US Tax Authority Discriminated Against Pro-Israel Groups

The IRS has come under investigation for placing inappropriate scrutiny on pro-Israel organizations that support Jewish communities in Judea and Samaria before granting them tax exemption status.

According to an IRS report that was issued upon the request of the Treasury Department, “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…” Bloomberg News reported that IRS documents revealed that ‘other organizations’ included organizations connected to Israel.

This report follows the testimony of a Cincinnati-based IRS agent, Gary Muthert, who claimed that applications from pro-Israel groups for tax exempt status within the US were routed to an anti-terrorism unit within the IRS for additional screening procedures.

Z Street a non-profit that engages in Israel education, was one of the organizations whose application was unduly delayed. In 2010, Z Street filed a lawsuit against the IRS because they received additional scrutiny due to their connection to Israel. During that period of time, Z Street was told the applications of some Israel related organizations have been assigned to “a special unit in the D.C. office to determine whether the organization’s activities contradict the Administration’s public policies.” It was only revealed later that Z Street was being pursued over an alleged connection to terrorism.

According to Dan Epstein, executive director of Cause of Action, a non-profit governmental accountability organization, “The idea that supporting Israel is equitable to supporting terrorism is not only racist, it’s false. The State Department has designated only four countries to be ‘State Sponsors of Terrorism’ – Cuba, Iran, Sudan, and Syria — and in its most recent report on Mideast terrorism, Israel was identified by the State Department as ‘a resolute counter-terrorism partner in 2011.’ Far from being a country whose support constitutes a higher risk of terrorism, the State Department holds the opposite: ‘Israel faced terrorist threats from Hamas, the Popular Resistance Committees, and Palestinian Islamic Jihad (PIJ), particularly from Gaza but also from the West Bank, and from Hezbollah in Lebanon.’ No citizens of Israel are listed on the FBI’s terrorism watch list, but the majority of those who are listed share one thing in common: being anti-Israel.”

He argues that there were never any grounds for the IRS treating pro-Israel organizations in this manner. To this day Z-Street has still not received their tax-exempt status.

By Rachel Avraham, staff writer for United with Israel

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