Calls Grow for Revoking UNRWA USA’s Tax-Deductible Status

International lawyers send letter to IRS
February 2, 2024
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As scrutiny intensifies on the United Nations Relief and Works Agency for Palestine (UNRWA) following allegations that multiple staffers were involved in the Oct. 7 massacre, there are some growing calls to revoke the tax-deductible status of UNRWA USA, which describes itself as “an independent 501(c)(3) nonprofit that supports the work of UNRWA through fundraising, education, and advocacy in the United States.”

Sen. Tom Cotton (R-Ark.) posted to X, “The IRS needs to immediately revoke UNRWA’s tax-deductible status. It is an organization that employs terrorists who participated in the Oct. 7 massacre.” Cotton, along with Sen. Ted Cruz (R-TX), proposed legislation that would rescind UNRWA-USA’s tax exempt status and bar funding to UNRWA.

Rep. Brian Mast (R-Fla.), who led Tuesday’s House Foreign Affairs Committee hearing on UNRWA, told the Journal via email on if he agrees that UNRWA’s tax deductible status should be revoked: “Revoked yes, but I want it totally eliminated as an organization.” Rep. Joe Wilson (R-SC) told The Washington Free Beacon regarding the tax-deductible status, “That is a pressure point that absolutely should be considered and looked into.”

A letter was sent to Internal Revenue Service (IRS) Commissioner Daniel Werfel on Tuesday by International Legal Forum CEO Arsen Ostrovsky, attorney David Schoen, and National Jewish Advocacy Center Director Mark Goldfeder and senior counsel Ben Schlager urging that the IRS revoke UNRWA USA’s tax-deductible status.

“This week a new intelligence report has brought to light the details of how members of UNRWA were actually among the terrorists who massacred 1,200 people on Oct. 7th, in the deadliest assault on Jews since the Holocaust,” the letter, which was obtained by the Journal, states. “Other UNRWA staffers helped coordinate logistics for the assault (including procuring weapons), and still others held innocent people hostage for weeks and months on end. Per the Wall Street Journal, ‘Intelligence estimates shared with the U.S. conclude that around 1,200 of UNRWA’s roughly 12,000 employees in Gaza have links to Hamas or Palestinian Islamic Jihad,’ both of which are designated foreign terrorist organizations.” The letter also cited a report from U.N. Watch about how 3,000 UNRWA teachers in a Telegram chat “cheered and celebrated” the Oct. 7 massacre.

“It is no longer debatable; UNRWA is Hamas,” the letter states. “Nor is it merely a ‘few rotten apples’ as some politicians and pundits have tried to suggest. The entire organization is a systematic incubator of hate, incitement and terror. That the people of Gaza need assistance is not in dispute, but UNRWA is part of the problem, not the solution. There are ample other vehicles and credible organizations through which aid can be provided, organizations that are not themselves facilitators of terror.”

The letter proceeds to cite IRS rules barring 501(c)(3)s from being “illegal, contrary to a clearly defined and established public policy, or in conflict with express statutory restrictions” as well as Supreme Court precedent that a 501(c)(3)’s tax-exempt status will be rescinded if “there is no doubt that the organization’s activities violate fundamental public policy.”

“Providing support for an organization that incites and commits murderous violence while harboring members of U.S. designated terrorist groups that specialize in killing Jews and that call for Jewish genocide is obviously against both the law and public policy,” the letter concludes. “UNRWA does all of those things, and UNRWA USA supports them. We hereby demand that the exempt tax status of UNRWA USA be immediately suspended, pending an investigation, and then revoked.”

UNRWA USA did not immediately respond to the Journal’s request for comment.

As previously reported by the Journal, the United States is one of 19 countries that suspended funding to UNRWA in light of the allegations that multiple UNRWA staffers were involved in the Oct. 7 massacre. Some Republicans in the House of Representatives have also introduced legislation to permanently defund UNRWA altogether.

White House National Security Council spokesperson John Kirby told reporters on Monday, Jan. 29, “Let’s not impugn the good work of a whole agency because of the potential bad actions here by a small number,” pointing out that UNRWA has 13,000 employees in Gaza that only 13 so far were allegedly involved in Oct. 7. A few Republican Senators wrote in a letter to Senate Majority Leader Charles Schumer (D-N.Y.) and Senate Minority Leader Mitch McConnell (R-Ky.) that they disagree with Kirby, as in their view the allegations against the UNRWA staffers are “emblematic of an organization where no investigation or corrective measures will be enough to cure the rot that is so clearly endemic to their mission.”

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