IRS spent more than $121 million on travel charge cards for employees and ‘leniently’ disciplined those who abused them: Report

  • Report finds that more than 1,000 IRS  employees abused their government-issued charge cards
  • IRS officials demonstrated a pattern of  being overly lenient when  punishing employees who misused charge cards, or who  failed to pay their bill on time

By  Daily Mail Reporter

PUBLISHED: 13:50 EST, 14  June 2013 |  UPDATED: 13:50 EST, 14 June 2013

A recently released report by the Treasury  Inspector General for Tax Administration finds that in fiscal years 2010 and  2011, more than 1,000 employees at the Internal Revenue Service misused  Citybank-issued charge cards designated to pay for employees’ work-related  expenses. During those same fiscal years, the report finds that IRS employees  issued approximately 325 bad checks to Citybank to pay the balance on the charge  cards.

Additionally, the report concluded that IRS  officials demonstrated a pattern of being overly lenient when punishing  employees who misused the charge cards, or who failed to pay their bill on  time.

The IRS spent $121 million in travel expenses for its employees in one year 

The IRS spent $121 million in travel expenses for its  employees in one year

‘Of particular concern is the fact that the  IRS ask taxpayers to  voluntarily pay taxes owed in a timely manner and yet was  more tolerant  when its employees became delinquent and defaulted on outstanding  payments, violated the terms of the Citibank contract, abused a  Government-provided resource (travel funding), and compromised the  integrity  of the IRS,’ the report notes.

In other words, the report finds that  oftentimes when employees at the agency – which drops the hammer on citizens who  don’t pay their taxes in a timely  manner – fail to pay their bill or abuse a  charge card, they aren’t punished to nearly the same degree as average citizens  who are late on their taxes.


In 1998, then-President Bill Clinton  signed  a law that requires federal employees to use a ‘government-issued travel charge  card’ to pay for most job-related travel. IRS employees  use Citybank cards,  which are billed in one of two ways: directly, or  centrally.

For centrally  billed cards, the bank bills  the IRS directly. For directly billed  cards, the bank bills individual  employees, who are then reimbursed by  the IRS.

Employees are not permitted to use the cards  for anything other than IRS-related travel expenses.

The report finds that while the IRS is  generally effective in controlling  how the cards are used, ‘in some instances  controls were not implemented effectively, which  increased the risk for misuse  and resulted in some travel card misuse  going undetected.’

'Do as I say, not as I do': the IRS is lenient towards its employees who abuse government-issued charge cards, or who can't pay their bill on time 

‘Do as I say, not as I do’: the IRS is lenient towards  its employees who abuse government-issued charge cards, or who can’t pay their  bill on time

Examples of card misuse include, among other  things, use of the card by someone other than the cardholder, use while not on  official travel, purchases from an  unauthorized merchant and failure to pay on  time.

According to the report, obtained by, ’15  cardholders with either secret or top-secret clearances had their  travel  accounts suspended due to their failure to pay outstanding  balances. Two other  cardholders with secret and  top-secret clearances presented NSF [non-sufficient  funds] checks to  Citibank for payment of their travel card balance.’

Additionally, ’94 cardholders serving public  trust positions requiring moderate and  high-level background checks wrote one  or more NSF checks, and 36 had  their accounts charged off [written off as a  loss by Citibank] due to  their failure to pay outstanding balances.


‘For example,’ the report states, ‘a tax  compliance officer wrote seven NSF  checks in FY 2011 while occupying a position  that required a  moderate-risk background investigation.’

By the end of 2011, 51,974 IRS employees had  their own Citybank travel cards. In all, they ran up a $121 million bill, which  is paid for by taxpayers.

To get an idea of how the IRS punished those  who abused the card, the IG’s Office examined 30 cases of travel card misuse and  determined that officials are very lenient when disciplining abusers.

‘While the CCS Branch correctly referred  misuse cases to Labor  Relations, disciplinary actions against employees were  typically less  severe than those recommended by the IRS’s penalty guidelines in  approximately half of the 30 cases reviewed,” according to the  report.

The report also determined that ‘the IRS  lacked standard policies for  referring employees who misused their travel cards  to security personnel to determine if background checks, security clearances,  and suitability for employment determinations required reevaluation. As a  result,  employees who wrote NSF checks or had suspended or charged-off accounts  received little or no disciplinary action in response to their misuse  and did  not have their background clearances reevaluated for suitability for  employment.’

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