The news that the Internal Revenue Service (IRS) unfairly targeted conservative groups has brought a new spotlight on a 2012 lawsuit filed by the pro-Israel group Z Street. According to Z Street Director Lori Lowenthal Marcus, the IRS singled out the organization and failed to move forward its request for 501 (c)(3) tax-exempt status because Z Street “is an organization that disagrees with the president’s policy.”
Z Street filed a lawsuit against the IRS in 2010. The suit was filed in federal court in Pennsylvania and later transferred to D.C. A judge in Washington will hear the case July 2. Most of the Tea Party groups known to have come under scrutiny applied for 501 (c)(4) status, which allows advocacy groups to avoid federal taxes on their operations budget but doesn’t render donations to the group tax deductible. Both kinds of applications are processed in the same Cincinnati office.
According to the Forward, a second Jewish group, Ameinu, a self-described progressive Zionist group, also reported that the group was red-flagged because of its connection to the Jewish state.
The Z Street case has raised some — but not many — eyebrows in the Jewish community.
Dr. Arthur C. Abramson, executive director of the Baltimore Jewish Council, said he is not alarmed. He said, “I had never heard of them. … I can’t say this was unwanted attention.”
But Lowenthal, whose group still has not obtained its nonprofit stature, is not willing to take this battle sitting down. She expressed “disappointment” at the Jewish community’s response.
“As a general matter, the Jewish community is up in arms about discrimination against other groups,” she said. “The public response for us from the organized Jewish community has been disinterest. When it has not been disinterest, it has been vicious.”
According to Lowenthal, Z Street is a “purely educational” group that works to disseminate information about Israel that one might not see in the headlines of major newspapers. From her vantage point, Z Street was red-flagged not because it does anything wrong, but on the basis of its viewpoint that “I support Jews living and breathing in Shiloh” and other neighborhoods located in Judea and Samaria.
She said the IRS rebuttal to this claim is that any organization that does business in the Middle East (inc-luding in Israel) must be red-flagged because there is a heightened risk of terrorism.
At that, Lowenthal chuckles.
“Israel is not the source of the terrorism,” she said. “Israel is the victim of terrorism. There are not Israeli terrorist groups raising money in the U.S.”
Moreover, noted Lowenthal, Z Street does not provide grants to anyone, including to Jews living in Israel.
But Abramson said he does not see an issue with red-flagging organizations with ties to Israel. He said, “Obviously, the majority of the terrorists are coming from the Arab community, but there are Jewish terrorists.”
Abramson recalled that even over a decade ago when BJC applied for 501 (c)(3) status for the Congressman Elijah Cummings Youth Program in Israel (ECYP), BJC went through what seemed an arduous process. He said tying the name of a congressman with a nonprofit raised a red flag, as did the fact that the organization contained Israel in its name.
“They questioned it. I don’t see anything of note,” Abramson said.
And he also noted that he supports the government’s right to decide if nonprofit funds should be used to support programs over the green line.
Douglas Bloomfield, a syndicated columnist, Washington lobbyist and consultant, said he is less worried about the fact that an organization tied to Israel was red-flagged than he is that there is such uproar that the community thinks it wrong for the IRS to do its job.
“This is not a partisan issue,” he told the JT in relation to the alleged singling out of Tea Party programs, noting that it is not an issue of perspective on Israel or anything else either.
Lowenthal said she thinks knowledge that the IRS may scrutinize one organization over another will lead the community not to trust the IRS. She said, “People [and organizations] will just sanitize their language” to get the status they want. “I know of groups that were having difficulty getting IRS approval, so they changed their names and got what they wanted.”
Bloomfield said he thinks Congress should put an end to that, too if it is happening, and he is not confident that it is. Congress, he said, has a responsibility to make sure the IRS is properly funded to provide strong oversight to all who apply for 501 (c)(3) and (c)(4) statuses and to offer continual oversight to make sure those organizations are not abusing their power. He said the IRS “should do a full, fair and good job” of vetting each applicant to make sure it is qualified; everyone has to meet the same standards.
“Let the sunshine in,” he said. “Sunshine has the greatest healing/curative power. We need to know who, how much, for what.”