'Excessive' IRS Travel Expenses Draw Scrutiny

Wednesday, 24 Jul 2013 11:10 AM

By Sandy Fitzgerald

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Some IRS executives have been getting "significant" travel expenses reimbursed for commuting to Washington, D.C., to work instead of relocating there, a new watchdog report shows.

The IRS spent more than $9 million in fiscal years 2011 and 2012 sending agents around the country, but that amount did not appear “excessive," David Holmgren, a Treasury Department deputy inspector general, told reporters in a conference call Tuesday.

But, according to Politico, some expense reimbursements were much higher than what most agents receive for travel, Holmgren said.

For example, one top official, whose name was not released, was reimbursed $161,000 in 2011 for travel expenses, including airfare, hotels, rental cars, and taxis, along with a per-diem for food and other necessities.

"When you compare that to the average IRS executive [travel expenditure] — which is between $12,000 and $13,000 per year — you can see it’s quite a significant difference,” said Holmgren.

Still, Holmgren stressed, a review found no misconduct. But, he said, the IRS could spend money more efficiently by relocating employees rather than pay their travel expenses.

Citing "this tight fiscal environment," an IRS official said Tuesday the agency has "put in place new procedures to stop the practice of allowing executives to routinely leave their home office to travel to another city to conduct their principal work."

According to Pamela J. LaRue, the agency's chief financial officer, the IRS has more than 300 executives, many of whom are required to travel to meet the requirements of their jobs.

In a statement to accountingtoday.com
, LaRue described the executive positions as "highly specialized," requiring a unique set of skills that includes an understanding of the tax laws, the agency's programs, and technology infrastructure "critical to successfully running a tax system that collects $2.5 trillion a year.

"The employees best prepared to handle these demanding and complex jobs may not always live where the position is located and may not be in a position to relocate, necessitating some additional travel," she added.

The report showed that 15 IRS executives accounted for $1.2 million spent on top-level travel expenses in fiscal year 2011. In 2012, the 15 spent another $1.1 million on travel, accounting for about a quarter of the agency's reimbursed expenses.

Holmgren noted that the executives with the largest travel budgets hold “national headquarters-types of positions . . . but the majority, or all of them, in fact, were not here in the D.C. area,” he told reporters, according to Politico.

The watchdog report issued by Treasury's Inspector General for Tax Administration also noted that some of the executives traveled more days than they worked and lived on the road for more than half the year.

“The cost and frequency of travel for these executives indicate that they may not live in the best location to economically accomplish their roles and responsibilities,” the report suggested.

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