OMB Watch has released The IRS Political Activities Enforcement Program for Charities and Religious Organizations: Questions and Concerns.  Here is the Executive Summary:

The IRS’s new approach to enforcing the ban on partisan activities by charities and religious organizations has raised serious questions about the agency’s interpretation of the law, about evenhanded enforcement, and about the appropriateness of an approach aimed at deterring speech. The Political Activities Compliance Initiative (PACI), has resulted in unresolved audits and lingering questions about the standards used.

This report summarizes the new program procedures, new compliance guidance from the IRS and raises issues and questions that must be addressed to ensure charities and religious organizations can continue to play their essential role in public policy debates. There are two supplements to the report: one detailing the agency’s 2004 enforcement program, and one describing known cases that are currently or have been under investigation.

See also the press release.