College Admissions Scandal Highlights Lax IRS Charity Oversight

The Internal Revenue Service has suffered major budget cuts—losing more than $715 million in annual funding and thousands of employees since 2010. It weathered fallout after being accused of holding up conservative groups’ tax exemption applications. Now it has taken another hit: An IRS-approved nonprofit is at the center of a sweeping scheme in which wealthy parents paid bribes to get their children into college.

The role of the nonprofit in the scandal, and its concealment of millions of dollars in bribes, has triggered new scrutiny of the IRS, and raised doubts about whether the embattled tax agency can handle ...