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IRS Using Tax Dollars for Entertainment and Party Supplies

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The Internal Revenue Service (IRS) is in the news again, and this time Thomas the Tank Engine is involved.

The Tax Inspector General for Tax Administration (TIGTA) released a report analyzing the IRS’s process for reviewing purchase card transactions. Federal employees are provided these government-issued credit cards to make authorized purchases. Under the General Services Administration’s (GSA) SmartPay purchase card program, there is a $3,000 single-transaction limit.

The benefits of purchase cards include “reducing administrative costs and simplifying the acquisition process,” but they can also lead to waste, fraud, and abuse.

And, indeed, the TIGTA report documents waste, fraud, and abuse in the IRS’s use of purchase cards. TIGTA found the lack of timely cancellation of cards when cardholders leave the IRS, the splitting of purchases to exceed the spending limit, a lack of consistency in the reporting of inappropriate use and in the oversight of card spending, and hundreds of improper and potentially fraudulent purchases.

TIGTA reports that 98 percent of purchase cards were not canceled “prior to employment departure.” The risks of ex-employees armed with an agency credit card are obvious.

While “the majority of IRS cardholders appear to use their purchase cards properly,” TIGTA found that more than 249 inappropriate transactions were identified during fiscal years 2011 and 2012. Improper purchase cards transactions, charged to taxpayers, include a popcorn machine rental, and the purchase of the world’s largest crossword puzzle and Thomas the Tank Engine wristbands.

Purchase card abuse is nothing new: other reviews uncovered the purchase of escort services, baseball tickets, and even breast enhancement surgery. The Project On Government Oversight documented several instances of abuse in our Federal Contractor Misconduct Database. In 2002, POGO’s Danielle Brian testified before the House Subcommittee on Government Efficiency about the abuse of purchase cards in the Department of Defense. A 2009 Congressional Research Service report found that abuses of another type of government credit card, the travel card, are costing the government and taxpayers “millions of dollars annually.” POGO has offered suggestions for fixing this problem.

The timing of the TIGTA report could not be worse for the IRS, which was recently accused of having targeted certain political organizations and having flagrantly overspent at a conference. The GSA recently released a memorandum on card compliance, and according to TIGTA, the IRS “plans to develop and implement corrective actions” with regard to purchase card use. The agency needs to do so before their employees buy any more kids’ toys using taxpayer dollars.

Image from Flickr user Infidelic.

By: Jack Scher
Intern, POGO

Photograph of Jack Scher Jack Scher is an intern for the Project On Government Oversight.

Topics: Government Accountability

Related Content: Inspector General Oversight, Waste

Authors: Jack Scher

Submitted by Jabroni at: July 18, 2013
This report is truly disheartening to the american people. Our elected officials have become completely irresponsive to those they are "representing"
Submitted by k at: July 13, 2013
I would like my tax money back.
Submitted by Wenoel at: July 13, 2013
The individuals who misused those cards should go to jail. The cards need to be destroyed and cards should be collected canceled and destroyed BEFORE an ex-employee leaves the premises. We also WANT OUR MONEY BACK! Restitution MUST be made! Especially for the escort services and the breast enhancement!
Submitted by christine at: July 13, 2013
Outrageous!
Submitted by Taxes on senior social security at: July 13, 2013
IRS>. make senior pay taxes on social security chec, which taxes was paid when they was working. That should be stop. So they can partis with the money.
Submitted by DisabledVeteran at: July 13, 2013
I find it interesting that the IRS doesn't believe the rules apply to them. This is just one more example of the fact that our government needs real changes starting with our tax system. We need to implement the Fair Tax NOW! And those of you who don't vote are a big part of the problem. Vote and vote intelligently.
Submitted by Smacarol at: July 13, 2013
Who cares? What they need to do is TAX THE RICH. Then they can run the office however they want to. As long as it isn't us poor slobs who are being cheated every which way.
Submitted by Jack at: July 13, 2013
The entire government operation has turned into nothing but a big fascist ponzi scheme.

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