AUDIE CORNISH, HOST:
The IRS is on the receiving end of another critical audit. This one finds that the agency spent nearly $50 million on training conferences over a three-year period. The IRS was already on the defensive for giving extra scrutiny to conservative groups seeking tax exempt status.
NPR's Scott Horsley reports.
SCOTT HORSLEY, BYLINE: A watchdog report, to be made public tomorrow, says the IRS hosted more than 200 employee training conferences between 2010 and 2012. Congressional critics have already seized on some frivolous looking videos produced for those meetings, including this one showing workers from the agency's small business division as they struggle to master a line dance.
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UNIDENTIFIED WOMAN: To the right. To the right. To the right. This is harder than doing an op review. To the left. We're trying to get ready for Anaheim.
HORSLEY: Anaheim is where the IRS hosted a 2010 conference for some 2,600 employees. The $4 million price tag was partly covered with unused funds from the Tax Collectors Enforcement budget.
The new commissioner of the IRS calls the Anaheim meeting an unfortunate vestige from a prior era. Danny Werfel says there have been no similar large-scale conferences in the last three years. And he notes, the IRS has cut spending on travel and training by 80 percent during that period. Nevertheless, congressional critics are not reassured.
REPRESENTATIVE DARRELL ISSA: It doesn't stay fixed.
HORSLEY: That's Republican Congressman Darrell Issa of California on CNN. Issa chairs the House Oversight Committee, one of at least three congressional panels now investigating the IRS.
ISSA: If you don't keep reminding the voters, but also the federal workers, that we're watching, this will happen again.
HORSLEY: The inspector general's report on conference spending is another black eye, for an agency already bruised by charges that it selectively enforced limits on politicking by groups seeking tax exempt status. A watchdog report found agents in the Cincinnati office of the IRS subjected Tea Party groups and other conservative sounding organizations to additional time-consuming scrutiny.
Issa's investigators are trying to show the direction for that scrutiny came from higher-ups in the Obama administration.
ISSA: My gut tells me that too many people knew that this wrongdoing was going on before the election and allowed these groups - these conservative groups; these, if you will, not friends of the president - to be disenfranchised through an election.
HORSLEY: Tomorrow, the House Ways and Means Committee will hear from some of the affected groups, including Linchpins of Liberty, the San Fernando Valley Patriots and the Wetumpka Alabama Tea Party.
While the IRS screening process was clearly suspect, tax experts say some scrutiny is justified, since groups that have electioneering as their primary purpose are not eligible for tax exempt social welfare status. Law professor Lloyd Mayer, of Notre Dame, worries that a hobbled IRS will be less aggressive at policing the improper use of secret donations to influence elections.
LLOYD MAYER: I think there will be a temptation to just lay off, to say let's just let these applications through. And some groups that maybe shouldn't be approved, that maybe are aggressively interpreting the law, will get away with doing so for longer.
HORSLEY: Misconduct by our IRS could also feed cynicism about the president's signature health care law. Republican Senate leader Mitch McConnell has been eager to remind voters of the prominent role the tax collector will play in ObamaCare, enforcing the requirement that people carry health insurance and collecting a fine from those who don't.
SENATOR MITCH MCCONNELL: For many Americans, that's going to mean submitted to probing questions about their health insurance. Questions like: Do you have insurance, what kind of insurance is it, does it follow our rules. And if the people at IRS don't like your answers you'll be hit with new taxes.
HORSLEY: McConnell suggests the best solution would be to simply repeal the health care law but he admits, I wouldn't hold my breath on that one.
Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.