What’s he trying to do, say that we can’t play politics with IRS?… Just tell George [Schultz] he should do it. — Richard M. Nixon, August 1972
Recently I wrote (“First Amendment, anyone?“) about the difficulties a Zionist organization called Z-Street was having in getting tax-deductible — 501(c)(3) — status from the IRS. Here are some excerpts from a suit filed against the IRS by Z Street (the whole complaint is here):
14. In a letter dated May 15, 2010, IRS Agent Diane Gentry, to whom the Z STREET file had been assigned, sent an IRS Letter 2382 requesting additional information to aid her in her review of Z STREET’s IRS Form 1023 (the “Application”). Z STREET, by its corporate counsel, submitted a response on June 17, 2010, providing all of the requested information, most of which had already been provided in Z STREET’s initial application, including information about each of Z STREET’s board members. In fact, detailed personal information about each Z STREET board member had to be supplied to the IRS three times, a number in excess of the experiences of Z STREET board members for any other board on which they sit…
21. Agent Gentry also informed Z STREET’s counsel that the IRS is carefully scrutinizing organizations that are in any way connected with Israel.
22. Agent Gentry further stated to counsel for Z STREET: “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.”
23. Z STREET, and its President, Lori Lowenthal Marcus, have publicly taken positions on issues relating to Israel that are inconsistent with positions taken by the Obama administration.
24. The IRS’s admissions by Agent Gentry make clear that the IRS maintains an Israel Special Policy governing the processing of applications for tax exemption by organizations which are believed to be operated by persons holding political views inconsistent with those espoused by the Obama administration, and that the Israel Special Policy mandates that such applications be scrutinized differently and at greater length, and therefore that they take longer to process than those made by organizations without that characteristic, or even that the tax-exempt application might be denied altogether on that basis.
In my previous post, I mentioned some other organizations which had received 501(c)(3) status from the IRS, including unindicted co-conspirators in the Holy Land Foundation terror financing case CAIR and ISNA, as well as Codepink, a group which regularly accuses the US of war crimes and has called for support of the ‘Iraqi resistance’ and US military deserters.
This new policy is apparently not only being applied to organizations that are explicitly Zionist, like Z Street. It seems that just being a Jewish group is enough. Consider this anecdote, from a reliable source:
I told the CPA who handled the 501 exemption for my organization a couple of years ago about Lori’s lawsuit. Today he sent me an email telling me that his office is working on a tax exemption for a major Jewish religious organization that holds prayer services and Torah classes where each center files for its own exemption. There is no mention of Israel in its application. They rec’d a letter from the IRS with the following questions:
Does your organization support the existence of the land of Israel? Describe your organization’s belief system toward the land of Israel.
Need I say that the determination of tax status on the basis of the degree of agreement to administration positions is as clear a violation of the First Amendment as can be imagined? Let’s look at some of the background to this.
In the past few months, we’ve seen the development of what could be called “the NGO (Non-Governmental Organization) war.” Opening shots were fired by an Israeli Zionist student group named im tirtzu, which caused a stir when it reported that a large majority of the ‘documentation’ of Israeli ‘war crimes’ in the tendentious Goldstone report on the recent war in Gaza came from 16 left-wing Israeli NGOs, all of which were supported by the US-based New Israel Fund (NIF).
Many of these groups can only be called ‘extremist’, and they are part of the movement to delegitimize Israel. In fact, the NIF’s guidelines did not disallow funding groups that advocate ‘boycott, divestment and sanctions’ (BDS) against Israel. Other NIF-supported groups include Arab organizations which call for the ‘de-Zionization’ of the state.
These NGOs also received millions from the European Union. The Knesset is now considering legislation to require greater transparency in funding of Israeli groups by foreign sources. NGOs are opposing it and have even asked the EU Parliament to consider this issue (talk about interfering with Israel’s sovereignty)!
There’s a cliché about poking a hornet’s nest. Did you ever hear the angry whine of, say, ten thousand disturbed insects? This pretty much describes the response to Im Tirtzu. Groups that benefited from the NIF’s largess, even the Union for Reform Judaism (NIF supports its initiatives in Israel) screamed bloody murder.
But they did more: they counterattacked. In a coordinated campaign in early July including the New York Times and J Street, anti-Zionist forces blasted what they called “pro-settler charities” and suggested that they ought not to have tax-deductible status. The Times article included this:
The use of charities to promote a foreign policy goal is neither new nor unique — Americans also take tax breaks in giving to pro-Palestinian groups. But the donations to the settler movement stand out because of the centrality of the settlement issue in the current talks and the fact that Washington has consistently refused to allow Israel to spend American government aid in the settlements. Tax breaks for the donations remain largely unchallenged, and unexamined by the American government. The Internal Revenue Service declined to discuss donations for West Bank settlements. State Department officials would comment only generally, and on condition of anonymity.
“It’s a problem,” a senior State Department official said, adding, “It’s unhelpful to the efforts that we’re trying to make.”
We’ve learned that on matters relating to the Israel-Palestinian conflict, the Times, J Street and the Obama Administration speak with one voice. And they are telling us in no uncertain terms how they feel about ‘settlers’. But Z Street does not give money to settlements (even if it did, the argument to deny 501(c)(3) status would be tortuous). It’s an advocacy and educational group.
Nevertheless, the Obama Administration — like the Nixon Administration — seems prepared to use the IRS as an instrument to punish dissenters like Z Street.
The same Administration that passionately defends the absolute right of a Muslim group of questionable ideology and funding to build a mosque in a highly sensitive location in the US — some might call it ‘unhelpful’ — has done its best to prevent Jews from building even an extra bedroom in East Jerusalem or Judea/Samaria.
Now it is using its massive power to silence American Zionists who disagree with it.