Just by the nature of what it does, the Internal Revenue Service isn't held in high regard by American taxpayers. So who would be surprised if the agency felt the need to bolster the self-esteem of employees? But blue ribbons for everyone?

According to the Treasury Department's Inspector General for Tax Administration, even IRS employees with delinquent taxes were given performance bonuses last year.

In reality, this bizarre situation arises because the IRS does not tie employee conduct to eligibility for performance-based awards. Moreover, its contract with the National Treasury Employee Union specifically bars the federal agency from considering bad conduct when making such awards.

So, the IG found that the agency paid more than $1 million in cash bonuses and allotted 10,582 hours of extra vacation time valued at about $250,000 to 1,146 employees who did not pay their taxes on time. Included in the group were five employees who had been disciplined by the agency for intentionally under-reporting income.

These awards were included in a total of $2.8 million paid to employees in 2011 and 2012 who had been disciplined within a year of the award for such abuses as drug use, misuse of federal credit cards, making violent threats and making fraudulent claims for unemployment benefits, as well as nonpayment of taxes, the IG reported.

In effect, one might say, the employees were being rewarded for misbehavior. Astonishing.

"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 IG 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."

Three cheers for that. Well, two cheers, maybe.

The Inspector General appears to take the matter more seriously than NTEU President Colleen Kelley. She told USA Today that the IG's critical findings concerned a "relatively small number of employees who may have had some overlap between a performance award review period and a conduct issue."

More broadly, however, the IRS has reported that 311,536 federal employees were tax delinquents in 2011, owing a total of $3.5 billion.

But the nation may have to wait for a new president before these bad conduct issues get cleared up at the tax agency. President Barack Obama's new IRS Commissioner, John Koskinen, has made it clear that he has other matters on his mind. Specifically he intends to come up with new rules defining what is political speech, dragging the agency deeper into the mess that brought it bad press and almost universal condemnation in the recent Lois Lerner controversy.

Mr. Koskinen should get the IRS out of the business of telling non-profit groups what they can say about the way we are governed and instead clean up the mess he has inherited.

No more gold stars for scofflaws and malingerers, please.