Have we reached the point where it's no longer far-fetched to propose dismantling the IRS?

It's clearly an agency out of control:

More than 2,800 Internal Revenue Service employees who recently had been disciplined received performance bonuses totaling more than $2.8 million between Oct. 1, 2010 and Dec. 31, 2012, a government audit found.

The misconduct ranged from failure to pay taxes to misuse of government travel cards, violation of official-conduct standards and fraud, according to the report by the Treasury Inspector General for Tax Administration. The discipline included written reprimands, suspensions and even removal. The oversight agency said some of the conduct issues might have occurred after an employee earned a bonus.

While the IRS doesn't prohibit bonuses, "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 report said.

For fiscal 2012, the IRS gave bonuses to about two-thirds of its 98,000 employees. Some lawmakers have been critical of the practice.

The report identified nearly 1,200 employees with tax issues or official-conduct violations during the period who received a total of $1.1 million in monetary bonuses, and about 11,000 hours of time off. One employee who was suspended for 10 days in September 2011 received a $1,300 performance award in August 2012, the report said.

The IRS generally doesn't consider conduct issues when administering bonuses, officials told the watchdog office.

For employees represented by the IRS union, the contract specifically states that disciplinary investigations or actions generally won't preclude a performance bonus.

Did you get that?  The damn thing is unionized, and its union protects its members from having "conduct issues" considered "when administering bonuses."