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October 2, 2014 / 8 Tishri, 5775
At a Glance

Posts Tagged ‘Lois Lerner’

Courts Open Window on the IRS’s Political Litmus Tests

Friday, May 30th, 2014

Interest in the Internal Revenue Service’s outrageous practice of subjecting politically conservative groups to discriminatory treatment has died down a bit since the revelations about this scandal first hit the news a year ago. But a court decision that was handed down earlier this week about a similar instance of potential government misconduct may shed more light on the way the Tea Party and other right-wing organizations were given the business by Lois Lerner and the rest of what appears to be a highly politicized bureaucracy at the heart of our tax collection system.

On Tuesday, Federal Judge Ketanje Brown Jackson issued the first substantive ruling in any suit that challenged the IRS’s pose of political neutrality under the Obama administration. The case concerns Z Street, a Philadelphia area-based pro-Israel organization that filed for tax-exempt status in December 2009 because of its role in educating the public about Israel and the Middle East conflict. The group’s founder Lori Lowenthal Marcus wrote in the Jewish Press this week about what followed:

On July 19, 2010, when counsel for Z STREET spoke with the IRS agent to whom the organization’s application had been assigned, that agent said that a determination on Z STREET’s application may be further delayed because the IRS gave “special scrutiny” to organizations connected to Israel and especially to those whose views “contradict those of the administration’s.”

Z Street subsequently sued the government and rightly argued that its constitutional rights had been violated because of the “viewpoint discrimination” that the IRS agent had openly displayed. Now after years of delays, Judge Jackson has ruled that by asserting that Z Street had no right to sue, the government had tried to “transform a lawsuit that clearly challenges the constitutionality of the process … into a dispute over tax liability.” She similarly dismissed the government’s claims of sovereign immunity.

What has this got to do with the Tea Party and its complaints? Plenty.

As the Wall Street Journal editorial page noted yesterday:

This ruling will force the IRS to open its books on the procedures it used and decisions it made reviewing Z Street’s tax-exempt application, procedures it has tried to keep shrouded. As the case proceeds, Z Street’s attorneys can seek depositions from many who have been part of the larger attempt to sit on similar applications by other conservative groups.

In other words, this case may be the straw that breaks the camel’s back of the IRS’s politically prejudicial policies. If an IRS agent can reject or stall a pro-Israel group’s application on the grounds that “these cases are being sent to a special unit in the D.C. office to determine whether the organization’s activities contradict the Administration’s public policies,” then no group, no matter what its political orientation or cause is safe from being subjected to a political litmus test designed by any administration of either political party.

Z Street’s Marcus deserves praise for having the guts to persist in her challenge to the government for years even though the media had little interest in publicizing what appeared to be an outrageous example of how the IRS had become politicized under the Obama presidency. Last year Marcus learned she wasn’t alone when the news about the Tea Party broke. Now, as her legal process unfolds, Americans may get a better idea about how broken the system has become.

Using the IRS to punish political foes is blatantly illegal. If, as we suspect, the Z Street case reveals the sort of internal email traffic that will reveal how widespread this practice has become in the last five years, perhaps even a liberal mainstream press that still thinks the problems at the IRS are a “phony scandal” will start to pay attention.

IRS Political Discrimination Suit by Pro-Israel Group OKed by Court

Tuesday, May 27th, 2014

After nearly four years of litigation, a U.S. federal district court judge instructed the Internal Revenue Service to cease “struggl[ing mightly]” to thwart a lawsuit filed by the pro-Israel organization Z STREET. That lawsuit alleges the IRS violated Z STREET’s First Amendment Constitutional rights. The judge ordered the IRS to file a substantive answer to Z STREET’s Complaint within 30 days.

Z STREET* sought tax-exempt status as a non-profit organization engaged in educating the public about Israel and the Middle East conflict. The organization filed its application in December of 2009.

On July 19, 2010, when counsel for Z STREET spoke with the IRS agent to whom the organization’s application had been assigned, that agent said that a determination on Z STREET’s application may be further delayed because the IRS gave “special scrutiny” to organizations connected to Israel and especially to those whose views “contradict those of the administration’s.”

That statement by the IRS agent, according to the Z STREET board, constituted a clear violation of the Constitution. The government may not treat an organization or person differently because of that person or organization’s political viewpoint. Such action by a government entity constitutes what is known as “viewpoint discrimination.”

Z STREET filed a lawsuit against the IRS alleging that its Constitutional rights had been violated. That lawsuit, Z STREET v. Schulman, IRS Commissioner (now Koskinen) has finally obtained its first substantive ruling.

Several years after Z STREET challenged the IRS in court, several tea party and other conservative groups also claimed the IRS had discriminated against them on the basis of their political viewpoint. On May 10 of last year, the floodgates of criticism burst open when then Director of the IRS Exempt Organizations Division Lois Lerner admitted that the IRS had engaged in certain activity that disadvantaged conservative groups. Lerner referred to that activity at the time as “absolutely inappropriate.”

The ruling in the Z STREET case by Judge Ketanje Brown Jackson on Tuesday, May 27, is the first substantive ruling by a judge in any action brought challenging the political impartiality of the IRS under the current administration.

Judge Jackson summarily rejected the three grounds raised by the government in its effort to thwart Z STREET’s day in court. The first two she rejected because she refused to accept the IRS position that Z STREET was simply complaining about the fact that its application had not been granted.

Defendant struggles mightily to transform a lawsuit that clearly challenges the constitutionality of the process that the IRS allegedly employs when it determines the tax exempt status of certain organizations into a dispute over tax liability as a means of attempting to thwart this action’s advancement.

The judge rejected the third defense – one of sovereign immunity – raised by the IRS by pointing out that the government may not claim it is immune from claims that it is acting unconstitutionally. Indeed, that is the basis for the Bill of Rights.

The IRS must file a substantive response to Z STREET’s Complaint by June 26, 2014.

Since the time the lawsuit was filed, IRS documents were released by a U.S. congressman which essentially confirm Z STREET’s claims and suggest that the IRS agents filed documents with the court that were not truthful.

*The author of this article is the president of Z STREET.

IRS Punished Conservative Non-Profits, Perhaps Also Pro-Israel Groups

Saturday, May 11th, 2013

For more than a year the U.S. Congress has been investigating whether the Internal Revenue Service was inappropriately treating conservative groups seeking tax-exempt status, or burdening such groups with requests and demands which are impermissible, as many had claimed.

Friday, May 10, the IRS person in charge of the division dealing with non-profits, Lois Lerner, apologized for actions taken by the agency which were based on political affiliation.

“That was absolutely incorrect, it was insensitive and it was inappropriate. That’s not how we go about selecting cases for further review,” Lerner said at a conference sponsored by the American Bar Association.

“The IRS would like to apologize for that,” she added.

How did the IRS do this?  By singling out dozens of organizations for additional reviews because they included the words “tea party” or “patriot” in their exemption applications, Lerner admitted.

The Ways and Means Committee has been seeking information on precisely this activity and “the IRS repeatedly denied they were targeting conservative grassroots organizations,” said committee chair Dave Camp (R-MI) in response to the revelation.  He announced  that the committee will soon hold hearings on this now-admitted practice by the IRS.

Camp stated in a press release issued just after the admission of wrongdoing by the IRS, “The IRS absolutely must be non-partisan in its enforcement of our tax laws. The admission by the agency that it targeted American taxpayers based on politics is both shocking and disappointing. The Committee on Ways and Means will thoroughly investigate this matter and will soon hold a hearing to get to the bottom of this situation.  We will hold the IRS accountable for its actions.”

PRO-ISRAEL GROUP SUED IRS CLAIMING TARGETING PRACTICE

While they are at it, the committee might want to ask the IRS whether their list of targets extended beyond political party discrimination. There is evidence the IRS also targeted pro-Israel groups whose positions were potentially inconsistent with the administration’s.

For example, in 2010, the passionately pro-Israel organization Z STREET filed a lawsuit against the IRS, claiming it had been told by an IRS agent that because the organization was “connected to Israel,” its application for tax-exempt status would receive additional scrutiny.  This admission was made in response to a query about the lengthy reveiw of Z STREET’s tax exempt status application.

In addition, the IRS agent told a Z STREET representative that the applications of some of those Israel-related organizations have been assigned to “a special unit in the D.C. office to determine whether the organization’s activities contradict the Administration’s public policies.”

Z STREET’s lawsuit claims the IRS activity constitutes viewpoint discrimination and a violation of its constitutionally protected right of free speech.  The organization is seeking, among other things, complete disclosure to the public regarding the origin, development, approval, substance and application of the IRS policy to treat pro-Israel organizations differently than it does other organizations. (disclosure: this reporter was the founder and president of Z STREET when the litigation was filed.)

At least one purely religious Jewish organization, one not focused on Israel, was the recipient of bizarre and highly inappropriate questions about Israel.  Those questions also came from the same non-profit division of the IRS at issue for inappropriately targeting politically conservative groups. The IRS required that Jewish organization to state “whether [it] supports the existence of the land of Israel,” and also demanded the organization “[d]escribe [its] religious belief system toward the land of Israel.”

For years the IRS has denied it took any such inappropriate actions and has done its best to prevent Z STREET from pursuing its claim of viewpoint discrimination. The IRS even took the position that because Israel is a country “where terrorism happens,” the service was justified in taking additional time to determine whether Z STREET was involved with funding terrorism.  Z STREET is a purely educational organization that has never funded anything, either in Israel or anywhere else.

Coincidentally, after two and a half years of non-movement, the very first hearing in Z STREET v IRS was recently scheduled for the afternoon of Tuesday, July 2, in the Federal District Court of the District of Columbia.

Representatives of several tea party groups rejected the apology offered by the IRS, and insist that steps be taken to prevent such blatant discrimination in the future.

Printed from: http://www.jewishpress.com/news/irs-punished-conservative-non-profits-perhaps-also-pro-israel-groups/2013/05/11/

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