Published On: Sun, Jun 21st, 2015

Z Street Beats The IRS

Its lawsuit for bias can now go forward.

Pro Israel Lobbying group Z Street has won an important court case against the IRS which has been trying to deny it tax exempt status. After five years before the courts, the D.C. Circuit Court of Appeals on Friday agreed with and affirmed the D.C. District Court’s previous ruling that Z Street could sue the IRS for denying it tax exempt status.

The Internal Revenue Service had held that the lobbying group was a political organization and, therefore, did deserve tax exempt status. The group countered that it’s First Amendment rights were violated by the IRS. There is no word yet if the IRS intends to appeal the decision.

Interestingly, Z Street does not seem to be a very serious organization. It website consists of one line directin people to e mail its founder and nothing more.

Lori Lowenthal Marcus, head of Z Street, wrote:

Z STREET looks forward to the discovery phase of litigation in which it will seek to learn the nature and origin of the “Israel Special Policy” which the IRS applied to Z STREET’s tax exemption application. Z STREET will seek to learn how such a policy was created, who created it, who approved it, to whom it was applied, as well as all other information regarding this policy.

A series of IRS documents called “Be On the LookOut” lists, which were released by Congress in June, 2013, pursuant to the TIGTA investigation, have already established that, as Z STREET alleges, while Z STREET’s application for tax exempt status was pending, the IRS did indeed create a special category of review for organizations seeking such status, if they were engaged in what the IRS called “occupied territory advocacy.”

Z STREET looks forward to using the discovery process to learn more about the precise nature, origin and effect of this policy, which the DC Circuit has now made clear is a violation of essential Constitutional rights.

The “precise nature and origin” of the IRS’s discriminatory treatment is where the political dynamite lies. Will we see any more IRS officials taking the Fifth Amendment?

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