IRS Apologizes to Pro-Israel Z Street for Delaying Non-profit Status

AP/J. David Ake

The Internal Revenue Service (IRS) formally apologized last week to a pro-Israel group called Z Street for a six-year delay in processing its application for non-profit status — a delay that was a result of the unconstitutional scrutiny of conservative groups in general.

The settlement marked the end of the last of the IRS scandal cases, most of which were settled last year with a government apology and payout.

The IRS flagged Z Street‘s application in 2010 as a result of bias against Israel within the Obama administration, as well as an administrative error that the government admits in the settlement agreement.

That error was to consider pro-Israel groups under a set of more stringent criteria, under the bizarre rationale that since terrorism happened in Israel, against Israeli targets, funds for pro-Israel causes posed a risk of supporting terrorism.

In addition, the government admits that the IRS had developed a specific memorandum on “Occupied Territory Advocacy” that could have affected Z Street’s tax-exempt application — but it says that the memo is lost.

Left unexamined is the question of whether Z Street was singled out as part of a deliberate policy by the Obama administration to punish American charities whose work might have benefited Israeli citizens living in Judea and Samaria — i.e. in the territories the Obama administration envisioned for a Palestinian state. (As Phyllis Chesler points out, the IRS showed few, if any, concerns about pro-Palestinian charity groups.)

The far-left J Street group, which worked closely with the Obama administration, publicly announced in 2010 that it would lobby the U.S. Treasury to target those charities. Shortly thereafter, Z Street’s tax-exempt application hit a wall at the IRS.

In any case, the Department of Justice declared that the settlement reinforced the government’s commitment to “equal treatment under the law,” and the IRS acknowledged that “criteria for selecting tax-exempt applications and/or tax- exempt entities for IRS review should focus on the activities of the organizations and whether they fulfill the requirements of the law, and not on the applicants’ political viewpoints.”

Six years too late, of course — and without any punishment of the IRS officials involved, nor sufficient explanation about how much the higher-ups in the Obama administration and the Democratic Party knew about what the IRS was doing.

In fact, some of the Democratic leaders who called on the IRS to do exactly what it did remain unapologetic. And had Hillary Clinton won the 2016 presidential election, there is no doubt that the Democrats would have tried to pass laws to legalize what the IRS had done.

As Lori Lowenthal Marcus, Z Street’s founder, told Chelser, “I very much doubt ours and the Tea Party cases would have settled had this new administration not been in office.”

Joel B. Pollak is Senior Editor-at-Large at Breitbart News. He was named to Forward’s 50 “most influential” Jews in 2017. He is the co-author of How Trump Won: The Inside Story of a Revolution, is available from Regnery. Follow him on Twitter at @joelpollak.

This post has been updated.


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