Marc Owens, a former top charity overseer at the Internal Revenue Service, says two headline-making IRS investigations of prominent organizations he represented in recent years on the topic of politicking show that the tax agency is "tone deaf" when it comes to charity oversight and is making "serious blunders that undermine the credibility of the agency."

Both cases centered on public comments made by people associated with the organizations.

In 2004 the IRS began an investigation into whether the National Association for the Advancement of Colored People violated tax laws that ban charities from taking a partisan stance in political campaigns. The IRS told the NAACP it was concerned that a speech by the group's chairman, Julian Bond, might have crossed the line. Mr. Bond's remarks contained criticisms of President Bush's policies and were made several months before Election Day.

The NAACP denied that the speech was improper, and in protesting the IRS's action said that the tax agency had misinterpreted a legal provision that allowed it to examine groups before they have closed the books on their fiscal year. Federal law permits the IRS to audit an organization immediately if its activities "constitute a flagrant violation of the prohibition against making political expenditures."

The NAACP said nothing it had done met that standard. It tried to quickly force the matter into court by demanding the IRS seek information needed for an audit in writing through a summons that the charity then refused to comply with.

But when the IRS turned to the Department of Justice to enforce the summons in court, the department's officials apparently declined to back up the IRS because no action was ever taken, Mr. Owens says.

Two years after the investigation began, the IRS told the NAACP that it had concluded that the charity had done nothing wrong. "Nothing was ever provided to the IRS by the NAACP, so the IRS based its conclusion on exactly the same information it had in its possession when it started the investigation," says Mr. Owens.

The agency's decision to investigate the charity was likely made by IRS agents in a local office and not vetted by higher-up officials, he notes. "It's an example of the Exempt Organizations Division losing track of what the law allows it to do," he says. "They started an audit when it wasn't appropriate."

He adds: "Unfortunately for the IRS, it looked like there was some strategy to support George Bush."

Unfortunate Timing

The IRS never commented on the NAACP investigation because the tax agency is prohibited by law from discussing specific cases. However, Steven T. Miller, then a top IRS charity regulator, said in 2005 that the IRS decided during the 2004 election campaign that it would use the legal provision that allows early audits. "The process was designed to get out as quickly as we could to organizations we determined were worth a look," he said.

A report from the Treasury Department in 2005 concluded that the IRS showed no political bias when it decided to do the audits but that starting them just months before Election Day contributed to a false perception that they were politically motivated.

Sermon in Question

In another case, the IRS began investigating All Saints Church, in Pasadena, Calif., in 2005 because it thought an antiwar sermon by a former rector, delivered the Sunday before the 2004 presidential election, might have violated the ban on partisan activity.

The guest sermon at the Episcopal church was titled "If Jesus Debated Senator Kerry and President Bush." The pastor told the congregation that he did not intend to say how members should vote; he then described what Jesus might have said to the candidates on issues of war and violence, poverty, and hope.

Like the NAACP, All Saints Church denied any impropriety and tried to force the matter into court by demanding that the IRS seek information needed for an audit through a summons that the church then refused to comply with. The Justice Department apparently once again declined to back the IRS because it took no court action to enforce the summons, Mr. Owens says.

The IRS ultimately decided that the church had improperly shown partisan bias during the 2005 campaign but continued to qualify for a tax exemption because the sermon appeared to be a one-time problem and because the church had policies in place to prevent future occurrences.

In the end, "from a tax perspective the church walked away unscathed," says Mr. Owens, "but from an ethical level they were still at loggerheads with the IRS" and demanded an apology from the tax agency.

Mr. Owens says the IRS should never have gone after the church because the former rector was simply exercising his First Amendment rights of free speech and religious expression. "It was not the right place for the agency to be," he says.

What's more, Mr. Owens says, the person at the IRS who authorized the audit of All Saints did not hold sufficient rank to legally make the decision.

In August the IRS acknowledged in newly proposed regulations that it needed to change the rank of the official who is authorized to make decisions to audit churches. A U.S. District Court Judge in Minneapolis ruled in January that a Minnesota church did not have to comply with an IRS summons for information because it was authorized by a government official of insufficient rank — a person with the same title as the official who had approved the All Saints audit, Mr. Owens says.

No 'Bright Line'

The IRS never commented on the All Saints case. But in a 2007 statement, Mr. Miller said that the IRS would work with churches and charities to ensure that they "understand and comply with the law" and "avoid becoming involved in campaign activity."

Mr. Owens says the IRS actions in the NAACP and All Saints Church cases — as well as its actions against other organizations — reveal the IRS's "frenetic desire" to focus on the issue of political-campaign intervention without providing a "better definition of it with a bright line" to help charities follow the law.

"The issue is like the great white whale for exempt organizations now," Mr. Owens says. "The IRS can't seem to let go of it."