By Jason Lange

WASHINGTON (Reuters) - Poor screening led the IRS to rehire hundreds of former employees with records of bad behavior including falsifying forms and unauthorized access to taxpayer information, an internal government watchdog found.

Auditors found the Internal Revenue Service between 2010 and 2013 gave jobs to 323 former employees who had displayed unsavory conduct during prior stints at the agency, according to the U.S. Treasury's Inspector General for Tax Administration on Thursday.

The audit looked at roughly 7,000 workers rehired in the period to fill mostly temporary positions.

Among the 323, five of the rehired workers had "serious misconduct" issues, a category that includes threats and sexual harassment. Another five had willfully failed to file federal tax returns. Seventeen falsified employment forms or other documents.

"Based on the types of prior performance and conduct issues we identified, rehiring certain employees presents increased risk to the IRS and taxpayers," said J. Russell George, the inspector general for tax administration.

The watchdog recommended that the IRS consider more thorough screening during its hiring process.

In a letter responding to the report, IRS Human Capital Officer Daniel Riordan said the agency looks into people's backgrounds before hiring them, and that some "issues" may have happened so long ago they don't pose a risk. "IRS already fully considers prior conduct and performance issues before the final job offer is issued to all new hires," he said.

(Reporting by Jason Lange; Editing by Cynthia Osterman)