WASHINGTON -- Two new government reports have sharply criticized the management of the Internal Revenue Service, saying misconduct by some senior officials threatens the integrity of the tax collection system.
IRS officials said that while the ethical lapses were not widespread, those that were uncovered have shocked the zTC agency into making changes aimed at ending corruption and misbehavior among its employees.
Much of the soul-searching by the agency was prompted by a 2 1/2 -year investigation of misconduct begun in 1988 by the House Government Operations Subcommittee on Commerce, Consumer and Monetary Affairs, led by Representative Doug Barnard Jr., D-Ga.
The committee report, made public last month, described "a pattern of improper and possibly unlawful conduct by a significant number of senior IRS employees." The investigation was prompted by allegations from agency employees.
A second report, prepared by a panel of outside experts, said that while the great majority of IRS employees were "honest and industrious," the "problems of integrity and abuse within the IRS are serious."
That report, appointed by the commissioner of internal revenue, Fred T. Goldberg Jr., to review the response of the agency to the disclosures of misconduct, is to be released next week.
The pattern of improper conduct cited in the congressional report included conflicts of interest among senior criminal investigators, misuse of travel funds, improper acceptance of gifts, harassment of employees who reported misconduct, and failure to discipline officials engaged in misconduct.
While only eight cases were investigated in detail, the subcommittee said it had information about more than 60 other allegations of misconduct by senior officials.
The report said wrongdoing by senior managers "has often been ignored entirely or been ineptly investigated," and that "a mind set has existed" to protect the agency's public image "above all else," thereby discouraging the investigation of misconduct.
It added that there is "pervasive fear" among agency employees that reporting misconduct or cooperating with an investigation would lead to retaliation.
The study by the Goldberg panel found that action taken by the service to reverse such abuses frequently dealt with "symptoms rather than root causes, providing narrow, albeit relevant solutions."
The report called for major changes in the agency's criminal investigations division, including more centralized authority for oversight of investigations.
The agency has already begun to carry out a program to root out ethical abuses and other misconduct.
It has transferred responsibility for investigating misconduct by senior officials to the office of the Treasury inspector general.
"The Internal Revenue Service is on the threshold of radical transformation and will be a profoundly better agency," Mr. Goldberg said in an interview Friday.