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IRS finally admits it targeted Israel-related groups, apologizes

IRS finally admits it targeted Israel-related groups, apologizes

Z Street founder Lori Lowenthal Marcus: “The settlement gives us the truth, but we can’t get back our seven years”

Readers are familiar with the IRS targeting of Tea Party and conservative groups seeking tax-exempt status.

But there has been another targeting story percolating through the court system that has received little attention, until now.

The IRS also targeted groups related to Israel. The facts came to light in a litigation brought by Z Street, which waited 6 years for approval.

The founder of Z Street, Lori Lowenthal Marcus, explained the significance of Z Streets lawsuit against the IRS, and how it related to the IRS failure to preserve documents about Tea Party targeting, in this 2014 interview:

Marcus told the story in an Op-Ed yesterday in The Wall Street Journal, The IRS Campaign Against Israel—and Us:

The first IRS viewpoint discrimination case to be filed, Z Street v. IRS, has been settled, with disturbing revelations about how the Internal Revenue Service treated pro-Israel organizations applying for tax-exempt status.

I founded Z Street in 2009 to educate Americans about the Middle East and Israel’s defense against terror. We applied for tax-exempt status under Section 501(c)(3) of the tax code in December 2009—a process that usually takes three to six months.

Instead, the application languished. In late July 2010, an IRS agent truthfully responded to our lawyer’s query about why processing was taking so long: Z Street’s application was getting special scrutiny, the agent said, because it was related to Israel. Some applications for tax-exempt status were being sent to a special office in Washington for review of whether the applicants’ policy positions conflicted with those of the Obama administration.

Marcus goes on to describe what was learned as a result of Z Street’s 2010 lawsuit, that the IRS was looking for groups that conflicted with Obama’s policies, in this case the disputed territories of Judea and Samaria (the “West Bank”):

Now we know the truth, and it’s exactly as bad as we thought. IRS documents—those they didn’t “lose” or otherwise fail to produce—reveal the following:

• Our application was flagged because Z Street’s mission related to Israel, a country with terrorism. Therefore, an IRS manager in our case said in sworn testimony, the IRS needed to investigate whether Z Street was funding terror.

• Some applications for tax-exempt status were indeed being sent to IRS headquarters in Washington for more intense scrutiny. They were selected because of the applicants’ viewpoint.

• In August 2010, three other Jewish organizations applying for tax-exempt status were asked by the IRS to “explain their religious beliefs about the Land of Israel.”

….The “terror” error turns out to have been a pretext. Within weeks of President Obama’s inauguration, IRS and State Department officials began considering whether they could deny or revoke tax-exempt status for organizations that provided material support to Jews living across the Green Line—the nonborder that delineates pre-1967 Israel from the territories Israel acquired in the Six Day War. The theory was that a Jewish presence in those areas is inconsistent with U.S. policy. The IRS drew up lists of such organizations based on information from anti-Israel websites such as Electronic Intifada and MondoWeiss.

The New York Times and the Washington Post ran articles that advanced the policy espoused by the Obama administration and its nonprofit ally, J Street. Unnamed “senior State Department officials” were quoted as saying that Jewish activity over the Green Line isn’t “helpful” to peace efforts.

While no formal policy was released barring U.S. tax-exempt entities from supporting Jewish activity over the Green Line, Obama IRS officials tried three times between 2009 and 2012 to create such a policy, and IRS employees made sure the effort wasn’t documented. One emailed her supervisor saying that she would answer his questions about IRS policy relating to Israeli settlements only orally. “Not doing email on this,” she explained.

The Z Street lawsuit has just been settled and the IRS has apologized, as this DOJ announcement: reflects

The Department of Justice today announced that it has entered into a settlement with Z Street, a non-profit corporation dedicated to educating the public about various issues related to Israel and the Middle East, pending approval by the United States District Court for the District of Columbia. Z Street alleged that the Internal Revenue Service (IRS) applied heightened scrutiny to applications for tax-exempt status received from organizations connected in any way to Israel, and applied this policy to Z Street’s application, resulting in delay. The settlement agreement includes an apology from the IRS to Z Street for the delayed processing of the group’s application for tax-exempt status.

“Tax exemption eligibility should be based on whether an organization’s activities fulfill requirements of the law, not a group’s policy positions or the name chosen to reflect those views,” said Principal Deputy Assistant Attorney General Zuckerman. “The attorneys at the Department of Justice work hard to ensure that all Americans receive equal treatment under the law. Today’s settlement further illustrates this commitment.”

Marcus summed up the result of the IRS targeting, in language strikingly familiar to those who followed IRS targeting of Tea Party and conservative groups:

To learn the truth, we fought in the courts for seven lonely years—defeating IRS arguments that it didn’t have to obey the First Amendment, that it was immune from the suit, and that it wasn’t obliged to produce in discovery any documents revealing why its employees did what they did. During the seven years Z Street’s application was frozen, it couldn’t raise funds. If my husband and I weren’t lawyers, able to pursue justice without getting paid, there’s no way we could have succeeded.

When Z Street’s creation was announced, thousands sought to join. Then the IRS attempted to kill us. No lawsuit can remedy that assault, as the IRS knew. The settlement gives us the truth, but we can’t get back our seven years.

The Z Street case is another reminder of the danger the politicized Obama bureaucracy posed, and may still pose.


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‘Apologies’ are for sentencing hearings.

We want prosecutions.

The 501(c)(3) exemption category should be reformed. The whole thing has become a tax sham/shelter for special interest- pressure lobby groups. They roll into DC and setup media based ‘expert’ shops. They then offer their interestingly peculiar services to MSNBC, NPR, Politico or Fox. They flood the universty lecture circuits and create Potemkin vilage website fronts.

Tax freedom for scammers and registered foreign agents.

Why should American taxpayers grant special tax welfare exemptions to these supposed non-partisan groups – when we all darn well know they aren’t? We’re passive participants in a scam setup by shifty lawyers and their political handpuppets. I hate being played the fool.

All of these groups need to pay their own way – just like us little people.

    cwillia1 in reply to Tiki. | February 3, 2018 at 7:33 am

    Tiki, Let’s concede your point. The bigger issue is that the IRS must be even handed in administrating the rules we do have. The politicization of the IRS has staggering implications for the integrity of our political life.

      Truly. Figuratively speaking, IRS heads should roll. 501c3 being my most favorite hobbyhorse – in a stable of highly active hobbyhorses.

Sentencing? They will never serve time. The rule of law is gone.

But Lois Lender’s home address is available.

    GeorgeCrosley in reply to Fen. | February 2, 2018 at 6:33 pm

    That’s all well and good, but I’m more concerned about Lois Lerner.

      dunce1239 in reply to GeorgeCrosley. | February 2, 2018 at 11:40 pm

      She is but one of the evil doers, everyone involved should be exiled from our country forever and citizenship given up with their spouse and children and none of them be allowed to return even for a visit. Future a-holes would think very hard and long before a repeat performance. Lerner should be forced to live in Israel under constant threat from muslim murderers.

    “But Lois Lender’s home address is available….”

    What is it?

    “The rule of law is gone…”

    Not once Sessions is dumped.

    maxmillion in reply to Fen. | February 3, 2018 at 1:51 pm

    The rule of law is alive and well, waiting in the wings for a republican or right-winger to be the one in the dock.

David Breznick | February 2, 2018 at 6:27 pm

What we are witnessing is the death spiral of the deep state. It’s fun!

Well, the r and d keys on this tiny phone are adjacent. And I have such huge hands. Huge.

4th armored div | February 2, 2018 at 6:52 pm

imagine the horrors if the harridan of chappaqua had won –


Caudillo Obama’s noxious influence, the predictably corrupt and bitter fruits of an unrepentant law-breaker who had no qualms about illegally and surreptitiously weaponizing every federal agency that mattered, in order to hinder and undermine his political opponents. The behavior of a narcissistic and petty little dictator.

Add the IRS scandal to the FISA Court abuse and you have scandals whose underlying criminality is far worse in both its seriousness and its implications, than Watergate.

    Daiwa in reply to guyjones. | February 2, 2018 at 8:21 pm

    By orders of magnitude.

      guyjones in reply to Daiwa. | February 2, 2018 at 10:58 pm

      My question is, will bigwig Dumb-o-crat donor and film magnate, Steven Spielberg, make a film about these scandals, instead of milking a nearly fifty-year-old scandal that nobody cares about, except Dumb-o-crats who still believe that the event confers upon them permanent moral superiority?

      Or, maybe, Spielberg can make a drama featuring a vanity-driven American President who, in order to kowtow to the Iranian regime during his wholesale capitulation to their whims, quashes a DEA investigation and efforts to stop an Islamic terrorist group’s multi-billion-dollar operation importing cocaine into American cities.

      What a crazy story — except, it actually happened — the most callous and contemptible Executive behavior imaginable, udnertaken by the sainted Obama, whom the Dumbs, the media and the Leftist Hollywood lemmings will defend no matter what.

    He could not have done it without valerie jarrett, nor the Crying Boeheners of the GOPe – who we seem to keep tolerating.

And we all know Hillary was up to her three chins on this plan to shut down any organized American support for Israel. Just like she had to have signed off on Eric Holder arming organized crime gangs in a state we had formal diplomatic relations and treaties with.

One of these day, maybe we’ll find out what Obama knew and when he knew it.

We always knew Obama would bring Chicago style corrupt politics but sure never expected the corruption of FBI, IRS DOJ to happen so quickly.