IRS Credit Cards Bought Hooch & Porn



26/06/2013, by CreditCards-Offer.com


As if its image wasn’t bad enough, the IRS is now looking at another scandal headed its way. This one is bound to cause some embarrassment to any civilized soul. Turns out, due to poor oversight, the Internal Revenue Service allowed some of its employees to charge romance novels, diet pills, booze and even pornography. The IRS credit cards must have been misused when all eyes were on the Tea Party tax returns.

Two of the government agency’s employees bought pornography online and then claimed the credit cards were stolen. In fact, the Treasury Department, who conducted the audit, reported that one worker said his IRS credit cards were stolen at least five times.

The Breakdown

So far, there have been 273,000 different purchases that were not authorized or should not have been processed. The total of those purchases cracked the $1 million mark and is now closer to $110 million. The years, so far, include 2010, 2011 and 2012. While many of the purchases were found to be legitimate, there were many more that would be considered in any business environment.

The investigation revealed that one government employee charged more than $2,500 on diet pills, steaks, a new smartphone, romance novels, bottles for her baby and clothes. That employee is under investigation for misconduct. How would your boss react if you’d used the business credit card to hit the bars and order porn on a hotel television? You’d be fired, right? You might or might not get the courtesy of an investigation, or at least, it would be conducted prior to calling you into the boss’s office. Apparently, that’s not happened yet – or at least, not to all of those employees involved.

Internal Controls Failed

The two years where many of these charges happened, 2010 and 2011, the IRS had internal controls, though rarely ever used them. In order to bypass those controls, employees would actually break down their purchases in order to bypass the $3,000 mark when employees are required to provide extensive documentation. It mattered little to them because they’d simply shuffle their purchases around so that when employees shopped together, they’d be able to swipe many of those IRS credit cards. The inspector general’s office found an additional 34 cases. In all, the purchases totaled $493,000, the report said.

So far, it looks as though close to 100 employees were involved and had their own government credit cards, including 22 workers who had routinely used their credit cards illegally. None of the employees were reprimanded.

IRS Credit Cards Usage

Other improper charges found so far (the investigation hasn’t concluded):

  • More than $3,000 to buy silly door prizes for employees, including sunglasses, stuffed animals and even bandanas. The same credit card was used to also rent a popcorn machine.
  • $418 for novelty decorations and swag at managers’ meetings, including kazoos, bathtub toys and “Thomas the Tank Engine” wristbands.
  • Nerf footballs – $120 worth of them – that were found in a filing cabinet, still in the boxes and never used.

The inspector general, during an investigation out of its office, found what it refers to as “lavish spending sprees” at various employee conferences. Those lavish conferences cost $50 million in tax dollars. What makes this even more painful is the realization that some of these events happened during the heart of the recession, when Americans were struggling just to put food on the table. All the while, the IRS credit cards were used for these extravagant purchases.

Booze and Dinners

This report offers up many events, but there’s one that’s even more frustrating than the others. During a 2010 conference in Washington for tax officials from other countries, the IRS bought 28 bottles of wine for 41 guests. Dinner per person at the event came to $140 per person. Remember all of those limitations on write offs that we must adhere to? The $140 per person cost is four times what the government limits for the rest of us.

Inadequate procedures to identify, report and address inappropriate use leaves the IRS purchase card program vulnerable to repeated violations of applicable laws and regulations,

said J. Russell George, the Treasury inspector general for tax administration.

Meals and Receptions

Before it was over with, the agency had spent more than $50,000 on meals, receptions and meetings during the conference, which lasted five days. Always ready to justify and defend, one IRS spokesperson piped up,

It is important to note that the luncheon described in the report took place in 2010 for an international business meeting of tax officials from several of the world’s largest countries. This meeting is an important forum for international leaders on major tax issues,

he explained.

However, given the excessive purchases for the luncheon, I am directing the IRS business units to more closely review spending in advance for any similar events to ensure all spending is appropriate.

So does this mean criminal charges may be on the horizon? It’s entirely possible, according to acting IRS Commissioner Danny Werfel,

Clearly, any inappropriate card use impacts our bottom line and is cause for concern. Wasteful spending cannot be tolerated, and any employees found to be abusing the system will be held accountable. In fact, we are following up on several inappropriate incidents mentioned in the report, ranging from internal actions to criminal charges.

99.75 Percent

He also said that “more than 99.75 percent” of all purchases made by the IRS adhered to the rules. So…if the total of illegal charges came to $110 million over the three years that was audited, then approximately $36 million per year was stolen, scammed or whatever else you want to call it . And if that $36 million accounts for just ¾ of 1 percent, it would suggest the annual amount that’s charged in credit cards for the agency amounts to more than 13.6 million. That’s a lot of interest to pay on credit cards.

This is just one more scandal the IRS doesn’t need if it’s to continue to justifying overseeing taxpayer dollars. In fact, this just might be the straw that broke the proverbial camel’s back.







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