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Z STREET, a pro-Israel group, brought a lawsuit against the IRS for viewpoint discrimination

At one point during the argument, Judge Sentelle interjected: “I’m going to ask you what may be an unfair question, but where is the process now?”

The government lawyer had to admit that the IRS placed a hold on Z STREET’s application because it sued the Agency, a gambit the court learned was purely discretionary, and is only available when an applicant commences litigation over the status of its application and not, as every judge who has thus far considered the matter has insisted is the case for Z STREET, for a lawsuit over the process of the application, not the result.


Towards the end of the argument, Chief Judge Garland asked:

“You don’t want that to be our take away here, that the government’s position is the IRS is free to discriminate on the basis of viewpoint, religion, race, for 270 days?

“I think if I were you I would go back and ask your superiors whether they want us to represent that the government’s position in this case is that the government is free to unconstitutionally discriminate against its citizens for 270 days.

“I would be stunned if the current Attorney General agreed with that. Or the last Attorney General. Or the one before that, or the one before that. Or anyone. That can’t be the position. Now, do you want to think about it again, whether you really want that to be your position,” the Chief Judge stated.

In response, the lawyer for the IRS pointed out that many of her superiors were sitting in the courtroom, listening.

In addition to the drama of a federal agency essentially admitting its best argument was that it is allowed to discriminate against certain groups – in Z STREET’s case, a group whose views about Israel differ profoundly from this administration’s, the purely legal procedural claims made by the IRS were resolutely rejected by the court based on recent and conclusive precedents from both the D.C. Circuit appellate court (in a decision issued by the full court, not just a three judge panel) and from the U.S. Supreme Court.

“We’ve decided every issue before us today, against you,” Chief Judge Garland stated incredulously.

The court finished mopping up the floor with the IRS for the day when Judge Sentelle sought once again to elicit an explanation from the government for its conduct thus far towards Z STREET.

McLaughlin attempted to paint Z STREET as being in the wrong, because had it waited just 31 more days to file its lawsuit, it would be at 270 days and could have properly brought a 7428 action. Right, that’s the one that doesn’t apply, as the court had repeatedly explained to the lawyer, because Z STREET is not asking the court to grant it tax exempt status.

“And they’re years away from it now, due to the actions of the IRS,” he thundered.


*This reporter is the president of Z STREET.


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Lori Lowenthal Marcus is a contributor to the A graduate of Harvard Law School, she previously practiced First Amendment law and taught in Philadelphia-area graduate and law schools. You can reach her by email:


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