Internal Revenue Service employees and contractors owe a collective $50 million in back taxes, a new audit by the Treasury Department’s inspector general found.

Of the more than 3,800 IRS employees who owe back taxes, 2,000 have not even established a payment plan. More than 50 of these delinquent employees have remained employed by the IRS for five years or more. All told, nearly 150,000 federal employees failed to pay their taxes, owing a combined $1.5 billion.

Sen. Joni Ernst (R-IA), who requested the audit, says IRS employees’ failure to pay taxes is particularly galling, considering the $80 billion the Inflation Reduction Act allotted to expand the agency’s audit capacity.

“Surely the irony and hypocrisy can’t be missed here: taxpayers are being forced to pay billions more to the IRS to audit America while the agency won’t even collect the tens of millions of dollars in unpaid taxes owed by its employees,” Ernst said.

The Treasury Inspector General for Tax Administration reviewed 1,068 cases where IRS management had initiated disciplinary action against employees for tax issues, and found that management often went easy on them. “76 employees were suspended. Most of these cases involved willful … cases resulting in the employee being suspended for less than 14 days,” the inspector general’s report said.

Of 70 cases where the IRS determined that an employee “willfully” engaged in tax misconduct between October 2021 and April 2023, only 20 were fired—even though the law says that all such employees should be terminated, barring intervention from the IRS commissioner.

“Although the law requires an employee who has either willfully not filed or willfully understated their taxes due to be removed, subject only to the IRS Commissioner’s mitigation, this disciplinary action is not always enforced,” it said.

The IRS was unrepentant in its response to the audit, writing that “for certain offenses, including the willful failure to file a tax return and willful understatement of a Federal tax liability, IRS employees shall be terminated unless the IRS Commissioner decides to mitigate the penalty of termination… The Commissioner exercised this authority.”

There was also an “additional list of 69 substantiated willful” violations which were referred to a “Review Board,” which recommended “mitigating” punishment due to factors such as the employee having worked at the IRS for many years or having gotten positive employee evaluations.

The IRS acknowledged to auditors that “there are no specific written descriptions of mitigation considerations, or policies and procedures, used by” the Review Board.

In addition to not firing employees with tax problems, the IRS also re-hired more than 500 people who had previously left the agency after having known tax, performance, or misconduct issues. More than 300 were hired despite having “unacceptable performance” in their previous tenure at the agency. More than 100 had tax issues, and 15 committed “fraud/theft.” Twenty-four had violated the section of the law that applies to willful tax problems, and 80 others had tax problems that the agency didn’t deem willful.

The inspector general had previously flagged the issue of re-hiring bad employees and as a result, the IRS had agreed to ensure that hiring managers had access to the personnel files of candidates applying for a second stint. But it apparently kept hiring them despite that.

A law “prohibits the IRS from rehiring former IRS employees who were involuntarily separated” for misconduct or poor performance, yet 10 employees fired between 2007 and 2022 were re-hired after the passage of that law.

On Monday, Sen. Ernst called on IRS Commissioner Daniel Werfel to fire offending employees, and refer them for criminal prosecution where appropriate.

Ernst said she is introducing the Audit the IRS Act, which would require “regular tax audits of agency employees” and the termination of those with “seriously delinquent tax debt.”