A report released by the Treasury Inspector General for Tax Administration (TIGTA), found that the Tax Exempt/Government Entities Division of the Internal Revenue Service (IRS) examines fewer than 1 percent of the 70,000 applications from groups applying for tax-exempt status each year.

BNA Money and Politics ($$) reports that; "One of the solutions discussed has been to periodically check on whether the organizations are still meeting their tax-exempt purposes and filing requirements. For instance, Congress has discussed the possibility of requiring informal filings by some charities on their fifth anniversary of being recognized as tax-exempt. The advisory committee to the Tax-Exempt and Government Entities unit at IRS recommended an operational review at three years, five years, or some other interval after tax exemption to focus on actual operations, charitable accomplishments, relationships with insiders, and lobbying and political activity."

Could these recommendations be a slippery slope, leading to the IRS assessing a charities' performance?

In November Senator Charles Grassley (R-IA) began investigating six evangelistic ministries for the possible illegal use of donations to finance lavish lifestyles. Four of the six have not responded to Grassley's inquiries and now, Senator Max Baucus (D-MT) the Senate Finance committee chair has joined the effort. Baucus and Grassley sent letters to the groups with a March 31 deadline urging them to cooperate. Some of the targeted ministries argue that their financial information is private and of no concern to the Senator. Importantly, Baucus has subpoena power, which may be the only way to get the information. Their letter states; "One of the roles of the Finance Committee . . . [is] the exercise of oversight over . . . the Internal Revenue Service to make sure that its rules and procedures meet the purpose and intent of the revenue code, including those rules applicable to non-profit organizations. In order to do this effectively, the Committee needs to understand clearly and specifically how non-profit organizations are structured and operate."