Is this any way to run a business?

Questions raised about IRS executive travel

By Jamie Dupree

A new report by the inspector general of the IRS found that a small group of top executives at the IRS ran up "extremely high travel expenses" in recent years, with some basically commuting each week to work in Washington, D.C. by plane from around the nation.

"In some cases, the travel days exceeded the number of business days due to employees remaining in travel status during the weekends and holidays," the report said.

An IRS source told me the most frequent travelers were four different officials inside the tax agency who "work" in Washington, at IRS headquarters, but actually live in Dallas, Minneapolis and Atlanta.

In other words, they would fly weekly to and from Washington, D.C. by plane, and then bill the taxpayer for that travel and their extended stay in D.C. - and it is not a temporary situation, but has been going on for years.

One IRS official, labeled "Executive B" in the report, traveled to Washington, D.C. a total of 282 days in Fiscal Year 2012, claiming almost $127,000 in travel costs. (That's $450/day if you do the math.)

In FY 2011, "Executive B" traveled to Washington 238 days, with total travel costs of almost $116,000.

"In such cases, the cost and frequency of travel indicate that some executives may not live in the best location to economically accomplish their roles and responsibilities," the report noted.

"Executive C" spent 213 days in Washington in FY 2011 at a cost of just over $105,000.

More examples from that same year include "Executive A" spending 290 days in Washington for $88,951 in expenses; "Executive G" spent 193 days in Washington for $86,433 in costs.

While such examples might not seem to make sense to some, it has evidently been seen before at the IRS.

"I retired from IRS 13 years ago," one of my Twitter followers wrote me on Tuesday night, "and it was a common practice even then."

Here is a breakdown of some of the 2011 long-term executive travel by IRS officials to the single destination of Washington, the number of days and the expenses claimed:

Executive D - 172 days - $135,333
Executive A - 290 days - $88,951
Executive B - 238 days - $115,806
Executive C - 213 days - $105,127
Executive G - 193 days - $86,433
Executive E - 179 days - $47,322
Executive K - 174 days - $64,521
Executive L - 173 days - $62,233

Weeks before this report was issued, the IRS quietly approved new travel guidelines, unveiling a "new policy that restricts Executives from being in travel status more than 75 nights in any fiscal year."

But as with most things in government, exceptions to that policy can be approved by the head of the IRS.

One ironic part of that internal memo on long term travel is that it reminded IRS employees that some long-term travel is taxable.

"It is imperative that all Executives incurring long-term taxable travel comply with the requirements outlined," the memo stated.

In a letter attached to the inspector general report, the IRS concedes that extensive regular travel is not in the best interest of the tax agency.

"Moreover, we recognize that in the current fiscal environment, the long-term travel by a few executives represents an excessive expense we cannot sustain," wrote Pamela LaRue, the Chief Financial Officer of the IRS.

You can read the report on IRS executive travel here.

One important note - the investigation of IRS executive travel found no evidence of any wrongdoing.