The regulator said that the report Plan A+: Creating a Prosperous post-Brexit UK "overstepped the line of what is permissible charitable activity". It argued that the paper "was not sufficiently balanced and neutral as required of an educational charity under charity law".
The commission also criticised the think tank for "undertaking political activity not in line with the charity’s purposes".
This judgment is separate from another Charity Commission investigation into the IEA’s political independence, which was opened in July amid allegations that the think tank had offered donors access to government ministers. That investigation is still open.
Neil Record, chair of trustees at IEA, confirmed that Plan A+, which was published in September, would be removed, but accused the regulator of causing confusion.
"IEA trustees are concerned about the Charity Commission’s interventions," Record said. "We believe it is increasingly unclear what charitable think tank activity is acceptable, and what is not.
"A worrying precedent is in the process of being set: research papers – and their launches – which put forward firm policy proposals may now fall outside the parameters of what the Charity Commission considers acceptable activity."
In response, David Holdsworth, the deputy chief executive of the commission, said that it was "disappointing that the trustees of some charitable think tanks appear not to fully understand their duties and the requirements that charity law makes of educational charities.
"We know that charitable status is something the public consider precious and valuable; and that they expect all charities to maintain high standards of conduct and integrity in order that the special nature of charity is retained."
The IEA now has plans to set up a non-charitable arm for the organisation and is working with the commission as part of this process.