Seeking to get ahead of the fresh controversy, acting IRS commissioner Daniel Werfel acknowledged the report in a statement late Friday, but he did not share any of the findings. He called the spending “an unfortunate vestige from a prior era” and said the agency has significantly curtailed conference spending in recent years.
The audit is set for release Tuesday and was prepared by the Treasury Inspector General for Tax Administration, the same entity that confirmed allegations against the agency’s tax-exempt unit. Details of the report were shared by several congressional aides, who were briefed on the report Friday.
The report is reminiscent of findings released last year after a similar investigation into spending on conferences hosted by the General Services Administration, revelations that prompted other inspectors general to launch probes as the Obama administration ordered government-wide cutbacks in such meetings.
In the report, the Treasury Department’s inspector general provides detailed estimates on hundreds of IRS conferences, but investigators could not independently verify the total costs, because the agency failed to keep records of all expenses, according to the aides.
The report focuses especially on an August 2010 conference in Anaheim, Calif., for roughly 2,600 agency employees in the IRS’s small-business and self-employed division, a unit based in Lanham that assists small-business owners with tax preparation.
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 did not violate IRS guidelines, according to aides briefed on the audit.
During the conference, employees watched two training videos that cost at least $60,000 to produce, according to the audit’s estimates. The first video is a “Star Trek” parody and stars division employees discussing how they might identify and address allegations of tax fraud. Aides briefed on the audit said that employees paid for the “Star Trek” uniforms they wear in the video but that the agency paid for the construction of an elaborate mock-up of the bridge of the starship Enterprise.
One employee, mocking the Russian character Pavel Chekov, is seen telling another colleague, “Back in Russia, I dreamed someday I’d be rich and famous.”
“Me, too,” the colleague responds. “That’s why I became a public servant.”
The second video stars some of the same employees learning how to dance the “Cupid Shuffle” from a 2007 song by the performer Cupid. As other employees learn the dance moves, one female employee comments, “They don’t pay me enough to do this.”