Federal Court recognizes Z STREET has raised constitutional claim against IRS

Case 2:10-cv-04307-CMR Document 28 Filed 02/13/12 page 1 of 1

                                 IN THE UNITED STATES DISTRICT COURT
                            FOR THE EASTERN DISTRICT OF PENNSYLVANIA
_____________________________
Z STREET,
       Plaintiff,                                            :             CIVIL ACTION NO. 10-4307
                                                              :
                v.

DOUGLAS H. SHULMAN, in his official :
capacity as Commissioner of Internal
Revenue,                                                  :
             Defendant,                                   :
_______________________________

                                                                O R D E R

      AND NOW, this 13th day of February 2012, upon review of Defendant’s Motion to Dismiss [Doc. No. 19], Plaintiff’s Response, and Defendant’s Reply, and finding that Plaintiff’s single count Complaint, pursuant to the Declaratory Judgment Act and the First Amendment to the Constitution, is best construed as a controversy arising under 26 U.S.C. Sec. 7428, which provides for declaratory judgments in suits related to the classification of organizations under Section 501(c)(3)¹, and finding that this Court does not have jurisdiction over such suits², it is hereby ORDERED that this case be TRANSFERRED to the District Court of the United States for the District of Columbia.

IT IS SO ORDERED.

                                                 BY THE COURT:
                                                 /s/ Cynthia M. Rufe
                                                _________________________
                                                CYNTHIA M. RUFE, J.

______________________
¹ The Complaint states, inter alia, “Wherefore, Plaintiff seeks a Declaration that Defendant’s substance and application of the Israel Special Policy to any application for tax-exempt status constitutes discrimination among viewpoints and a violation of the Plaintiff’s right to freedom of speech as guaranteed by the First Amendment to the United States Constitution.” The Court shares Plaintiff’s view that this is a case about constitutionally valid process, and finds that 26 U.S.C. Sec. 7428 is the statute which establishes Plaintiff’s right to challenge the IRS’s 501(c) classification process.

² 26 U.S.C. Sec. 7428 reads, in pertinent part: “upon the filing of an appropriate pleading, the United States Tax Court, the United States Court of Federal Claims, or the district court of the United States for the District of Columbia may make a declaration with respect to such initial qualification or continuing qualification.”