Auditing the IRS

Toby Marie Walker, the spry grandmother who heads the Waco Tea Party, had big plans for the 2012 election year: a blogging boot camp for local Texas activists and the purchase of the state voter file to get voters to the polls. But as the year dawned, she found her organization hobbled by a faceless foe: the Internal Revenue Service, which had been sitting on her group's application for nonprofit status since July 2010.

As a result, the group was forced to set aside money for a possible tax bill if its application was denied. And donors became skittish after a...