The seeds of dysfunction were planted a decade ago, current and former agency officials said, with a plan whose goal was improving efficiency.
In 2003, amid complaints that applications for tax-exempt status were being reviewed twice, by a district office and headquarters, IRS officials decided to make Cincinnati the hub for a niche part of the agency—scrutinizing groups with political ties that wanted to be tax exempt.
Cincinnati's rise fed a long-held criticism that the agency was "stove piped," meaning it had a number of divisions that seemed to work independently with little oversight.
It is "an internalized operation focused on moving that pile of applications in the door and out the door," said Marcus Owens, a former top IRS official who oversaw the exempt-organizations division until 2000.
The Cincinnati tax-exempt determinations unit, which employees refer to as "determs," is considered by employees one of the less-attractive IRS posts. Government employees who aspire to join the private sector seek positions that review corporate filings, among other things, former employees said.