The agency remains under fire for targeting tea party groups, but Commissioner John Koskinen said the bonuses are needed to retain and attract good employees in a time of cutbacks.
"This is money best spent on our existing employees," he said in an email to agency employees. "The performance award payouts are in recognition of that great work done in very trying circumstances. I firmly believe that this investment in our employees will directly benefit taxpayers and the tax system."
The move didn't sit well with congressional critics who have been stupefied by the agency's targeting of tea party groups and, more recently, proposed rules to crack down on an even broader class of political activities by tax-exempt groups.
"It's hard to think of a group of people less deserving of bonuses than IRS employees. Frankly, this is outrageous," said Sen. Orrin G. Hatch of Utah, the ranking Republican on the Senate Finance Committee.
He said while "not every IRS worker" was involved in the tea party targeting, it sends a "wrong signal" to reward the agency.
Mr. Koskinen is slated to appear on Capitol Hill for an oversight hearing Wednesday.
