IRS Spent Taxpayer Money on Porn, Wine, Bathtub Toys, Popcorn Machine and More

The Treasury Inspector General for Tax Administration has released a new report showing abuse and waste of taxpayer dollars on everything from porn and romance novels, to wine and bathtub toys. Bad management and a lack of oversight is being blamed for the transactions.

We identified almost $4,000 in improper decorative and give-away items that were approved through the required IRS process. When these improper transactions were presented to IRS management, they did not concur with our assessment that these items were inappropriate. The IRS does not have an oversight process currently in place to identify potentially inappropriate items purchased, such as items purchased for personal use or cardholders who may be abusing the purchase card. This represents a control weakness because it is the CCS Branch’s functional responsibility to identify and refer instances of inappropriate use.

One woman made 38 transactions totaling $2,655 for what appeared to be personal purchases covered up with fake receipts. Taxpayers paid for her purchases of diet pills, romance novels, steaks and a smartphone, which the report said were falsely categorized as "reference books and office supplies."

And the government credit cards of two other employees, one of them still with the IRS, bought pornography online, the inspector general said.

Both of them reported that their cards had been stolen or compromised, which the report said it hadn't been able to verify or discredit — although it noted that one of the cardholders had reported at least five cards as having been lost, stolen or counterfeited, something the report said the IRS might want to consider a red flag in the future.