( CNN ) -- The Internal Revenue Service has placed two employees on administrative leave in connection with a 2010 conference in Anaheim , California , which cost millions of taxpayer dollars . The employees were not identified in a Wednesday statement from IRS Acting Commissioner Danny Werfel , nor were the exact circumstances of their alleged wrongdoing detailed . The incident involved a party inside a private suite at a hotel in Anaheim , the statement said . Food was allegedly provided free of charge , a violation of standards . Political conspiracy or overzealous scrutiny ? Pending further review , the IRS has started the process of removing the employees . `` When I came to IRS , part of my job was to hold people accountable , '' Werfel said in the statement . `` There was clearly inappropriate behavior involved in this situation , and immediate action is needed . '' Report shows lavish spending at IRS conference . The move came just one day after an audit of the agency showed the IRS spent millions of taxpayer dollars on everything from event planners ' commissions to speakers ' fees to guest prizes to parody videos at the 2010 conference . The beleaguered agency -- already snared in controversy over its targeting of conservative groups seeking tax-exempt status -- spent $ 4.1 million on the conference , with `` questionable expenses '' comprising much of the budget , according to the report released Tuesday by the Treasury Department 's inspector general for tax administration . The audit notes that a large chunk of that money -- about $ 3.2 million -- came from unused funds allocated for hiring . This was in the same year that 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 the overwhelming amount of applications pouring in that year . The August 2010 conference , held by the Small Business/Self-Employed division , had 2,600 attendees at three hotels in Anaheim . Latest on the IRS inquiry . CNN 's Dana Bash and Ashley Killough contributed to this report .
The agency has begun the process to identify the employees . The employees ' names have not been released . The alleged incident involves a meeting at a restaurant during a conference in Chicago .