IRS Scandal Exploding
The Internal Revenue Service scandal shows no sign of going away any time soon
but instead, appears to be exploding. The abuse of power by IRS officials and
employees is unspeakable. Both sides of the political isle are voicing comments
of utter disgust at wasteful spending of an agency that focuses on making
innocent tax payers account for every last cent of personal spending. A report
by the inspector general released on Tuesday showed that the IRS spent nearly
$50 million on 225 conferences between 2010 and 2012. A meeting for 2600 IRS
employees in Anaheim, California during August 2010, cost more than $4 million
including event planners' commissions, speakers' fees, guest prizes and parody
videos. Acting IRS Commissioner Danny Werfel said one of the conferences was
geared to train new managers of the agency’s auditing group, many of whom were
relatively new at the time, on employee safety and security training. Werfel
said that while the purpose of the trip was legitimate, many of the expenses
were not and vowed the practice would not continue. Tax payer dollars funded the
$50 million conferences and not one of us is happy about it. Reportedly, nearly
$3.2 million came from unused funds allocated for hiring by the IRS - the very
same year the IRS began to single out conservative and tea party groups that
sought tax-exempt status, in part because the agency said it did not have the
personnel to handle increased applications that year. IRS chief financial
officer, Pamela LaRue noted, "The expenditures related to this 2010 meeting are
not reflective of the current spending environment at the IRS or the spending
that has occurred over the past several years." The IRS also reportedly cut
training costs and reduced spending on meetings by 87% since 2010." Although the
average cost per employee was reasonable, the IRS recognizes that a number of
less significant costs warranted additional scrutiny and were not the best use
of government resources," LaRue wrote. LaRue defended the need for large-scale
conferences at the time, noting that nearly a third of managers in the division
under scrutiny were inexperienced. She also associated the massive wasteful
spending on added concerns about security after a Texas man crashed his plane
into the IRS office in Austin, killing himself and two other people. According
to reports, two Internal Revenue Service officials Fred Schindler and Donald
Toda are accused of accepting more than $1,100 in food and gifts during a 2010
conference in California. Schindler reportedly is a top aide to Sarah Hall
Ingram, chief of the IRS’s health-care office. Ingram reportedly presides over
the office that approved tax exemptions when conservative groups allegedly were
Reportedly late Wednesday, Rep. Michael Capuano - Democrat from Massachusetts,
filed a bill - H.R. 2266 - that would require banks with $500 billion or more in
assets, to set up a special reserve account filled with additional capital
beyond that agreed to in a global agreement on capital buffers at the biggest
banks. The Federal Reserve and recently created Office of Financial Research
would calculate the size of an implicit subsidy each bank retains because of
expectations on the part of creditors, shareholders and counterparties that the
government will shield those stakeholders in the event of a 'big bank’s'
failure. The bank will keep an additional capital buffer in the reserve account
based on that amount. The bill is complementary, to legislation introduced in
April in the Senate by Senator Sherrod Brown, Democrat of Ohio and Senator David
Vitter, Republican of Louisiana. That bill would require large financial
institutions with more than $500 billion in assets hold more than 15% of their
assets in equity. The Basel III would have the biggest banks calculate their
capital by looking at tangible common equity rather than risk-weighted system
that is currently included in the global agreement. If approved, the bill would
hit the six biggest banks with more than $500 billion in assets: Bank of America
(BAC), Citigroup Inc. (C), Goldman Sachs (GS), J.P. Morgan Chase (JPM), Morgan
Stanley (MS) and Wells Fargo (WFC). Banks will be permitted to reduce the amount
of capital in their reserve account when they remove units.
U.S. Labor Department reported on Thursday that during week ending June 1, the
number of people who applied for new unemployment benefits fell by 11,000 to
346,000 and initial claims remained in range that indicates a modest improvement
in job-market trends. Average new claims rose by 4,500 to 352,500 to mark the
highest level in six weeks. For week ended May 25, continuing claims fell by
52,000 to a seasonally adjusted 2.95 million.
At the conclusion of its meeting on Thursday, the European Central Bank voted to
maintain its key lending rate at a record low 0.5% and held its deposit rate,
which it pays banks on reserves held at the central bank, at zero.
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June 6, 2013