It’s Not Kosher: The IRS and Z Street

The recent Z Street Case against the IRS before the D.C. Court of Appeals is a notable example of egregious behavior by IRS employees.

Z Street is a group that was created in order to educate “the public about Zionism; about the facts relating to the Middle East and to the existence of Israel as a Jewish State; and about Israel’s right to refuse to negotiate with, make concessions to, or appease terrorists.”

In December 2009, the group submitted an application to the IRS in order to gain 501(c)(3) status. By July 2010, Z Street spoke to the IRS about the unusually lengthy process; the “IRS agent said that auditors had been instructed to give special attention to groups connected with Israel, and that they had sent some of those applications to a special IRS unit for additional review.”

The interesting thing about this case is that it hearkens back to the early years of the Obama Administration beginning in 2009. That’s more than three years before the IRS scandal blew wide open in 2013, which goes to show you just how deeply entrenched the culture was at the IRS — it seems no one considered actions against certain groups (but not others) to be discriminatory or punitive. Why did the IRS not recognize their own audacity?

Incidentally, according to documents, IRS inspectors were instructed to “be on the look out” (BOLO) for groups that would fit the description of “occupied territory advocacy”; that instruction was sent on August 6, 2010, merely a few days after the Z Street application file was examined. After the IRS scandal broke, and during subsequent investigations, it was revealed that the file containing “occupied territory advocacy” groups listed exactly one such group: Z Street.

The IRS manager involved with the Z Street case stated under oath by documents submitted during the initial court proceedings in 2013 that he concluded Z Street might be involved with terrorism funding because “there is a higher risk of terrorism in Israel.”

The Circuit Court was patently outraged at the IRS’s illegal actions on the matter, and further chastised the IRS and the DoJ for ridiculously implying that there can be a holding period of up to 270 days before a decision is made for a 501(c)(3) application. One judge remarked, “If I were you, I would go back and ask your superiors whether they want us to represent that the government’s position in this case is that the government is free to unconstitutionally discriminate against its citizens for 270 days.”

Why are heads still not rolling at the IRS? Why is the IRS defending this behavior? The tactic to appeal last year’s halted discovery that would potentially embarrass the IRS. This “would have allowed Z Street to examine IRS officials, under oath, and to receive internal communications from the agency regarding the special unit and special procedures for handling pro-Israel groups.”

In other words, the IRS and the government are more worried about protecting themselves than fixing the problems, thus continuing to clog up the court system until the waning days of the Obama Administration. This maneuver shows that corruption is evidently still alive and well at the IRS.

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