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New IRS head: Taxpayers no longer trust agency

Official also seeking increase in budget

  • Acting IRS Commissioner Danny Werfel, left, accompanied by Treasury Inspector General for Tax Administration J. Russell George, testifies on Capitol Hill in Washington, Monday, June 3, 2013, before the House Appropriations subcommittee on Financial Services and General Government hearing regarding a report that the IRS spent about $50 million to hold at least 220 conferences for employees between 2010 and 2012. (AP Photo/Charles Dharapak)

    Acting IRS Commissioner Danny Werfel, left, accompanied by Treasury Inspector General for Tax Administration J. Russell George, testifies on Capitol Hill in Washington, Monday, June 3, 2013, before the House Appropriations subcommittee on Financial Services and General Government hearing regarding a report that the IRS spent about $50 million to hold at least 220 conferences for employees between 2010 and 2012. (AP Photo/Charles Dharapak)

  • House Financial Services and General Government subcommittee Chairman Rep. Ander Crenshaw, R-Fla., speaks on Capitol Hill in Washington, Monday, June 3, 2013, during the subcommittee's hearing regarding a report that the IRS spent about $50 million to hold at least 220 conferences for employees between 2010 and 2012. (AP Photo/Charles Dharapak)

    House Financial Services and General Government subcommittee Chairman Rep. Ander Crenshaw, R-Fla., speaks on Capitol Hill in Washington, Monday, June 3, 2013, during the subcommittee's hearing regarding a report that the IRS spent about $50 million to hold at least 220 conferences for employees between 2010 and 2012. (AP Photo/Charles Dharapak)

  • House Appropriations Committee Chairman Rep. Hal Rogers, R-Ky., right, talks with House Financial Services and General Government subcommittee Chairman Rep. Ander Crenshaw, R-Fla.,  on Capitol Hill in Washington, Monday, June 3, 2013, at the start of a hearing with acting IRS Commissioner Danny Werfel, as investigations continue by the Republican-controlled House into the extra scrutiny the IRS gave tea party and other conservative groups that applied for tax-exempt status.  (AP Photo/J. Scott Applewhite)

    House Appropriations Committee Chairman Rep. Hal Rogers, R-Ky., right, talks with House Financial Services and General Government subcommittee Chairman Rep. Ander Crenshaw, R-Fla., on Capitol Hill in Washington, Monday, June 3, 2013, at the start of a hearing with acting IRS Commissioner Danny Werfel, as investigations continue by the Republican-controlled House into the extra scrutiny the IRS gave tea party and other conservative groups that applied for tax-exempt status. (AP Photo/J. Scott Applewhite)

  • Acting IRS Commissioner Danny Werfel, left, accompanied byTreasury Inspector General for Tax Administration J. Russell George, testifies on Capitol Hill in Washington, Monday, June 3, 2013, before the House Appropriations subcommittee on Financial Services and General Government hearing regarding a report that the IRS spent about $50 million to hold at least 220 conferences for employees between 2010 and 2012. (AP Photo/Charles Dharapak)

    Acting IRS Commissioner Danny Werfel, left, accompanied byTreasury Inspector General for Tax Administration J. Russell George, testifies on Capitol Hill in Washington, Monday, June 3, 2013, before the House Appropriations subcommittee on Financial Services and General Government hearing regarding a report that the IRS spent about $50 million to hold at least 220 conferences for employees between 2010 and 2012. (AP Photo/Charles Dharapak)

  • Acting IRS Commissioner Danny Werfel testifies on Capitol Hill in Washington, Monday, June 3, 2013, before the House Appropriations subcommittee on Financial Services and General Government hearing regarding a report that the IRS spent about $50 million to hold at least 220 conferences for employees between 2010 and 2012. (AP Photo/Charles Dharapak)

    Acting IRS Commissioner Danny Werfel testifies on Capitol Hill in Washington, Monday, June 3, 2013, before the House Appropriations subcommittee on Financial Services and General Government hearing regarding a report that the IRS spent about $50 million to hold at least 220 conferences for employees between 2010 and 2012. (AP Photo/Charles Dharapak)

  • Acting IRS Commissioner Danny Werfel, left, and Treasury Inspector General for Tax Administration J. Russell George talk on Capitol Hill in Washington, Monday, June 3, 2013, prior to testifying before the House Appropriations subcommittee on Financial Services and General Government hearing regarding a report that the IRS spent about $50 million to hold at least 220 conferences for employees between 2010 and 2012. (AP Photo/Charles Dharapak)

    Acting IRS Commissioner Danny Werfel, left, and Treasury Inspector General for Tax Administration J. Russell George talk on Capitol Hill in Washington, Monday, June 3, 2013, prior to testifying before the House Appropriations subcommittee on Financial Services and General Government hearing regarding a report that the IRS spent about $50 million to hold at least 220 conferences for employees between 2010 and 2012. (AP Photo/Charles Dharapak)

  • Acting IRS Commissioner Danny Werfel, left, accompanied by Treasury Inspector General for Tax Administration J. Russell George, testifies on Capitol Hill in Washington, Monday, June 3, 2013, before the House Appropriations subcommittee on Financial Services and General Government hearing regarding a report that the IRS spent about $50 million to hold at least 220 conferences for employees between 2010 and 2012. (AP Photo/Charles Dharapak)
  • House Financial Services and General Government subcommittee Chairman Rep. Ander Crenshaw, R-Fla., speaks on Capitol Hill in Washington, Monday, June 3, 2013, during the subcommittee's hearing regarding a report that the IRS spent about $50 million to hold at least 220 conferences for employees between 2010 and 2012. (AP Photo/Charles Dharapak)
  • House Appropriations Committee Chairman Rep. Hal Rogers, R-Ky., right, talks with House Financial Services and General Government subcommittee Chairman Rep. Ander Crenshaw, R-Fla.,  on Capitol Hill in Washington, Monday, June 3, 2013, at the start of a hearing with acting IRS Commissioner Danny Werfel, as investigations continue by the Republican-controlled House into the extra scrutiny the IRS gave tea party and other conservative groups that applied for tax-exempt status.  (AP Photo/J. Scott Applewhite)
  • Acting IRS Commissioner Danny Werfel, left, accompanied byTreasury Inspector General for Tax Administration J. Russell George, testifies on Capitol Hill in Washington, Monday, June 3, 2013, before the House Appropriations subcommittee on Financial Services and General Government hearing regarding a report that the IRS spent about $50 million to hold at least 220 conferences for employees between 2010 and 2012. (AP Photo/Charles Dharapak)
  • Acting IRS Commissioner Danny Werfel testifies on Capitol Hill in Washington, Monday, June 3, 2013, before the House Appropriations subcommittee on Financial Services and General Government hearing regarding a report that the IRS spent about $50 million to hold at least 220 conferences for employees between 2010 and 2012. (AP Photo/Charles Dharapak)
  • Acting IRS Commissioner Danny Werfel, left, and Treasury Inspector General for Tax Administration J. Russell George talk on Capitol Hill in Washington, Monday, June 3, 2013, prior to testifying before the House Appropriations subcommittee on Financial Services and General Government hearing regarding a report that the IRS spent about $50 million to hold at least 220 conferences for employees between 2010 and 2012. (AP Photo/Charles Dharapak)

His agency under relentless fire, the new head of the Internal Revenue Service acknowledged to Congress yesterday that American taxpayers no longer trust the IRS amid a growing number of scandals – from the targeting of conservative political groups to lavish spending on employee conferences.

But Acting Commissioner Danny Werfel declared he was “committed to restoring that trust.” He said he has installed new leadership at the agency and is conducting a thorough review of what went wrong and how to fix it.

He promised the transparency that was lacking for several years as Tea Party groups complained about harassment by the IRS, only to be met with denials from the agency.

“We must have the trust of the American taxpayer. Unfortunately, that trust has been broken,” Werfel told a House Appropriations subcommittee in his first public appearance since taking over the agency nearly two weeks ago. “The agency stands ready to confront the problems that occurred, hold accountable those who acted inappropriately, be open about what happened, and permanently fix these problems so that such missteps do not occur again.”

“It has to start,” Werfel added, “with a recognition that a trust has been violated.”

Werfel testified at a difficult time for the agency. Criticized from inside and outside the government, Werfel went to Capitol Hill to ask for a big budget increase. President Obama has requested a 9 percent increase in IRS spending for the budget year that starts in October, in part to help pay for the implementation of the new health care law.

House Republicans have voted 37 times to eliminate, defund or partly scale back the Affordable Care Act, and many are not eager to increase funding for an agency that will play a central role in enforcing compliance.

“We will have to think very carefully about how much money to provide to the IRS,” said Rep. Ander Crenshaw, a Florida Republican, chairman of the House Appropriations subcommittee on financial services and general government.

Werfel acknowledged that it would be a “mistake” to ask Congress for more money to address the agency’s recently revealed problems. But, he added, the IRS is seeking additional money to enforce tax laws, improve taxpayer services and implement initiatives.

“I’m prepared to defend the increase that we’re asking for,” he said.

An inspector general’s report last month said IRS agents improperly targeted conservative political groups for additional scrutiny when they applied for tax-exempt status during the 2010 and 2012 election campaigns.

The revelations have prompted investigations by three congressional committees and the Justice Department. The inspector general, J. Russell George, is also continuing his review.

George, who testified at the same hearing as Werfel, hinted Monday that more revelations could be coming. George told lawmakers he is also looking into bonuses received by IRS employees, and expects to release a report in the fall. He did not elaborate, however.

The agency’s previous acting commissioner was forced to resign, another official retired and a third was placed on paid administrative leave.

A new inspector general’s report, to be released Tuesday, says the IRS spent $50 million to hold at least 220 conferences for employees between 2010 and 2012.

The conference spending included $4 million for an August 2010 gathering in Anaheim, Calif., for which the agency did not negotiate lower room rates, even though that is standard government practice, according to a statement by the House Oversight and Government Reform Committee.

Instead, some of the 2,600 attendees received benefits, including baseball tickets and stays in presidential suites that normally cost $1,500 to $3,500 per night. In addition, 15 outside speakers were paid a total of $135,000 in fees, with one paid $17,000 to talk about “leadership through art,” the committee said.

“I am absolutely appalled at the apparent waste of taxpayer dollars on frivolous conferences,” said Rep. Harold Rogers, R-Ky., chairman of the full Appropriations Committee. “It seems we have a new misstep every day at the IRS.”

Werfel has called the conference “an unfortunate vestige from a prior era.”

White House spokesman Jay Carney said the president had not seen the forthcoming report dealing with IRS spending, but he also said Obama believes the IRS conduct was not appropriate.

“He is concerned by, and has been, excessive spending by the IRS and other agencies when it comes to conferences and travel, and has taken action accordingly,” Carney said. “It’s very important ... that the American people have faith that the IRS, in particular, is applying our tax laws in a fair and responsible way.”

Obama appointed Werfel as acting head of the IRS and ordered him to conduct a 30-day review of the agency’s operations.

“Wherever we find management failures or breakdowns in internal controls, we will move to correct these problems quickly and in a robust manner,” Werfel said. “As we move forward with our work, we will be transparent about what we learn, our specific plans for improvement, the actions we take and the results achieved.”

On Monday, Werfel named three top assistants to help him review IRS operations and make improvements.

Heather Maloy will become deputy commissioner for services and enforcement, W. Todd Grams will be chief of staff, and David Fisher will serve as a senior adviser to Werfel and chief risk officer. Maloy has been commissioner of the agency’s large business and international division for three years. Grams is a senior official in the Veterans Affairs Department, and Fisher was a top official in the Government Accountability Office.

Legacy Comments12

The American taxpayer NEVER trusted the IRS, they simply use fear tactics to get compliance. They are bureaucratic, inflexible, career public servants single tasking.

We need to do a total overhaul audit of all govt depts, federal and state. We have too many managers, pols etc, wasting our tax dollars. I bet we would all be quite shocked to find out where our tax dollars go, like expensive art for pols offices, and all the free perks. I read the barbershop and the hair salon used by the pols in WA is running yearly losses of like 400, 000 and 350.000 every year. Let the Pols pay for their own haircuts.

I watched the hearings yesterday and I was shocked at what the IRS put these folks through. The threats, and the questions were unbelievable. McDermott is an idiot. Hopefully the lower level employees will get the message that they are about to be thrown under the bus to protect higher ups. Time for tax reform folks. We need to take the power away from the IRS. The thought of that Dept handling our health care is frightening.

George Will: The loss of trust: ......The scandals are interlocking and overlapping in ways that drain his authority. .......Liberalism’s agenda has been constant since long before liberals, having given their name a bad name, stopped calling themselves liberals and resumed calling themselves progressives, which they will call themselves until they finish giving that name a bad name. The agenda always is: Concentrate more power in Washington, more Washington power in the executive branch and more executive power in agencies run by experts. Then trust the experts to be disinterested and prudent with their myriad intrusions into, and minute regulations of, Americans’ lives. Obama’s presidency may yet be, on balance, a net plus for the public good if it shatters American’s trust in the regulatory state’s motives. Now, regarding Obama’s second-term agenda. His re-election theme – re-elect me because I am not Mitt Romney – yielded a meager mandate, and he used tactics that are now draining the legitimacy an election is supposed to confer.

You know what else I noticed? Obama called Fluke to console her for being called a slut. Has Obama called any of the Conservative groups that were targeted by the IRS?? No...he sends Axelplouffe...(Plouffarod?) out and says it would be the dumbest political effort of all time. Yep...just a customer service problem that they should avoid in the future.

How about they cancel all conferences and then they have $50 million freed up...... Any chance Congress would like to bring up their jaunts around the world. How about the bonuses they pay staff. Rep. Mike Thompson (D-Calif.) gave out bonuses that were 60 percent above the average salary for each of the other three quarters of the year. Others gave as much as 65 percent of the average salary. Seems they have plenty of money to give out. How about that $750,000 soccer field for the detainees at Guantanamo last year...... There is so much waste in government that it truly borders on criminal. Nobody in the jobs care because they are all doing it.

I also think that we need to reign in Obama excesses as well, like $4M vacations, etc. He needs to lead by example and sacrifice like the rest of us.

Absolutely, top down. The website where I saw the Thompson bonus issue, Thompson (Dem.) said he sets his budget high for unforeseen issues and then when he has money left over he gives it out in bonuses to his staff. Besides Congress members who or what agency gets to pick a number out of the sky for a budget and then give away the overage. Now there is a scandal by his own admission, but again it is all legal in our government.

Here we go with partisan crap again. This is nothing new, for instance - Those who criticize the cost of Obama’s Christmas vacation don’t want you to know that George W. Bush spent at least $20 million taxpayer dollars just on flights to his ranch in Crawford. ---- So please if you don't like President Obama, fine but try to be a little objective. Personally I wouldn't spend $10.00 to get to Texas. The biggest problem in DC is that political appointees usually have zero experience for the job. As a result they are only figureheads and the bureaucracy runs itself powered by entrenched career bureaucrats, not partisan politicians. Basically the tail wags the dog. You are all a little naive if you try and pigeon hole this as a simple case of liberal vs. conservative. This is a case of too much power running amok not necessarily from the top down as is normal

Still no answer to the most important question. Who ordered the targeting of conservative groups??

If I were to take an educated guess I would suspect mid level managers trying to make a name for themselves. But, if you also look at the times, TP groups were coming out of the woodwork in large numbers. The key to staying out of IRS cross hairs is to not stand out or bring attention to yourself. They have too much power and as is the case with almost any entity - power corrupts. To add a little political perspective to this highly charged issue. The TP was more of a threat to the GOP establishment than it ever was to Democrats, so casting this all on Obama's head is really ludicrous. The only thing I am sure of is that the more hearings that are held, only signals that nothing will actually come out of them and it will remain business as usual at my least favorite Department.

The year the IRS started targeting the conservatives, there were less applications than the year before. So the idea that they were swamped with Apps is Apps did increase the following year. But to say they got hit the year before and had to figure out a better system is a lie. Not sure how the TP was more of a threat to the Reps. This admistration will try to withold evidence, try to throw lower level employees under the bus and create distractions with the hope folks will give them a pass. I do not think that will work with the IRS issue. I think the lower level employees will not allow themselves to be used as scapegoats. And now none of us want the IRS handling the ACA.

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