November 21, 2018

Pro-Israel Group Receives Apology from IRS for Unfair Scrutiny

A pro-Israel organization received a formal apology from the Internal Revenue Service (IRS) on Feb. 1 for facing unfair scrutiny from the agency.

The Department of Justice announced that a settlement has been reached between the organization, Z Street, and the IRS after Z street filed a lawsuit against the agency in 2010 for viewpoint discrimination. Z Street claimed that the IRS was slow-walking the organization’s application for tax exempt status simply because Z Street is a pro-Israel advocacy group that was publicly at odds with the Obama administration’s treatment of Israel.

The apology from the IRS is part of the settlement.

“It is improper for the IRS to single out groups for different treatment based on their names or ideological positions,” said Attorney General Jeff Sessions. “Any entitlement to tax exemption should be based on the activities of the organization and whether they fulfill requirements of the law, not the policy positions adopted by members or the name chosen to reflect those views.”

“There is no excuse for this conduct. Hundreds of organizations were affected by these actions, and they deserve an apology from the IRS. We hope that today’s settlement makes clear that this abuse of power will not be tolerated.”

Z Street was designated by the agency as part of the “Occupied Territory Advocacy” subset of the IRS’s “progressive” category; any groups under that subset would be flagged by the agency as needing higher scrutiny.

The IRS claimed they scrutinized Z Street under the auspices “that Z Street might be engaged in the funding of terrorism because ‘there is a higher risk of terrorism in Israel,’” according to Hot Air.

However, as Hot Air points out, none of the publicly available IRS documents on Z Street mentioned anything about terrorism and Z Street was the only organization to be put in that “Occupied Territory Advocacy” subset.

Additionally, the IRS tried to argue in court viewpoint discrimination lawsuits didn’t apply to them, a claim thrown out by the judge.

According to the DOJ, Z Street’s settlement will be among the last between the IRS and organizations that allege the agency subjected them to higher scrutiny over their tax-exempt status applications due to their political viewpoint. Lois Lerner, the former director of the IRS’s Exempt Organizations Unit, admitted that the IRS unfairly targeted conservative organizations. However, Lerner never took responsibility for those actions repeatedly plead the Fifth when Congress grilled her on the matter.