Z ST V IRS, an interview with Lori Lowenthal Marcus by Jerry Gordon (August 2013)
Z STREET vs. The IRS
an interview with Lori Lowenthal Marcus by Jerry Gordon (August 2013)
The American public was aroused by allegations and documentation of political discrimination by The Internal Revenue Service (IRS) released in hearings before the House Oversight and Government Reform Committee in May and later hearings before the House Ways and Means Committee in June and July 2013. The hearings were triggered by a report released on May 14, 2013 from The Treasury Inspector General for Tax Administration, “Inappropriate Criteria Were Used to Identify Tax-Exempt Applications for Review.” The report revealed a broad pattern of discrimination against several hundred conservative groups who had filed for tax exempt status under Section 501 (c) (4) of the Internal Revenue Code. President Obama was appalled, Congressional committees were angered and soon a parade of witnesses including retired and former IRS Commissioners appeared. One senior IRS official, Lois Lerner, look the Fifth Amendment in her appearance. A House Oversight and Government Reform Committee Hearing on July 18, 2013 had appearances by both current Cincinnati and recently retired Washington, DC senior tax personnel that appeared to tie the disputed special reviews to a political appointee, IRS General Counsel, William Wilkins.
This is particularly acute for Z STREET, because the active discrimination in processing its application well over three years ago led to a filing of a cause of action against a former Commissioner of the IRS, Douglas Shulman in August 2010. The filing accused the federal tax agency of viewpoint discrimination in violation of the First Amendment. That preceded disclosures in May 2013 about similar activities by the IRS against conservative political groups with titles like, “Tea Party,” “Patriots” and others.
Z STREET, the pro-Israel Zionist group, went to Federal court in Washington, DC on Friday, July 19, 2013 in the matter of Z Street v Douglas Shulman, former IRS commissioner. A hearing was held before Judge Ketanji Brown Jackson in the DC Federal District Court. The hearing came nearly three years after Z STREET filed its original complaint in the Eastern District Court in Pennsylvania. After two years, the judge in the Philadelphia Federal court ordered the transfer of jurisdiction as most cases involving the IRS were heard in the DC Federal court and in her Order noted that she “agrees with the Plaintiff that this case is about a Constitutional Process.” The Z STREET case against the IRS has received national attention following disclosures by the House Ways and Means Committee effectively revealing evidence of viewpoint discrimination by the IRS against Z STREET in contradiction to IRS representations in their filed Motion for Dismissal.
A news release by Z STREET, issued just prior to the DC court proceeding cited the June 24, 2013 House Ways and Means release of acting IRS Commissioner Danny Werfel’s responses to a letter from Ranking Member, Sander Levin (D-MI). Z STREET’s supplementary filing revealed that there were no "progressive" groups scrutinized by the IRS "Touch and Go" Group (TAG) in Washington, DC. Instead due diligence of the IRS documents revealed that Z STREET was the sole subject by the TAG review because of “Israel-connected” views of the group in its original 501 (c ) (3) application.
Alana Goodman of The Washington Free Beacon who attended the DC Federal Court hearing noted in her report the IRS argument and the reaction of Judge Brown:
The government argued in court on Friday that Z STREET should resolve its tax-exempt status, which is still in limbo, before any policy questions can be addressed.
Judge Ketanji Brown Jackson seemed skeptical of the argument, saying that the government appeared to be mischaracterizing the remedy that Z Street was seeking.
“That’s not what they want,” Judge Jackson snapped at one point.
Z STREET said the government was misrepresenting its position.
“We’re not seeking tax-exempt status in this case. We are seeking an untainted process,” said counsel Jerome Marcus. “What is the policy that the IRS has been following since 2010, and is that process constitutional?”
Is the Z Street case against the IRS evidence of bureaucratic ineptitude or something else? If discovery is granted by the DC Court ruling we may find who and why a unconstitutional act of viewpoint discrimination was perpetrated against Z STREET.
Against this background, we interviewed Lori Lowenthal Marcus. Ms. Marcus is co-founder of Z STREET. She calls herself a recovered First Amendment Lawyer. She is also the U.S. correspondent for The Jewish Press.
Jerry Gordon: Lori, thank you for consenting to this interview.
Lori Lowenthal Marcus: Thank you for inviting me.
Gordon: When was Z STREET organized?
Marcus: A group of us began talking about possibly forming a sincerely pro-Israel organization in 2008. There had been a proliferation of groups calling themselves pro-Israel that many of us felt were not helpful at all. That is, they were simply more of the same, more middle of the road and then, increasingly, more flatly - as we saw it - anti-Israel groups dressed up in “pro-Israel” clothing. This was happening while the number of organizations at the other end of the spectrum, the more ardently pro-Israel groups had remained stagnant for years. That is why we began to consider starting a new organization, Z STREET.
Gordon: What are the group’s objectives and mission?
Marcus: We decided to form Z STREET because the final straw was the creation of a group called J Street. Many people thought the “J” stood for Jewish. It doesn’t. They claim to be the voice that isn’t heard, like the street in Washington D.C., “J Street,” which doesn’t exist. That voice is practically the only one that is heard in the discussions about Israel. So that pushed us over the edge.
We chose our name, as a play on J Street, but with a twist. The name Z STREET was chosen, and Z stands for Zionists: we are proud of it. It's a word that should be said out loud. It's not a dirty word. We are pro-Israel. We believe in Israel as a Jewish state, and we wanted to say that this group of Zionists is not afraid to say out loud that we think it is a big mistake that Israel should not be forced into, making concessions to, appeasing or negotiating with terrorists. The goal of the peace process should be peace, rather than what it has metamorphosed into which is the creation of a Palestinian State. That is what J Street pushes for, relentlessly. That is what so many “pro-Israel,” and “pro-peace” groups push. While the truth is rather than bringing us closer to peace, it will bring us even more violence and destabilization in the Middle East.
Gordon: When did Z STREET choose to file for a tax exempt status under Section 501(c)(3) of the Internal Revenue Code?
CONTINUE READING THIS INTERVIEW AT THE NEW ENGLISH REVIEW, HERE
IRS Inverts Its Main Claim Against Z ST on Eve of Hearing
Last Updated on Wednesday, 26 June 2013 19:29
June 26, 2013
IRS First Post-Scandal Appearance in Court Reveals Effort to Run From Justice
Yesterday marked a new entry in an ongoing pattern of changing stories and defenses to prevent the light of day from exposing egregiously unconstitutional behavior by one of the most dreaded limbs of government: the Internal Revenue Service.
“It is no surprise that the IRS is desperately fighting to prevent anyone from learning exactly how the IRS decided to categorize organizations on the basis of their political, religious or other viewpoints, an issue from which the government entity has been reeling for weeks, and with good reason,” said Lori Lowenthal Marcus, president of Z STREET.
Represented by the Justice Department, the IRS filed a brief seeking to dismiss the lawsuit against it brought by Z STREET, a staunchly pro-Israel organization, which was filed in August, 2010.
That lawsuit was the first public utterance that the IRS was discriminating against certain organizations because of their viewpoints, rather than because of a failure to follow the required guidelines of eligibility.
In May, the admission - after years of denials - by the IRS itself that it had engaged in categorizing politically conservative groups for differing treatment touched off a flurry of congressional and media attention. Most of the attention was focused on the treatment of “Tea Party” and other politically or socially conservative groups.
Z STREET brought its lawsuit nearly three years ago, after being told by the IRS agent to whom its file had been assigned that the IRS had to “give special scrutiny to organizations connected to Israel,” and that the files of some of those “organizations were sent to a special unit in Washington, D.C. to determine whether the activities of the organization contradicted the public policies of the administration.” Such treatment by the IRS constitutes bald-faced viewpoint discrimination and is a violation of the U.S. Constitution.
The IRS has defended itself in the lawsuit on several different grounds, including the absurd notion that the government is immune from such a lawsuit. (In fact, of course the Bill of Rights -- which begins with the First Amendment, securing the right to free speech -- was created specifically to protect citizens from unconstitutional behavior by the government).
In particular, the government has repeatedly denounced Z STREET for failing to wait the requisite number of days before complaining and going to court for not receiving tax exempt status. And as Z STREET explained in every single one of its own court filings, the lawsuit was not brought because it had not been given (or denied) tax exempt status within a particular time frame. The lawsuit was brought because Z STREET believes, based upon what the IRS agent herself said, that the IRS engaged in unconstitutional viewpoint behavior. There is no requirement to wait a set period of time before making such a claim.
However, in yesterday’s filing, the IRS claimed - for the first time, not surprisingly, as it completely contradicts every other court filing by the IRS in this case - that Z STREET’s lawsuit should be dismissed because it failed to make out the very claim the IRS had repeatedly insisted Z STREET was making - that it qualifies for, and should have already been given, tax exempt status.
It bears noting that yesterday another set of significant documents was released by the IRS, via
the House Ways and Means Committee. These, in an apparent attempt to prove that the IRS was not just engaging in viewpoint discrimination against politically conservative groups, showed that the IRS had created a category for review it labeled “progressive,” as if that made everything kosher. But also included in the documents released was a category labeled “occupied territory advocacy.” In other words, the IRS was indeed singling out applications for tax exempt status on the basis of a particular political viewpoint which is inconsistent with this administration’s. And that is bald-faced viewpoint discrimination and is the basis for Z STREET’s lawsuit against the IRS.
The first hearing in Z STREET’s lawsuit against the IRS will be held on July 19 at 10:00 in Courtroom 17 before Judge Ketanji Brown Jackson, in the Federal District Court of the District of Columbia.
In Court on Friday, IRS statements in Z ST v IRS revealed as FALSE
AS IRS GOES TO COURT FRIDAY, ITS OWN DOCUMENTS REVEAL FALSEHOODS
FOR IMMEDIATE RELEASE JULY 17, 2013
CONTACT: Lori Lowenthal Marcus
IRS documents recently made public by Congress reveal that claims made under oath by IRS employees in the Z STREET case were false and further reveal, in the words of the IRS and in documents produced by the IRS, that Z STREET’s claim against it is correct: the IRS engaged in viewpoint discrimination against Z STREET, a pro-Israel organization, for holding views that contradict those of this administration’s. BACKGROUND
For the last several years Congress has been investigating the Internal Revenue Service for potential mistreatment of politically conservative non-profit organizations.
The revelation by Lois Lerner on May 10, 2013, that the IRS had been doing what the IRS had repeatedly represented to Congress it had not done touched off a firestorm, with many concluding that the Service’s inappropriate activities were politically motivated, and were either directly or indirectly supported or directed by higher ups in this U.S. administration.
In what was clearly an effort to prevent the growing scandal’s political bulls eye being painted on the White House, the ranking Democrat on the House Ways and Means Committee, Sander Levin (D-MI), released a series of documents produced by the Internal Revenue Service. Rep. Levin said he believed these materials proved the IRS had not only targeted conservative groups, but that it had also gone after “progressive” groups, i.e. liberal ones. Presumably, his goal was to prove that the IRS was not selective in its misbehavior, but had been an equal opportunity offender. Levin believed that the 14 IRS documents which he released on June 24, 2013, made this point, and he then went on the offensive, lambasting the Treasury’s Inspector General, for failing to raise this “fact” in his report.
Sympathetic media outlets immediately ran top-of-the fold headlines proclaiming, based upon statements made in a conference call given by Danny Werfel, the new Acting IRS Commissioner, with select members of the media, that the IRS had not only used the words “Tea Party” as a search term to target organizations for additional scrutiny, but that it had also targeted “progressives,” “Israel” and “Occupy.” Outlets which ran with this story, and used the claim in its headlines, included the Associated Press
, Bloomberg News http://www.bloomberg.com/news/2013-06-24/irs-screened-applications-using-progressive-israel-.html
, and the Huffington Post
But a laborious review of the IRS documents released by Levin, as well as a lengthy response by the Inspector General to Levin’s scathing letter, revealed that those documents did not prove what Levin and others hoped was being proved.
In fact, while the term “progressives” was found as a category on several of the documents, just a few minutes’ review revealed that nothing was done with the organizations with that term in their title. In fact, the Tab under which that term appears is “Potential Abusive Historical,” and the category had been moribund. But what was bothering the IRS was that several organizations which had sought one kind of tax exempt status, should probably have been seeking a different one, as the organizations were engaged in political activity, therefore more appropriately a 501(c)(4) and not a 501(c)(3) designation.
But the 14 IRS documents do reveal, and they do it categorically, and they constitute an admission on the part of the IRS, is that the Service was looking at certain “Israel connected” organizations and making a distinction based upon the organization’s political/ideological viewpoint. And that is the very claim made by Z STREET in its lawsuit brought against the IRS in August, 2010, and in which there is a hearing in federal district court in Washington, D.C. this Friday.
On Wednesday, July 17, a document was filed with the D.C. District Court, the Motion of Plaintiff Z STREET to Supplement the Record to Include Documents Recently Released by Defendant Internal Revenue Service. As explained fully therein, but briefly, here:
- The Manager of the IRS Touch and Go (“TAG”) Group stated under oath, after Z STREET brought its lawsuit against the IRS for viewpoint discrimination, that he concluded, based upon Z STREET’s application for tax exempt status and other submissions that Z STREET’s file should be sent to the TAG Group, #7830.
- The TAG Group manager based his decision upon his view that Z STREET might be engaged in the funding of terrorism because “there is a higher risk of terrorism in Israel.”
- Nowhere in any of the 14 documents is any organization’s application referred to any group for anything related to the potential funding of terrorism.
- Nowhere in any of the 14 documents is there even any mention of terrorism.
- The 14 IRS documents released by the House Ways and Means Committee contained a category, created by IRS employees, entitled “Occupied Territory Advocacy.”
- The category for “Occupied Territory Advocacy” had only one organization referred to it, and the notice to IRS inspectors to “Be on the Look Out” for groups under this category was sent on August 10, 2010, just days after Z STREET’s file was reviewed, and a determination was made to send the file to the TAG Group, according to IRS statements.
- The sole entity in the “Occupied Territory Advocacy” category was referred to TAG Group #7830, which is where Z STREET’s file was sent, according to IRS statements.
- The “Occupied Territory Advocacy” category appeared on the August 12, 2010, the November 9, 2010 and the November 16, 2010 IRS documents released on June 24, but it was not present in the next document, dated February 2, 2011, or any of the subsequent 10 IRS documents.
- Z STREET’s application was “put on hold” by the IRS because it brought its lawsuit against the Service, as the IRS explained in a court filing in January, 2011. Once Z STREET’s application was no longer under consideration, the category disappeared.
- The creation of a category for a purely ideological viewpoint is a violation of the IRS mandate, and its use to make decisions about whether to approve or deny tax exempt status on the basis of an applicant’s viewpoint is unconstitutional.
Z ST v. SHULMAN, COMMISSIONER OF THE IRS will be heard in Courtroom 17 before Judge Ketanji Brown Jackson in the federal district court in Washington, D.C. at 10:00 a.m. this Friday, July 19, 2013.
UPDATE: The Washington Post is now reporting that IRS officials and employees have testified that some applications for tax exempt status were sent to the IRS's Chief Counsel - in Washington, D.C. - for review. We note that the IRS agent who was initially responsible for Z STREET's tax exemption application told our ta counsel that some of the files of the "organizations connected to Israel" were sent to "a special unit in Washington, D.C. to determine whether the activities of the organization contradict the public policies of the Administration."
IRS Provides its own Smoking Gun
On Monday the IRS provided the 'smoking gun' pointed at its own head, in reports and information showing that the government agency made decisions based upon the views of pro-Israel groups which disagreed with the administration about the 'Disputed Territories.'
The Jewish Press
Published: June 25th, 2013
IRS documents revealed the Service had been targeting pro-Israel groups whose view on the territories differed from the administration's.
Ever since the beginning of the scandal concerning the United States Internal Revenue Service and the claims that it had a policy of treating differently – as in worse – organizations seeking tax exemptions if those organizations held positions in conflict with this US administration, there have been doubters.
And, of course, the way the story has been spun fans the flames of doubt – yes, the IRS finally admitted, after years of denial, that it had targeted certain groups and subject some groups to extra scrutiny, but there was no political impetus for the inappropriate action, there was just poor oversight of overworked civil service employees who were just trying to streamline their jobs. Heck, the claim went, that was wrong, but what we now recognize as inappropriate actions weren’t taken for political purposes. That was the claim.
And the IRS is trying desperately to make glib admissions, have some heads roll, even parade some of those heads around to show how seriously the IRS takes its need to be punished. But now, it’s time to move on. The IRS is even providing a kind of amnesty for many of the politically conservative groups that complained – they are getting hand-delivered approval letters, and future applicants will be assured of an easier time going forward.
So, maybe it is time to move on.
Well, one little organization (the one this reporter founded and of which she is the president) refuses to go flying no matter how hard the IRS is shaking its leg to free itself.
Z STREET claimed when it filed its lawsuit for viewpoint discrimination against the IRS in August, 2010, that the IRS treated Z STREET differently subjecting it to additional scrutiny, because of its ideological views.
Two things happened on Monday, June 24, that proved, finally, that Z STREET – and others similarly situated – was correct. PLEASE CONTINUE READING THE REST OF THE ARTICLE: http://www.jewishpress.com/news/irs-we-targeted-supporters-of-israels-disputed-territories/2013/06/25/