Wednesday, November 24, 2010
Is Failure to Support Obama Administration's Foreign Policy Grounds to Deny Charity's Tax-Exempt Status?
- NY Times: Charitable Deduction Subsidizes Israeli Settlements, Contrary to U.S. Policy (July 7, 2010)
- Lawsuit: IRS Using Bob Jones University to Deny Tax-Exempt Status to Pro-Israel Charity (Aug. 26, 2010)
Z STREET, an organization devoted to pro-Israel public education, today filed in federal court its Opposition to the government’s effort to continue violating the US Constitution by discriminating against the organization because its views on Israel and the Middle East differ from those of this government. On August 25, 2010 Z STREET filed a Complaint in federal court charging the IRS with constitutional violations by subjecting Z STREET’s application for tax exemption to a discriminatory process.
- Jewish Policy Center Israel Advocacy and the IRS
- Weekly Standard, Z Street's Legal Battle Continues Against the IRS
- Z Street's Complaint (Oct. 24, 2010)
- Government's Motion to Dismiss (Nov. 1, 2010)
- Z Street's Memorandum in Opposition to Government's Motion to Dismiss (Nov. 22, 2010)
Update: Politico, IRS to Jewish Group: 'Does Your Organization Support the Existence of the Land of Israel?', by Ben Smith:
A conservative Pennsylvania Jewish group that has claimed the IRS is targeting pro-Israel groups introduced in federal court today a letter from an IRS agent to another, unnamed organization that tax experts said was likely outside the usual or appropriate scope of an IRS inquiry.
"Does your organization support the existence of the land of Israel?" IRS agent Tracy Dornette wrote the organization, according to this week's court filing, as part of its consideration of the organizations application for tax exempt status. "Describe your organization's religious belief sytem toward the land of Israel." ...
Several experts on non-profit tax law said the questions to the organization were unusual, at best, though they were also skeptical of the claim that the IRS is specifically targeting pro-Israel groups.
"The claims go far beyond what should be the IRS's role," said Paul Caron a University of Cincinnati law professor and the author of TaxProf Blog.
Ellen Aprill, a law professor at Loyola University in Los Angeles said the second question was "appropriate" in the context of an application seeking a tax exemption on religious grounds. "The first one is not the way I would want any of my agents to do it," she said.
Former I.R.S. Commissioner Sheldon Cohen said he was skeptical of Z Street's motives in its high-profile lawsuit, rather than pursuing its concerns in tax court. "They were hardly into the process when they screamed rape – nobody lifted the dress yet," he said, noting that 501(c)3 groups can't advocate for political positions. But he called the specific questions "unusual." "I've never seen that kind of inquiry," he said.