After reading http://www.nytimes.com/2013/05/19/us/politics/at-irs-unprepared-office-s... and noting the "manual process" difficulties involved, it dawned on me that one solution is better computer algorithms to automatically evaluate applications, search for abuse of tax laws (e.g. tax-exempt PACs that shouldn't be).
Google has a knack for developing algorithms that mine vast quantities of data to provide solutions. Maybe they could really help the IRS in areas like this. So give them a contract (or several) to try. The contracts could be written such that Google gets paid a percentage of the increased revenue its algorithms bring in, so we'd only pay for solutions that actually help.