The wrong side of Z Street

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.

Z Street filed a lawsuit against the IRS in the rosy dawn of the Age of Obama; the lawsuit has failed to get beyond the IRS’s motion for dismissal. The Free Beacon’s Alana Goodman wrote about the lawsuit here last year when the DC District Court denied the IRS motion to dismiss the case. Z Street’s Lori Marcus wrote about it here. John wrote about it in 2013 in the post “The other IRS scandal.”

The legal positions asserted by the IRS are ludicrous. Indeed, they are a pretext to preclude discovery until President Obama and the malefactors serving his pleasure have moved on. The case is a sidebar to the political corruption of the IRS that remains one of the great untold stories of the Age of Obama.

The IRS appealed the denial of its motion to dismiss to the DC Circuit Court of Appeals. Last month a panel of three DC Circuit judges heard the IRS appeal. The hearing did not go well for the IRS. Indeed, it was an exercise in righteous humiliation of the Department of Justice. The Wall Street Journal took a look at the hearing in the reported editorial “The IRS goes to court” (accessible here via Google).

Working with unusual swiftness, the DC Circuit handed down its opinion today. The court unanimously rejected the arguments advanced by the IRS. The court’s opinion is accessible online here.

Z Street is now free to pursue its claim and conduct discovery. Z Street comments:

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.

Perhaps some day there will be a day of reckoning and perhaps some day someone will take note of the array of wrongs committed by the IRS on behalf of the Obama administration.