Hatch Report Details Wasteful Spending at IRS on Long-Term Travel

Finance Chair Raises Concerns with Agency’s Use of Taxpayer Dollars

                                                                                                                                                           WASHINGTON – Senate Finance Committee Chairman Orrin Hatch (R-Utah) today released a new majority staff report highlighting wasteful spending at the Internal Revenue Service (IRS) relating to long-term travel.   The report, which reviewed all employees that traveled more than half of the year, found that in Fiscal Year (FY) 2015, the average length of IRS long-term employee travel lasted an average of 207 days and cost over $1.4 million in taxpayer dollars. Additionally, the Committee selected 15 of these employees for further review and the report highlights several examples of excessive travel costs including specific instances in which employees failed to seek affordable housing accommodations and instead opted for high-end hotels for extended periods of time during official business travel. 

Following the release of the report, Hatch sent a letter to the Internal Revenue Service (IRS) Commissioner John Koskinen urging the Commissioner to better follow the agency’s internal travel guidelines and the Federal Travel Regulation (FTR).

“I write to urge the IRS to better utilize its own internal policies and procedures, without exception or administrative maneuvering,” Hatch wrote. “The Committee found that while the IRS has a number of employees who travel more than half of the fiscal year incurring $1.4 million in travel costs, the IRS has routinely failed to take allowable steps to reduce its travel expenditures. The lack of effort by IRS employees to exercise prudence and economy when utilizing taxpayer funds is concerning, and more importantly, a direct apparent violation of the FTR.”

Additional findings of the report include:

·          In FY 2015, the IRS had 27 employees who traveled 125 business days or more at a total cost of over $1.4 million.

o   §  Average cost of each trip - $52,800.

o   §  Average trip length - 207 days.

o   §  Employees spent 52% of their total travel time in the Washington, DC metropolitan area in FY 2015.

·          Despite having instituted internal guidance limiting executive travel and realigning executive posts of duty in FY 2013, the Committee found evidence that some executives at the IRS are still not geographically located where their primary job duties are.

The report can be found here.

The text of the letter is below and a signed copy can be found here.

December 14, 2016

The Honorable John Koskinen

Commissioner

Internal Revenue Service

1111 Constitution Avenue, NW

Washington, DC 20224

Dear Commissioner Koskinen:

As you are aware, the United States Committee on Finance (“Committee”) has been conducting a review of long-term employee travel practices within agencies under its jurisdiction. Recently, my staff concluded their review of all documentation and written responses provided by the Internal Revenue Service (“IRS”) and have issued a Committee report with their findings, which I have enclosed for your review.

In the course of this review, the Committee found that while the IRS has a number of employees who travel more than half of the fiscal year incurring $1.4 million in travel costs, the IRS has routinely failed to take allowable steps to reduce its travel expenditures. Despite having instituted internal guidance limiting executive travel and realigning executive posts of duty in Fiscal Year 2013, Committee staff found evidence of at least two executives who have been commuting to other cities, at significant cost to the taxpayers, to conduct their primary job duties.

The results of this review are frustrating for two main reasons. First, the Federal Travel Regulation (“FTR”) makes available to the IRS the tools necessary to significantly reduce the excessive travel per diem rates in many of the circumstances reviewed and yet the IRS has elected not to fully utilize them. The IRS has also instituted guidance governing executive travel and yet we see significant exceptions being made to allow executives to commute to other cities. As a result, I write to urge the IRS to better utilize its own internal policies and procedures, without exception or administrative maneuvering. I also strongly urge the IRS to consider additional internal guidance better defining long-term travel (not just for taxable purposes) and instructing approving officials to routinely reduce per diem rates for long-term travel in accordance with Section 301-11.200, Subpart C – Reduced Per Diem of the FTR and Section 1.32.11.8.2.1, Reduced Per Diem of the Internal Revenue Manual.

Second, the lack of effort by IRS employees to exercise prudence and economy when utilizing taxpayer funds is concerning, and more importantly, a direct apparent violation of the FTR. The FTR states that an "agency will not pay for excess costs resulting from … luxury accommodations or services unnecessary or unjustified in the performance of official business."^[1] And yet, Committee staff saw example after example of routine Amtrak Acela trips, black car service, and luxury apartment rentals when reviewing IRS employee travel vouchers. Furthermore, the IRS made woefully insufficient efforts to reduce expenses in ways that would still allow employees to travel comfortably.

I therefore ask that after reviewing the enclosed report, the IRS provide a briefing responding to the report’s findings and outlining the steps that the IRS plans to take to address the concerns and recommendations made. Thank you in advance for your assistance with this request.

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