it produces incremental catching of cheats. All of these point to the need for as much training as possible.

Anyone here ever dealt with the IRS on either a personal or corporate matter? You usually need to get to about the third level of managment before you run into someone who actually understands something beyond reading back to you whats written on the enforcement letter or audit request – more training should be the imperative.

Lastly – anyone who thinks corporate T&E expenses aren’t held to a reasonability standard has never survived an IRS audit. The enforcement agent (and his team) usually spend several weeks on this and certainly for members of senior management pull each and every T&E those guys submit and question every item. When they catch something that’s wrong – most often use of a corporate jet – its a 100% certainty that they will turn around and send a bill to the executive in question that it was compensation.

One might perceive that they should catch more and maybe thats true, but its more for lack of manpower than lack of looking.

This nattering over the budget expenses is all a smokescreen anyway – the issue is how the IRS selects and chooses enforcement actions which recently appear to have targeted Tea Party related groups, but no doubt in the past have victimized any number of other political, social or other groups….that should be the focus, not the price of donuts.

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TheSophist 06.03.13 at 5:35 pm

I will have a scintilla of sympathy for the complaining congresscritters the day after they give up on their junkets to ….wherever it is they all go all the time…Syria? Wtf was John McCain doing in Syria? How is that not an obscene waste of my hard-earned taxpayer dollars?

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Dan Nexon 06.03.13 at 7:29 pm

Congress critters now get effectively unlimited trips to their home districts at taxpayer’s expense, so many go home on weekends. Which is also why cutting poor kids out of Head State programs was dandy, but airport delays were a horrific affront to all citizens that must be fixed yesterday!

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peter 06.03.13 at 9:09 pm

The Australian Bureau of Statistics use to screen episodes of Faulty Towers at management-training off-site away-days, since Basil Faulty provides such an exceptional case study in poor management practice. No doubt, the GOP would insist that no one laugh at such screenings, were they to be be permitted.

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ajay 06.05.13 at 1:30 pm

Government is something else again. They are not trying to make money, we should hope.

This is the Internal Revenue Service; they are supposed to be making money.

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ezra abrams 06.06.13 at 3:19 am

In MA, the state auditor is an independent posistion, elected directly in a state wide race.
Recently, the auditor, on S Bump, audited the welfare dept.
Ms Bump found that the dept was doing an outstanding job – of ~ 3.6 Billion in payments, the auditor found 18 million in erroneous payments (99.5% accuracy)
And, this excellent result was achieved with a “difficult” popultion – people who are homeless, don’t have reg internet or phone access, etc.

Oddly, the media in boston, including the globe and NPR’s WBUR, reported this as a scandal of poor bad payments; the director of hte state agency had to resign.
odd

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ezra abrams 06.06.13 at 3:21 am

Matt @3
*very* imp point (a la Thinking Fast and Slow)
If you see a number, and don’t have other numbers to place it in context, system one takes over.
this is a constant fail by the media, and I don’t think they are numerate of (warning, hideous neologism ahead) psycholonumerate enough to understand this

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js. 06.06.13 at 4:49 am

This is the Internal Revenue Service; they are supposed to be making money.

Which is genuinely funny, and I see what you mean, but also deeply misleading (the IRS not being a profit-making enterprise after all).

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Jerry Fields 06.06.13 at 2:23 pm

Alas, the critics of the IRS seem to lack any sense of proportionality. They keep saying “$49 million over three years” implying that this is a very large number and therefore an inappropriate expenditure. In fact when viewed in the context of a large organization it works out to only about $180 per year per employee, which is almost certainly inappropriately low. That’s a tiny amount , even disregarding any comparison with the private sector. The tax code is highly complex, and the IRS is an intricate organisation, with daedal technology. It costs a lot of money to keep the workforce trained, and the organization’s essential human relationships tuned up.

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