Court Ruling: Z-Street Lawsuit Alleging IRS Discrimination Moves Forward

green light photoThe Z-Street organization has been given the green light to go after the IRS.

Z-Street, a Philadelphia area-based pro-Israel organization, filed a lawsuit  saying its constitutional rights were violated by an IRS policy that delayed tax-exempt status because of its role in educating the public about Israel and the Middle East conflict.   The group’s founder Lori Lowenthal Marcus wrote in the Jewish Press what followed:

On July 19, 2010, when counsel for Z STREET spoke with the IRS agent to whom the organization’s application had been assigned, that agent said that a determination on Z STREET’s application may be further delayed because the IRS gave “special scrutiny” to organizations connected to Israel and especially to those whose views “contradict those of the administration’s.”

The IRS has been trying to quash the lawsuit by claiming the court does not have jurisdiction over the matter. This week Federal Judge Ketanje Brown Jackson ruled rejecting the IRS case and ordering the IRS to respond to Z Street’s complaint within the next 30 days.

How Will This Ruling Affect Other Groups?
Wall Street Journal editorial page noted:

This ruling will force the IRS to open its books on the procedures it used and decisions it made reviewing Z Street’s tax-exempt application, procedures it has tried to keep shrouded. As the case proceeds, Z Street’s attorneys can seek depositions from many who have been part of the larger attempt to sit on similar applications by other conservative groups.

“In other words, this case may be the straw that breaks the camel’s back of the IRS’s politically prejudicial policies. If an IRS agent can reject or stall a pro-Israel group’s application on the grounds that “these cases are being sent to a special unit in the D.C. office to determine whether the organization’s activities contradict the Administration’s public policies,” then no group, no matter what its political orientation or cause is safe from being subjected to a political litmus test designed by any administration of either political party.”

Online:  Phony Scandal? Courts Open Window on the IRS’s Political Litmus Tests

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