By Jennifer Liberto@CNNMoneyMay 16, 2013: 2:01 PM ET
The Internal Revenue Service group under fire in the current scandal was overworked, understaffed and lacked a layer of experienced middle managers, according to two former IRS employees.
"You have agents muddling through, trying to do their best with the law they're given, the workload they're given and with the folks they have at that office," said former IRS attorney Philip Hackney, who worked in Washington from 2006 to 2011, and advised Lois Lerner, director of the unit that approved applications from groups seeking tax-exempt status.
Staffing was "too small" to "quickly and accurately" review the volume of applications it was dealing with, according to Hackney.
By 2012, the IRS was dealing with twice as many applications from groups wanting a tax-exempt charity status that would also allow them to dabble in politics. The trend began after a 2010 Supreme Court ruling allowed unlimited corporate and union campaign contributions.
Both Hackney and Marcus Owens, an attorney who ran the IRS' tax-exempt group under fire in the 1990s, say the group lacked a key layer of senior level agents and middle managers that might have caught these problems.
What's behind the IRS controversy?
Over the years, the Exempt Organizations group under fire was slow to replace managers and senior staff who departed or left the IRS, leaving it with what Hackney called a "vacuum of institutional knowledge."
"They just don't quite have the middle-level management that would have been telling them: 'Don't put 'Tea Party' in there as a search term,'" Hackney said.
The Exempt Organizations unit was also treated more harshly than other parts of the IRS -- like a "stepsister," said Hackney, now a tax law professor at Louisiana State University.
Departments of the IRS that raise revenue tend to get more resources, he said. Reviewing charity applications doesn't raise any money.
The division receives 60,000 paper applications from groups seeking charity status each year.
"Of that 60,000 applications, the vast majority are from PTAs (parent teacher associations), scout troops and Little Leagues -- the main thing is getting their address right and we want to get them done quickly," said Owens, who is now an attorney at the tax advisory firm of Caplin & Drysdale. "Bobbing along in this river of applications are some real zingers."
Owens said it can be tough finding complicated applications that need a tougher review in a sea of applications.
The watchdog report confirms these accounts -- from 2010 through 2012, new "coordinators" and "managers" took over the case on 8 different occasions. The report doesn't detail how or why so many new faces came on board.
Generally, the IRS has been plagued with a wave of retirements and departures, losing some 10,000 employees in the past two years, or over 9% of its total workforce.