Delinquent IRS employees paid bonuses by the agency

The Internal Revenue Service was in damage control mode Tuesday after an audit revealed that it paid bonuses to employees who were in trouble over tax issues themselves.

According to CNNMoney, more than $2.8 million, as well as thousands of hours of paid time off, were paid during a two-year period to employees who had been disciplined for misconduct. Roughly $1 million was paid out as bonuses to 1,100 employees who were in trouble over tax-related issues.

The tax problems include willful understatement of tax liabilities, late payments and under-reporting of income, according to the report issued by the Treasury Inspector General for Tax Administration.

Although not required by federal regulations, the IRS has said it will change its policies to consider tax compliance of employees when issuing bonuses, according to the report.

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