Living on Z (Zionist) Street: The IRS Takes a Hard Look at Religious and Political Beliefs

I first saw this story on Politico, but when Rubin on Tax took it up I knew it was serious:

According to pleadings filed in a civil action, Z Street is a nonprofit organization which educates the public about Zionism, and about the State of Israel and its battle with terror.  As a nonprofit educational organization, Z STREET has applied for certification that donations made to it are charitable, and therefore exempt from federal income tax, under Code §501(c)(3).

Z Street is contending that the IRS is asking improper questions and unduly delaying its exempt organization application. As part of its court filing, Z Street has indicated that an IRS agent has informed it that the IRS is “carefully scrutinizing organizations that are in any way connected with Israel,” and that there are such “cases… being sent to a special unit in the D.C. office to determine whether the organization’s activities contradict the Administration’s public policies.”

If true, such inquiries by the IRS should not be permitted (as not relevant to the “educational” aspects of the organization). Further, it raises that the specter that the IRS may be denying exempt organization status because an organization’s activities are not in accord with the Administration’s policies – an improper, if not unconstitutional, politicization of what should be a policy-neutral exempt organization review.

So what happens when we change administrations, and get a new policy towards Israel?  Or is this administration planning to stick around longer than anticipated?  We all know that any non-profit organisation has one or more positions as part of its raison d’être, and we also know that our government is so all-encompassing that, somewhere along the line, one or more of these positions will contradict public policy.  That is, if the government has a clear understanding of what that public policy is…

I’d like to remind my Christian readers of this, from the Politico piece:

The IRS can deny tax exempt status to groups that work against “established public policy,” a precedent established in its denial of a tax exemption to Bob Jones University over racial discrimination, and Z Street is suggesting that the IRS has begun applying some such policy to pro-Israel groups. The State Department has complained of tax exempt contributions to groups that fund weapons and equipment for West Bank settlers, which Z Street co-founder Lori Lowenthal Marcus said Z Street has never come close to doing.

It’s not much of a stretch to see churches and other non-profit, tax-exempt organisations lose same tax-exempt status because what they advocate as part of their mission is against current public policy, such as being pro-life, opposing same-sex civil marriage (or civil marriage period), or any other myriads of causes.  It’s mostly a matter of  having a government with the will to oppose tax-exempt status for organisations such as Z Street which aren’t to its taste, and a judiciary which is in agreement with its idea.

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