IRS rehired problem employees, report finds

Of the more than 7,000 former workers the IRS rehired, 824 had prior performance or behavior issues, the report found.

But at the IRS, bringing problem employees back on board isn't entirely out of the question.

Of the more than 7,000 former employees the IRS hired between January 2010 and September 2013, 824 of them were found to have prior performance and conduct issues, a new oversight report by the Treasury Inspector General for Tax Administration found.

TIGTA reviewed a random sample of more than 300 employees who had conduct or performance issues in the past and found that 20% had developed new issues during their second go-round.

Problem behaviors have included employees who willfully failed to file their taxes, gained unauthorized access to taxpayer information, abused the agency's leave policy, misused IRS property, falsified official forms, did a bad job or had behavioral or legal problems off-duty, such as alcoholism or bankruptcy.

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"Based on the types of prior performance and conduct issues we identified, rehiring certain employees presents increased risk to the IRS and taxpayers," said J. Russell George, Treasury Inspector General for Tax Administration.

TIGTA found that the IRS followed the federal government's "suitability standards" for considering a job applicants' past offenses and concluded that nothing "would prohibit the IRS from hiring these individuals."

But the oversight report suggested this wasn't enough.

It cited one instance in which the file for a former problem employee was explicitly marked "Do Not Rehire" because the person was "absent without leave for 312 hours." Yet the person was rehired anyway.

In response to TIGTA's findings, the IRS noted in the report that it revamped its hiring process in 2012 and now "appropriately considers prior conduct and performance in hiring decisions."

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TIGTA, however, would like the agency to "reassess its current processes to more fully consider prior conduct and performance issues before rehiring employees."

Earlier this week, IRS Commissioner John Koskinen told the Senate Finance Committee that over 99% of the agency's employees are compliant with their taxes - the highest compliance rate of any U.S. government agency, he noted.

CNNMoney (New York) February 5, 2015: 6:59 PM ET

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