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Ahead of hearing, U.S. Senate Republican scolds IRS over bonuses

WASHINGTON, Feb 3 (Reuters) - The chief of the U.S. Internal Revenue Service will testify before a congressional committee this week for the first time since taking over at the tax agency in December, with one Senate Republican already taking him to task over employee bonuses.

Orrin Hatch, the senior Republican on the Senate Finance Committee, criticized IRS Commissioner John Koskinen for reinstating 2013 performance bonuses for IRS workers.

"It's hard to think of a group of people less deserving of bonuses than IRS employees," Hatch said in a statement.

Republicans have been hammering the IRS for months since a controversy erupted in mid-2013 over agency employees' subjecting applications for tax-exempt status from conservative political groups to extra, time-consuming scrutiny.

On Wednesday, Koskinen is scheduled to testify in the House of Representatives before the tax-writing Ways and Means Committee on a range of IRS-related topics. It will be his first appearance before the Republican-controlled House as IRS chief.

On Thursday, members of the House Oversight Committee will hold a hearing specifically to discuss the so-called Tea Party targeting affair that has recently faded from view. Witnesses have not been announced yet.

Koskinen said on Monday in an email to IRS employees that bonuses halted in part by budget cuts last year would be partially reinstated at about 1 percent of base salaries.

In a statement, the IRS said it expects to pay out about $62.5 million in performance bonuses, including $43.4 million to union workers and $19.1 million to managers and other employees.

The IRS paid $89.1 million in performance bonuses in 2012.

"This is money best spent on our existing employees," Koskinen said in the email obtained by Reuters.

Koskinen has said that one of his top priorities is to restore public trust in the agency since the IRS's Tea Party saga.

In an interview with Fox News that aired before the NFL's Super Bowl game on Sunday, President Barack Obama said "some bone-headed decisions" were to blame for the extra scrutiny the IRS had applied to conservative Tea Party groups and that the issue had been cleared up during "multiple hearings" in Congress.

(Editing by Kevin Drawbaugh)