ISRAEL MATZAV: IRS First Post-Scandal Appearance in Court Reveals Effort to Run From Justice

The IRS has learned nothing from all its travails in Congress. It continues to behave as Obama's Gestapo.

As you might recall, Z Street is a Jewish organization that was set up in part to counter the pro-'Palestinian' J Street. Z Street sought exempt organization status as a 501(c)(3) corporation, but has not yet been able to get it because it is pro-Israel (or possibly because it disagrees with the Obama administration's position on Judea and Samaria). In other words, Z Street is the foreign policy alter-ego of the Tea Party organizations that have grabbed most of the headlines in the IRS scandal.

In 2010, Z Street sued the IRS. On Tuesday, the IRS sought (again) to dismiss that lawsuit. This press release was put out by Lori Lowenthal Marcus, the President of Z Street, in response. 

FOR IMMEDIATE RELEASE WED., JUNE 26, 2013
CONTACT: Lori Lowenthal Marcus, 610.664.1184 lorilowenthalmarcus@gmail.com    

IRS First Post-Scandal Appearance in Court Reveals Effort to Run From Justice

Yesterday marked a new entry in an ongoing pattern of changing stories and defenses to prevent the light of day from exposing egregiously unconstitutional behavior by one of the most dreaded limbs of government: the Internal Revenue Service. 

“It is no surprise that the IRS is desperately fighting to prevent anyone from learning exactly how the IRS decided to categorize organizations on the basis of their political, religious or other viewpoints, an issue from which the government entity has been reeling for weeks, and with good reason,” said Lori Lowenthal Marcus, president of Z STREET.

Represented by the Justice Department, the IRS filed a brief seeking to dismiss the lawsuit against it brought by Z STREET, a staunchly pro-Israel organization, which was filed in August, 2010.

That lawsuit was the first public utterance that the IRS was discriminating against certain organizations because of their viewpoints, rather than because of a failure to follow the required guidelines of eligibility. 

In May, the admission - after years of denials - by the IRS itself that it had engaged in categorizing politically conservative groups for differing treatment touched off a flurry of congressional and media attention.  Most of the attention was focused on the treatment of “Tea Party” and other politically or socially conservative groups.

Z STREET brought its lawsuit nearly three years ago, after being told by the IRS agent to whom its file had been assigned that the IRS had to “give special scrutiny to organizations connected to Israel,” and that the files of some of those “organizations were sent to a special unit in Washington, D.C. to determine whether the activities of the organization contradicted the public policies of the administration.”  Such treatment by the IRS constitutes bald-faced viewpoint discrimination and is a violation of the U.S. Constitution.

The IRS has defended itself in the lawsuit on several different grounds, including the absurd notion that the government is immune from such a lawsuit. (In fact, of course the Bill of Rights -- which begins with the First Amendment, securing the right to free speech -- was created specifically to protect citizens from unconstitutional behavior by the government).

In particular, the government has repeatedly denounced Z STREET for failing to wait the requisite number of days before complaining and going to court for not receiving tax exempt status.  And as Z STREET explained in every single one of its own court filings, the lawsuit was not brought because it had not been given (or denied) tax exempt status within a particular time frame.  The lawsuit was brought because Z STREET believes, based upon what the IRS agent herself said, that the IRS engaged in unconstitutional viewpoint behavior.  There is no requirement to wait a set period of time before making such a claim.

However, in yesterday’s filing, the IRS claimed - for the first time, not surprisingly, as it completely contradicts every other court filing by the IRS in this case - that Z STREET’s lawsuit should be dismissed because it failed to make out the very claim the IRS had repeatedly insisted Z STREET was making - that it qualifies for, and should have already been given, tax exempt status.

It bears noting that yesterday another set of significant documents was released by the IRS, via the House Ways and Means Committee.  These, in an apparent attempt to prove that the IRS was not just engaging in viewpoint discrimination against politically conservative groups, showed that the IRS had created a category for review it labeled “progressive,” as if that made everything kosher.  But also included in the documents released was a category labeled “occupied territory advocacy.”  In other words, the IRS was indeed singling out applications for tax exempt status on the basis of a particular political viewpoint which is inconsistent with this administration’s.  And that is bald-faced viewpoint discrimination and is the basis for Z STREET’s lawsuit against the IRS.

The first hearing in Z STREET’s lawsuit against the IRS will be held on July 19 at 10:00 in Courtroom 17 before Judge Ketanji Brown Jackson, in the Federal District Court of the District of Columbia.

And you thought the IRS acted unfairly to the Tea Party....

JEWISH PRESS: IRS: We Targeted Supporters of Israel’s Disputed Territories; On Monday the IRS provided the 'smoking gun' pointed at its own head, in reports and information showing that the government agency made decisions based upon the views of pro-Israel groups which disagreed with the administration about the 'Disputed Territories.' By: Lori Lowenthal Marcus

IRS documents revealed the Service had been targeting pro-Israel groups whose view on the territories differed from the administration's.

Ever since the beginning of the scandal concerning the United States Internal Revenue Service and the claims that it had a policy of treating differently – as in worse – organizations seeking tax exemptions if those organizations held positions in conflict with this US administration, there have been doubters.

And, of course, the way the story has been spun fans the flames of doubt – yes, the IRS finally admitted, after years of denial, that it had targeted certain groups and subject some groups to extra scrutiny, but there was no political impetus for the inappropriate action, there was just poor oversight of overworked civil service employees who were just trying to streamline their jobs.  Heck, the claim went, that was wrong, but what we now recognize as inappropriate actions weren’t taken for political purposes. That was the claim.

And the IRS is trying desperately to make glib admissions, have some heads roll, even parade some of those heads around to show how seriously the IRS takes its need to be punished.  But now, it’s time to move on.  The IRS is even providing a kind of amnesty for many of the politically conservative groups that complained – they are getting hand-delivered approval letters, and future applicants will be assured of an easier time going forward.

So, maybe it’s time to move on.

Well, one little organization (the one this reporter founded and of which she is the president) refuses to go flying no matter how hard the IRS is shaking its leg to free itself.

Z STREET claimed when it filed its lawsuit for viewpoint discrimination against the IRS in August, 2010, that the IRS treated Z STREET differently subjecting it to additional scrutiny, because of its ideological views.

Two things happened on Monday, June 24, that proved, finally, that Z STREET – and others similarly situated – was correct.

First, the IRS released its 83 page document, “Charting a Path Forward at the IRS,” in response to the Treasury Department’s Inspector General who found that the IRS had engaged in inappropriate targeting of certain groups which had sought tax exempt status from the IRS.

The IRS Path Report begins:

The IRS used inappropriate criteria that identified for review Tea Party and other organizations applying for tax-exempt status based upon their names or policy positions instead of indications of potential political campaign intervention.

Well, there you have it.  The IRS admitted that it made decisions based on policy positions, rather than on prohibited activity.  That is exactly what Z STREET claimed – that it had been discriminated against because it holds positions that “contradict the Administration’s public policies.”

The second revelation was one made by Bloomberg News.  That media agency obtained IRS documents revealing that, in addition to the terms Tea Party and 9/12, other terms were used in flagging organizations seeking tax exempt status for additional scrutiny.  While the headline of the article, and what was the object of most media attention, was that terms that suggested not just conservative groups, but also liberal or progressive groups were given the IRS evil eye – words such as “occupy” and “progressive” were allegedly triggers, as was the word “Israel.”

But far down in a long article the Bloomberg reporter explains that, “Disputed Territories” was considered problematic.  To wit:

‘Disputed Territories”

The November, 2010 [BOLO - Be On the Look Out] list also has terms that could be related to Israel, looking for applications that ‘deal with disputed territories in the Middle East’ and ‘may be inflammatory.’

Well, golly!  What kind of a group calls a particular area of land “disputed territories,” which the vast majority of people, either for ideological or simply conformity refer to as the “West Bank?”  Yes, that would be strong Zionist groups such as Z STREET.

That the IRS chose to handle Z STREET’s application in a particular way on the basis of our organization’s position on this issue, and the fact that someone within the IRS even took the time to think such a position might ‘be inflammatory,’ is about as close as can be to a smoking gun revealing the IRS engaged in naked viewpoint discrimination.

That foul activity cannot be waved away.  Its stench is one that will only dissipate after there is a thorough investigation into how the  decision was made to use this particular criterion for evaluating an application.  Who approved that decision?  How many people knew about it?  How many organizations were subjected to it?

And now there are other delicate issues which demand attention.  If this was the basis for a decision, why were three IRS agents allowed – or were they forced? – to suggest under oath that there was another basis for delaying Z STREET’s application? First there was the claim that perhaps Z STREET was really an “action” organization whose mission could only be accomplished by legislation.  Then there was the claim that Israel is a country where there is a “heightened risk of terrorism,” and of course Z STREET required special scrutiny because it might be providing funds to terrorist groups.  Except, of course, Z STREET doesn’t fund anything, and then there is the little matter of Israel being the object of terrorism, not the source of terrorism.

And, further, on the subject of Israel and terrorism – how is it that the IRS felt comfortable making the argument, presenting as a legitimate basis for giving special scrutiny to pro-Israel organizations the likely possibility that it meant those groups might engage in supporting terrorism, is an additional cause for alarm.  Where was the so-called “Israel lobby” and why weren’t its members screaming at the top of their lungs that such an explanation was being offered?

The IRS scandal certainly isn’t over.  But with respect to the portion that has to do with the Service’s treatment of pro-Israel organizations, it looks like the IRS no longer has much basis for denying it engaged in viewpoint discrimination.  Now the question becomes how to make sure the prior wrong behavior is ferreted out, the wrongdoers are punished, and mechanisms are put in place that ensure such wrongdoing does not continue.