Excellent news!

Trouble lies ahead for IRS chief John Koskinen (ethnic Finn), victimizing a pro-Israel group because the Obama government has it in for conservative groups, comes at a cost.

”The pro-Israel group Z Street had its application for tax-exempt status held up at the IRS. When founder Lori Lowenthal Marcus asked why, she was told that IRS auditors had been instructed to give pro-Israel groups special attention and that Z Street’s application had been forwarded to a special IRS unit for additional review. Not to put too fine a point on the legal issues, this isn’t kosher. It’s illegal.”

Federal Appellate Court Affirms Z STREET’s Right to Proceed Against the IRS for Constitutional Violations

CONTACT: Lori Lowenthal Marcus, Z STREET founder

The pro-Israel organization Z STREET was today, once again, vindicated in a court of law in its now nearly five year effort to redress the violation of its Constitutional rights by the Internal Revenue Service. The judges in their Opinion were far more restrained than their reactions to the IRS arguments during the oral argument which took place on May 4, see, but their conclusion was the same.

In a unanimous Opinion issued Friday, June 19, the D.C. Circuit Court of Appeals agreed with and affirmed the D.C. District Court’s ruling that the pro-Israel organization Z STREET correctly brought a lawsuit alleging the Internal Revenue Service violated Z STREET’s First Amendment rights by engaging in viewpoint discrimination.

Z STREET filed its lawsuit against the IRS in August, 2010, on the basis of statements made to its counsel by the IRS agent reviewing Z STREET’s application for 501(c)(3) charitable tax exempt status, filed in 2009. That agent revealed that the IRS has an “Israel Special Policy” which gave differential treatment to tax exemption applications from organizations holding views about Israel inconsistent with those espoused by the Obama administration, scrutinizing such applications differently and at greater length, than those made by organizations which did not hold such views.

The June 19th Opinion in Z STREET v. Koskinen (the IRS Commissioner), written by Judge David S. Tatel, rejected every one of the government’s arguments. First, the Court of Appeals accepted Z STREET’s contention that  Z STREET raised a Constitutional violation claim of Viewpoint Discrimination, and was not simply, as the IRS claimed, seeking to evade “the assessment of taxes.”  What’s more, the Court held that the IRS is not entitled to Sovereign Immunity in a case, like Z STREET’s, which complains of wrongful action by a government agency or its officers or employees.

Of particular significance, the court emphasized the application to this case of ones decided by the Supreme Court that the “tax code may not discriminate invidiously” and that there is a “requirement of viewpoint neutrality in the Government’s provision of financial benefits.”

Z STREET looks forward to the discovery phase of litigation in which it will seek to learn the nature and origin of  the “Israel Special Policy” which the IRS applied to Z STREET’s tax exemption application. Z STREET will seek to learn how such a policy was created, who created it, who approved it, to whom it was applied, as well as all other information regarding this policy.

A series of IRS documents called “Be On the LookOut” lists, which were released by Congress in June, 2013, pursuant to the TIGTA investigation, have already established that, as Z STREET alleges, while Z STREET’s application for tax exempt status was pending, the IRS did indeed create a special category of review for organizations seeking such status, if they were engaged in what the IRS called “occupied territory advocacy.”

Z STREET looks forward to using the discovery process to learn more about the precise nature, origin and effect of this policy, which the DC Circuit has now made clear is a violation of essential Constitutional rights.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.