IRS scrutiny of pro-Israel group called into question

Josh Gerstein at Politico reports that the same Internal Revenue Service office that singled out Tea Party groups for extra scrutiny also challenged Israel-related organizations, at least one of which filed suit over the agency’s handling of its application for tax-exempt status.

The group in question is called Z Street. It alleges that one of its attorneys was told that its application for tax exemption was delayed and sent to a “special unit…to determine whether the organization’s activities contradict the Administration’s public policies.”

As Gerstein explains, Z Street sought the 501(c)(3) status applicable to most charities, allowing for tax deductible donations. Most of the Tea Party groups that have come under scrutiny applied for 501(c)(4) status, which allows advocacy groups to avoid federal taxes on their operations but doesn’t render donations to the groups tax deductible. However, both kinds of applications are processed in the same Cincinnati office.

What is the IRS’s explanation for investigating Z Street? It admits that applications mentioning Israel received special attention, but says this was because “Israel is one of many Middle Eastern countries that have a higher risk of terrorism.”

This is absurd. Israel may have (or have had) a high risk of being victimized by terrorism. But this fact should create no presumption that groups concerned about, or connected with, Israel are linked with terrorism. And absent that concern, what is the justification for extra scrutiny? Under the IRS’s logic, maybe it should now consider providing extra scrutiny to charitable groups headquartered in Boston.

Under President Bush, the IRS cracked down on “charitable” groups that support or sympathized with terrorists — an outgrowth of the fact that Muslim charities funneled money to Islamic terrorists. But, says Gerstein, President Obama has backed away from this approach, declaring that he thought government rules were unfairly impeding Muslims from carrying through on their religious obligation to donate to charity.

How ironic that the Obama IRS now seems focused instead on a tiny pro-Israel group that questions the president’s approach to the Middle East.

The IRS’s response to Z Street’s lawsuit raises more questions than it answers. The concern, according to the IRS, was not whether pro-Israel groups contradict Obama administration policy, but rather whether they violate “public policy.”

One doubts the ability of bureaucrats to distinguish Obama policy from “public policy.” Giving IRS the benefit of the doubt (but why would we at this point), the stated public policy in question is that the government shouldn’t bestow a benefit on an individual or organization engaged in illegal activity like terrorism, or in an officially disfavored activity such as racial discrimination.

But why would a pro-Israel advocacy group be suspected of engaging in terrorism or racial discrimination?

And how do some of the questions posed to pro-Israel groups relate to terrorism or racial discrimination? Among the inquiries sent to at least one group were:

Does your organization support the existence of the land of Israel?

Describe your organization’s religious belief system towards the land of Israel.

The proper answer to the second inquiry is, none of your damn business.

It’s too early to reach firm conclusions about the allegations in Z Street’s suit against the government. But the matter warrants our close attention.

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