In the letter, Everson cited 31 tax-shelter abuses that had or could involve nonprofits, including some involving donor-advised funds and non-cash donations that allow taxpayers to claim inflated worth on donations.

"We can see that tax abuse is increasingly present in the sector," wrote Everson, who said that nonprofits are risking "the loss of the faith and support that the public has always given to this sector."

Senate Finance Chairman Charles E. Grassley (R-Iowa) said the letter, "rips off the rose-colored glasses with which we usually look at tax-exempt organizations."

Congress will review the IRS's findings; meanwhile, the nonprofit community has taken initial action, forming the Panel on the Nonprofit Sector which offered a report with suggestions on how to change existing laws and prevent further infractions.

On the whole, the nonprofit sector comprises 3 million organizations and has roughly $8 trillion in assets.