From a comparative view of the IRS scandal using the legal ethics rules (altho, admittedly, the legal ethics rules don't govern for the most part), two aspects of the IRS scandal stand out: (1) the IRS's duty of candor (as to prior false statements and as to ongoing requests for information) to the Congress in its oversight role; and (2) the law and prudence of "reporting up" bad news. Legal ethicists immediately think about the provisions of MR 3.3 and 1.13. As I've commented previously, it seems to me that key players in the IRS actively concealed their bad conduct and were deceptive to the Congress about the conduct.
We've also discussed the decision made by various players not to "report up" the matter to the president and I've commented that I have seen no law requiring that and that political prudence dicated not reporting up. Professor Stephen Bainbridge analyzed the issue with a comparison to corporate law and was critical of the failure to report up.
The WSJ is now reporting that the IG was governed by a provision of law requiring that it immediately report up serious problems to the head of the agency within seven days. The IG did not do that in this case, reasoning that such letters were rare and that it was better to complete the investigation first.
But suppose that the IG had reported up to the head of the IRS, or that the IG had signaled to the head of the IRS that such a letter may be forthcoming, or that the head of the IRS knew that such reports were commonly done in a timely way. That threat would be analogous to the theory behind 1.13, in that a lawyer may use the express or implicit threat of reporting out to force the client to do the right thing. Had that happened here, it would have permitted the IRS to come clean to Congress, the president, and the nation in a timely way.
[edited since posting]