The Other IRS Scandal

It wasn’t just the Tea Party: it has been widely reported that the IRS also has harassed and discriminated against pro-Israel charities, in particular those that support settlements in Judea and Samaria. In the Free Beacon, Alana Goodman pursues the story:

A Washington Free Beacon investigation has identified at least five pro-Israel organizations that have been audited by the IRS in the wake of a coordinated campaign by White House-allied activist groups in 2009 and 2010.

These organizations, some of which are too afraid of government reprisals to speak publicly, say in interviews with the Free Beacon that they now believe the IRS actions may have been coordinated by the Obama administration.

I missed it at the time, but there was a campaign by anti-Israel forces to deprive these charities of their tax-exempt status because their aims conflicted with Obama administration policies:

The media scrutiny began as early as March 26, 2009, when the Washington Post’s David Ignatius published a column questioning the groups’ tax-exempt status.

Ignatius’s column is here. Ignatius displayed a remarkable obtuseness with regard to the First Amendment:

For many years, the United States has had a policy against spending aid money to fund Israeli settlements in the West Bank, which successive administrations have regarded as an obstacle to peace. Yet private organizations in the United States continue to raise tax-exempt contributions for the very activities that the government opposes.

But the tax laws do not depend, obviously, on whether a charitable organization supports or opposes the policies of the current U.S. administration. Groups like the Sierra Club and the ACLU have often promoted policies at odds with administration policies, but no one has suggested that they should therefore lose their tax-exempt status. And, of course, you can contribute to tax-exempt organizations like the Free Gaza Movement. But somehow the idea took hold that charities lending support to Israeli settlements are somehow different. This idea was promoted by pro-Palestinian groups, who encouraged IRS scrutiny of such organizations:

The American-Arab Anti-Discrimination Committee (ADC) announced the [day after the Ignatius column appeared] that it would begin a campaign of filing legal complaints with the IRS and the Treasury Department to investigate groups “allegedly raising funds for the development of illegal settlements in the occupied West Bank.”

ADC is closely tied to the Obama White House. The president recorded a video greeting to the group’s annual conference and sent two senior administration officials to attend.

The ADC announced in October 2009 that it had expanded its legal campaign against pro-Israel charities and was “working with a number of coalition partners, both nationally and internationally, in conducting this ongoing campaign.”

In July 2010, the New York Times chimed in with a long article titled Tax-Exempt Funds Aid Settlements in West Bank. The Times acknowledged that tax-exempt contributions to pro-Israel organizations are entirely legal, but advanced the idea that they are somehow suspect:

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.” …

Palestinian officials expressed outrage at the tax breaks.

The IRS appears to have taken complaints about pro-Israel charities to heart. The Free Beacon reports:

One pro-Israel targets was HaYovel, which was featured prominently in the New York Times article. Six months after the article was published, the IRS audited the Nashville-based charity, which sends volunteers to work in vineyards across the Green Line.

“We bookend that [New York Times] story. We were the first [group mentioned]. They really kind of focused on us,” said HaYovel’s founder Tommy Waller. “Then six months later we had an audit.” …

Two other organizations—the American arm of an educational institution that operates across the Green Line and the American arm of a well-known Israeli charity that was mentioned in the New York Times article—say they were also audited.

Another organization that was criticized in multiple articles during 2009 and 2010 was audited last year. The organization, like many of the groups with whom the Free Beacon spoke, asked to remain anonymous out of fear of political retaliation and concern that exposure would harm fundraising efforts. …

Concerns that the IRS was targeting pro-Israel groups were first raised publicly by Z Street, a pro-Israel organization run by Lori Lowenthal Marcus.

Z Street filed a lawsuit against the IRS in 2010, alleging its application for tax-exempt status was delayed because it disagreed with the Obama administration’s Israel policy.

The House committees that are looking into the IRS scandal should put this topic high on their agenda. Did President Obama or someone acting at his direction order the IRS to crack down on organizations that disagree with his Middle East policies? Was any similar scrutiny applied to pro-Palestinian groups? Or, perhaps, did IRS officials take their cue from the Washington Post, the New York Times and pro-Palestinian pressure groups and initiate discriminatory policies on their own initiative?

Possibly an investigation will show that audits and delays to which pro-Israel groups have been subjected are random, and not the result of political animus. But given the impressive record of lawlessness that the Obama administration has compiled, no one will take that conclusion for granted.

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