Federal judge gives green light to Z Street case against IRS

Tax authority says it held up group’s exemption because it supports a country with ‘higher risk of terrorism’ — Israel

The Internal Revenue Service building in Washington DC (photo credit: CC BY-SA Joshua Doubek, Wikimedia Commons)
The Internal Revenue Service building in Washington DC (photo credit: CC BY-SA Joshua Doubek, Wikimedia Commons)

WASHINGTON — A federal judge ruled that a pro-Israel group’s lawsuit may go forward against the IRS for allegedly denying the group tax-exempt status because its positions opposed those of the Obama administration.

Judge Ketanji Brown Jackson of the US District Court in Washington, DC, on May 27 dismissed US government claims that the lawsuit filed in 2010 by Z Street was not appropriate to the federal courts.

Among other arguments, the federal government cited a law that bans the abuse of courts to avoid tax collection.

Jackson accepted Z Street’s argument that the group was not suing to avoid taxes but because it alleged the government was subjecting it to “viewpoint discrimination,” which would be unconstitutional under speech freedom protections.

Z Street, founded in 2009 in part to counter the influence of J Street, a liberal group, has claimed that IRS officials delayed approving its status because its views on the Israeli-Palestinian conflict contradict those of the Obama administration.

IRS officials in affidavits have denied the claim, saying instead approval was delayed because of a policy of subjecting to stricter review organizations that provide resources to countries that have a “higher risk of terrorism.” Israel is designated as such a country.

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