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Room Upgrades, Videos & A 'Star Trek' Parody: Read IRS Audit

Already under fire for how some personnel gave extra scrutiny to conservative groups' applications for tax-exempt status, the Internal Revenue Service is also dealing with an inspector general's criticism of the $4.1 million spent on a conference in 2010.

Posted here, the Treasury Department audit concludes that:

-- "The IRS did not use available internal personnel to assist in searching for the most cost-effective location as required." The event was held in Anaheim, Calif.

-- "The IRS may have been able to negotiate a lower lodging rate to reduce conference expenses if it had not used non-governmental event planners and eliminated some of the negotiated concessions provided by the hotels."

-- There were "questionable expenses related to the conference, including planning trips, outside speakers, video productions, an information corridor, and promotional items and gifts for IRS employees."

Those questionable expenses and video productions are getting plenty of attention. The inspector general found, for example, that:

-- The IRS spent $50,187 on videos, including Leading into the Future — a Star Trek parody. Executives from the agency's Small Business/Self-Employed division appeared in the "tax-themed parody."

Another video, SB/SE Shuffle, feared 15 division executives and managers dancing on a stage. It was supposed to "engage managers and help facilitate a connection between executives and managers."

-- One keynote speaker was paid $17,000 for presentations in which he would "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 paintings were portraits of Albert Einstein, Michael Jordan, President Lincoln, Bono and the Statue of Liberty.

-- Another keynote speaker was paid $27,500 for two speeches of one hour each. The agency hoped that "his concept of Intersectional Ideas [would illustrate] how ideas from different fields can be combined to generate new solutions to existing challenges."

One other issue that the IRS comes into some criticism for: "A substantial number of ... employees received hotel upgrades." According to the audit, there were 93 upgrades at a Hilton hotel, 33 at a Marriott and six at a Sheraton. The division's commissioner, for example, "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 was charged $135 a night.

The inspector general concludes that "because these free rooms and upgrades were part of the Letters of Intent with the hotels, they are not gifts to employees. However, the solicitation and use of hotel room upgrades increases the perception of wasteful spending and should be carefully considered in the future."

According to the audit, 2,609 IRS employees attended the conference. In a response to the audit, IRS officials told the inspector general that

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