Paul L. Caron

Saturday, March 19, 2011

The Tax-Exempt Status of Charities that Support Israeli Settlements

Margaret A. Weirich (J.D. 2010, Iowa) has published Hijacking the Charitable System: An Examination of Tax-Exempt Status for Charities that Support Israeli Settlements, 14 J. Gender Race & Just. 327 (2010). Here is part of the Introduction:

This Note will argue that domestic policy, coupled with strong international law principles, justifies the revocation of tax-exempt status from charities that are supporting settlements. The purpose of tax-exempt status is to encourage individuals and groups to provide aid for educational, charitable, and other purposes that help to alleviate the government's burden. Furthermore, this Note will argue that supporting activities that violate international law and widely recognized public policy does not fall under the intentions of the U.S. Tax Code. Charities that promote activities that are illegal under international customary law, U.S. ratified treaties, and public policy should not be rewarded by the U.S. government with tax-exempt status.

The Background section will briefly focus on the history of the Arab-Israeli conflict and the settlement issue. The Background section will also feature a summary of many of the aspects of international and U.S. domestic law that will be considered in this Note. The Analysis section will focus first on the legal issues surrounding settlements, then the connection between U.S. charities and settlements, and lastly the issue of tax-exempt status for charities that donate to settlements under the U.S. Tax Code. Finally, the Conclusion will summarize the findings of the Analysis section.

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We have a similar problem in the United Kingdom whereby many millions of pounds annually are sent either direct to Israel or via their US agents, by British registered charities, ostensibly for educational purposes, with any tax being refunded to the donors, - i.e. tax free.

These massive tax free funds are then used for purposes over which the UK government has no knowledge or control. AS far as I am aware, no one has any idea on how these huge tax free monies are utilized. It is a complete scandal in which British tax payers may well be subsidizing illegal settlements or other illegitimate activity in violation of international law.

Posted by: COLINDALE London | Mar 20, 2011 4:47:55 AM

I would say that the British taxpayers have a far greater problem on their hands than the relatively insiginifcant tax breakage via charitable payments made to the organizations in the one democracy that exists in the Middle-East. The writer should focus on the huge sums spent by the gov't on subsidizing the Arab immirgrants to Britain, the extra cost of security that have been imposed due to the radical Islam terror networks operating in Britain, the threats to worldwide humananity from those same circles and the complete lack of ethical judgement on the part of the British gov't with respect to Middle East politics and their sell-out of the country to forces of Islam.

Posted by: len | Mar 21, 2011 8:28:31 AM

As my original comment has not been posted, I take it that it is offensive in some way. I find this article offense, and that's why I left a comment. Rather than reiterate ideas that will not be posted, I will try to limit my comments to those that are "postable."

1. ARMDI (Red Magen David). Are deductions to the Israeli version of the Red Cross deductible or not given that they treat Israelis injured inside or outside the Green line?

2. Why Israel and no discussion of charities that support Hamas, Hezbollah, and other terrorist organizations?

3. Why not discuss disallowing charitable deductions to organizations that support the destruction of a legitimate State recognized by the U.N.?

4. Why is Israel singled out? Why aren't charities that support the actions of governments known to be in violation of international law included?

As I previously wrote, there is a difference between building condos and buying weapons to blow up those condos.

Posted by: tax guy | Mar 21, 2011 9:25:26 AM