Investigation: How the IRS Spends Money
Dec. 27 -- The Internal Revenue Service is charged with collecting taxes from Americans in order to pay for the work of government.
But in a three-month investigation, ABCNEWS' Chris Wallace found the IRS is spending millions to recruit and sometimes relocate 34 managers hired to make the agency more efficient and effective.
"It's indefensible to the American taxpayer," said Paul Light, a top expert on government hiring.
When John Duder left a private-sector consulting firm to work for the Internal Revenue Service, for instance, he was allowed to spend up to $260,000 in relocation costs. Recruiting and moving Delena Bratton from California to her new job with the IRS in Washington, D.C. cost about $200,000 in tax dollars.
"When you consider the waste of money by the IRS, you would think that they're printing money rather than collecting the money," said Sen. Charles Grassley, R-Iowa, who launched an investigation when he found out about Duder's move. Grassley said his move to Washington after he was elected to Congress in 1974 cost $200.
'Critical Pay' Issues
The IRS spending spree started back in 1998, when Congress heard a litany of horror stories about the agency abusing taxpayers.
To clean it up, Congress agreed to let the new IRS commissioner Charles Rossotti hire up to 40 people from private industry, employees who could bring new ideas to the agency. To entice executives, they were to be given what's known as "critical pay" — big salaries and lavish benefits.
The IRS helped Duder sell his house in New Jersey and buy a new home near his new job in Atlanta. So far, his move has cost taxpayers $192,000; and Duder is allowed to spend as much as $68,000 more to cover relocation costs.
Experts said that's more than double the average cost for a corporate executive's move. And relocation expenses are just one of the problems.
Critical pay employees can make more than their peers at other agencies — up to as much as $186,000, a little more than the pay of Vice President Dick Cheney. IRS top cop Mark Matthews, for example, makes the top critical salary — more than FBI Director Robert Mueller or Attorney General John Ashcroft.
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