While the IRS assault on Tea Party groups is well known, another equally disturbing development is taking shape at the beleaguered agency.

Alana Goodman of The Washington Free Beacon reported…

Lawsuit Alleging IRS Discrimination Against Pro-Israel Groups Moves Forward

A lawsuit alleging that the IRS discriminates against pro-Israel groups will be allowed to move forward, a federal judge ruled this week in Washington, D.C.

The IRS has been fighting to quash the lawsuit filed in 2009 by pro-Israel group Z Street, claiming the court does not have jurisdiction to hear the matter.

However, Judge Ketanje Brown Jackson rejected the agency’s request to dismiss the case on Wednesday and ordered the IRS to respond to Z Street’s complaint within the next 30 days.

Z Street says its constitutional rights were violated by an IRS policy that allegedly singles pro-Israel groups out for stricter scrutiny when they apply for tax-exempt status.

According to the lawsuit, an IRS official told Z Street’s lawyer in 2009 that the group’s application for tax-exempt status would be “sent to a special unit in the D.C. office to determine whether the organization’s activities contradict the administration’s public policies.”

Eugene Volokh provides more insight at The Washington Post…

Did IRS illegally specially scrutinize “Israel-related organizations”?

That’s the ultimate question in the Z Street litigation; yesterday, the district court rejected some of the government’s preliminary procedural objections, and allowed the case to go forward (Z Street v. Koskinen (D.D.C. May 27, 2014)). Here’s a summary of the claim (some paragraph breaks added):

Plaintiff Z Street … is a non-profit corporation in Pennsylvania that is dedicated to educating the public about various issues related to Israel and the Middle East…. The complaint alleges that the Internal Revenue Service … violated the First Amendment when it implemented an internal review policy that subjected Israel-related organizations that are applying for tax-exempt status under Section 501(c)(3) of Title 26 of the U.S. Code to more rigorous review procedures than other organizations applying for that same status. Plaintiff maintains that this so-called “Israel Special Policy” represents impermissible viewpoint discrimination on the part of the federal government, and has requested declaratory and injunctive relief….

Read Volokh’s entire post for more background on the case.

This news began brewing well over a year ago but these recent revelations are stunning.

 
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