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New IRS head says taxpayers no longer trust agency

By Stephen Ohlemacher

Associated Press

LAST UPDATED: 01:13 p.m. HST, Jun 03, 2013

WASHINGTON » His agency under relentless fire, the new head of the Internal Revenue Service acknowledged to Congress today 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 Barack 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, R-Fla., 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 today 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."

Werfel today 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.

Associated Press writers Alan Fram and Josh Lederman contributed to this report.

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Uncleart66 wrote:
Out of control.
on June 3,2013 | 01:25PM
loquaciousone wrote:
No longer? Where has he been?
on June 3,2013 | 01:28PM
busterb wrote:
That's what I say, no matter who's in the White House, no matter the decade, you have to have trust in something at some point in time in order to no longer trust it.
on June 3,2013 | 01:49PM
serious wrote:
This reminds me of the colonel who checks on the lieutenant and asks: Have you lost control of the situation? The Lt says, No Sir, I never had control. IRS losing the Trust--they never had the trust!
on June 3,2013 | 01:29PM
punishum wrote:
but now there is proof as to why
on June 3,2013 | 01:53PM
Anonymous wrote:
Time to stop paying taxes. Majority of it goes to line peoples pockets anyway. But if we must continue to pay, Lets pay our politicians minimum wage and let our teachers have the politicians salaries instead. That would be money well spent.
on June 3,2013 | 02:03PM
loquaciousone wrote:
You go first and let us all know how it turns out.
on June 3,2013 | 02:16PM
Aieagrl wrote:
That's one of the problems plaguing our "It's not in the job description" society. Sure I do it alone, I pay a huge fine and get locked up. However we all band together, for the same cause and we can move mountains.
on June 3,2013 | 04:02PM
thepartyfirst wrote:
Paying taxes is voluntary per the Constitution of the United States.
on June 3,2013 | 06:46PM
thepartyfirst wrote:
on June 3,2013 | 08:49PM
ready2go wrote:
How much does it cost to pay for the President's vacation in Hawaii?
on June 3,2013 | 02:39PM
DAGR81 wrote:
IRS lavish spending...Why not? Just following their leader obama.
on June 3,2013 | 05:07PM
sluggah wrote:
And we trusted them before???? Sherlock is on the case!
on June 3,2013 | 02:47PM
HD36 wrote:
What other government agency presumes you guilty?
on June 3,2013 | 03:59PM
Nevadan wrote:
Is this going to be IRSgate? During his past two years, Obama spent most of his time on his re-election. He didn't know that the IRS targeted the Tea Party?
on June 3,2013 | 05:39PM
residenttaxpayer wrote:
The new head of the Internal Revenue Service acknowledged to Congress today that American taxpayers no longer trust the IRS .....no kiddin..Sherlock...the 50 million dollar question is..WHO IS GOING TO JAIL??....
on June 3,2013 | 05:46PM
saywhatyouthink wrote:
I'd like to see more heads roll, maybe even jail time is warranted for some of these offenses. This wasteful convention issue just happened not long ago with another federal agency, seems like it may be a government wide problem.
on June 3,2013 | 06:27PM
mikethenovice wrote:
The Republican are trying to embarrass the Democrats with the IRS blunder. If a Republican President had been elected, The GOP would be mum on this.
on June 3,2013 | 06:42PM
mikethenovice wrote:
I trust the IRS. They give me good tax saving advice wheneve I call them up. They correct my math on my income tax form for a larger refund. Very noble and very honest indeed.
on June 3,2013 | 06:43PM
sailfish1 wrote:
I would feel better towards the IRS if they start collecting all the unpaid taxes and prosecuting the tax evaders. The amount of unpaid taxes is mind boggling - it would definitely help to possibly reduce the tax rate.
on June 3,2013 | 07:02PM
HulaHair wrote:
Yes sailfish1, you are absolutely correct.
on June 3,2013 | 08:19PM
Oio wrote:
Pay Taxes by Your Useage: Vote yes for "War", pay tax. Vote No for "War", no pay tax. Vote yes for fix-roads, pay tax. Vote No for "fix roads", no pay tax. Vote yes for "Alcohol", pay tax. Vote No for "Alcohol", no pay tax. Then IRS tallys up your score and send you the bill.
on June 3,2013 | 09:16PM
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