The easy way to fix the I R S from the inside up, is fire every agent and send them to prison for one year that conducted a targeted application, they knew they were doing wrong.
Then fire every supervisor/manager that these people worked for, under neglecting their duty.
Then rather then fire a given manager or supervisor, give them a demotion if they can identify a higher up that gave them direction to target applications.
The firing and/or prison terms of 500 I R S employees will go a long way to send a message to the other 200,000.