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IRS officials enjoyed luxury rooms at conference

Wednesday - 6/5/2013, 3:28am  ET

From left, Jenny Beth Martin, cofounder of the Tea Party Patriots, Jo Anne Livingston, and Darcy Crisp, all of Atlanta, applaud after House Ways and Means Committee member Rep. Aaron Schock, R-Ill. said the IRS was discriminating, Tuesday, June 4, 2013, on Capitol Hill in Washington, during the committee's hearing of organizations that say they were unfairly targeted by the Internal Revenue Service while seeking tax-exempt status. (AP Photo/Jacquelyn Martin)

ALAN FRAM
Associated Press

WASHINGTON (AP) -- Already heavily criticized for targeting conservative groups, the Internal Revenue Service absorbed another blow Tuesday as new details emerged about senior officials enjoying luxury hotel rooms, free drinks and free food at a $4.1 million training conference. It was one of many expensive gatherings the agency held for employees over a three-year period.

One top official stayed five nights in a room that regularly goes for $3,500 a night. Another official, Faris Fink, stayed four nights in a room that regularly goes for $1,499.

Fink was later promoted to head the IRS division that staged the 2010 conference in Anaheim, Calif., a position he still holds. He also has the distinction of playing Mr. Spock in a cheesy but slickly-produced "Star Trek" video that IRS employees filmed for the conference.

A total of 132 IRS officials received room upgrades at the conference, according to a report by J. Russell George, the Treasury Department inspector general for tax administration. The tax agency paid a flat daily fee of $135 per hotel room, the report said, but the upgrades were part of a package deal that added to the overall cost of the conference.

The report was made public on the same day leaders of six conservative groups testified at a congressional hearing, where they told lawmakers they had endured abuse from IRS agents as they spent years trying to qualify for tax-exempt status.

In often-emotional testimony, the conservatives described IRS demands for details about employees' and group officials' political activities and backgrounds, for comments they'd posted on websites, for videos of meetings and information on whether speakers at such sessions voiced political views. Some said it took three years to get their tax-exempt status; others said they were still waiting.

"I'm a born-free American woman," Becky Gerritson, president of the Wetumpka Tea Party of Alabama, tearfully told the lawmakers. "I'm telling my government, 'You've forgotten your place.'"

Federal regulations say that tax-exempt social welfare organizations can engage in some political activity but the activity cannot be their primary mission. It is up to the IRS to make that determination of their level of political activity, and some Democrats at Tuesday's House Ways and Means Committee hearing noted that some liberal groups also have had a hard time winning tax-exempt status from the IRS.

However, revelations about IRS agents improperly targeting tea party and other groups have led to investigations by three congressional committees and the Justice Department. One top IRS official was forced to resign, another retired and a third was placed on paid administrative leave.

Tuesday's report by the inspector general suggests the agency has struggled with management issues beyond the division that handles tax-exempt applications. According to the report, expensive employee conferences were approved with few restraints or safeguards until new rules were imposed in 2011.

In all, the IRS held 225 employee conferences from 2010 through 2012, at a total cost of $49 million, the report said. The Anaheim conference was the most expensive, but others were costly, too.

In 2010, the agency held a conference in Philadelphia that cost $2.9 million, one in San Diego that cost $1.2 million and another in Atlanta that also cost $1.2 million.

All of these conferences would violate new rules imposed by the White House budget office in 2012 that cap expenses for a single conference at $500,000. In 2010 alone, the IRS had 13 conferences that cost more than that.

By comparison, the General Services Administration was widely criticized for a 2010 conference in Las Vegas that cost $823,000.

Spending on IRS conferences dropped substantially, from $37.6 million in the 2010 budget year to $6.2 million in 2011 and then to $4.9 million last year, according to the IRS.

Acting IRS Commissioner Danny Werfel called the conferences "an unfortunate vestige from a prior era." Werfel took over the agency about two weeks ago, after President Barack Obama forced the previous acting commissioner to resign.

"Taxpayers should take comfort that a conference like this would not take place today," Werfel said in a statement.

The inspector general's report focused on the Anaheim conference, which was held for 2,609 managers in the agency's small business and self-employed division.

At the conference, the commissioner of the tax-exemption division, Christopher Wagner, stayed in a presidential suite that normally cost $3,500 a night. Wagner became chief of the IRS office of appeals in 2011 and retired this year.

His deputy, Fink, stayed in a room that normally cost $1,499 a night, the report said. Fink was promoted to commissioner of the small business and self-employed division in 2011.

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