IRS employees who owed back taxes received bonuses

A new government report states that more than 1,100 Internal Revenue Service employees who failed to pay their taxes were collectively rewarded with more than $1 million in cash bonuses and over 10,000 hours in paid vacation.

The Treasury Inspector General for Tax Administration's report, released Tuesday, even showed that at least five employees who received performance awards wound up with the money even after being disciplined for intentionally paying taxes late and underreporting income and tax liabilities for multiple years. In total, from Oct. 1, 2010, to Dec. 31, 2012, $2.8 million in bonuses were handed out to employees who had been cited for everything from drug use to misusing government credit cards.

"While not specifically prohibited by IRS policies, providing awards to employees with conduct issues, especially the failure to pay taxes owed to the federal government, appears to be in conflict with the IRS's charge of ensuring the integrity of the system of tax administration," the report said. "In addition, awards provided to these employees could be put to better use by providing employees who are compliant additional opportunities for awards."

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According to The Washington Post, the IRS is now looking into linking conduct to performance awards, a change that would be subject to union approval.