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IRS official apologizes for conference spending

WASHINGTON -- The Internal Revenue Service official who helped organize a $4.1 million California conference featuring parody videos, taxpayer-paid gifts and upgrades to lavish hotel suites apologized yesterday and said the agency used poor judgment.

"In hindsight, many of the expenses that were incurred should have been more closely scrutinized or not have been incurred at all," Faris Fink, commissioner of the IRS small business and self-employed division, said at a congressional hearing.

Fink described a culture at the IRS that did not blink in 2010 at what the Treasury Department inspector general described this week as excessive spending. But Fink, who was promoted the following year, said the agency is "now in a very different environment." "We would not hold this same type of meeting today," he told the House Committee on Oversight and Government Reform.

When asked by committee chairman Darrell Issa (R-Calif.) "What were you thinking?" when Fink played Spock in a "Star Trek" video about a planet with ineffective auditing practices, Fink called the spoof played at the conference "an attempt, in a well-intentioned way, to use humor to open the conference."

"The fact of the matter is that they're embarrassing . . . they're embarrassing, and I regret the fact that they were made," Fink said of that video and another featuring IRS managers in a line dance that closed the three-day event.

The committee is investigating $49 million in conference spending by the IRS from fiscal 2010 to 2012, focused on the Anaheim, Calif., training event for 2,600 managers in the small business and self-employed division in August 2010.

IRS Inspector General Russell George revealed in an audit this week that the agency paid top dollar for hotel rooms, tens of thousands of dollars for gifts for managers in attendance, and $135,000 for outside event planners to book hotel rooms and speakers, one of whom cost taxpayers $27,500 -- plus $2,000 for a first-class plane ticket.

Issa said the IRS was "effectively guilty of tax evasion" when it gave managers lodging in presidential suites, free meals and gifts without disclosing the perks as income.

Some managers got free upgrades to lavish hotel suites and free breakfasts but then were still reimbursed by the government for the free meals.

"We essentially paid for breakfast twice," Gregory Kutz, the assistant inspector general who conducted the audit, told the committee.

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