Z Street: The Case Which Could Blow Open The IRS Scandal

posted at 4:01 pm on July 19, 2014 by Jeff Dunetz

In August of 2010, almost three years before Lois Lerner announced at a law conference that the IRS had indeed targeted certain groups, Z Street filed a lawsuit contending they were being targeted by the IRS because they disagreed with the President’s policy on Israel. In fact Z Street filed their suit against the IRS after an agent allegedly told them his direction was 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.” 

Z Street was created as a non-profit organization with the purpose of “educating the public about Zionism; about the facts relating to the Middle East and to the existence of Israel as a Jewish State; and about Israel’s right to refuse to negotiate with, make concessions to, or appease terrorists.”

In its lawsuit against the IRS, Z Street alleges that the IRS violated the First Amendment when it implemented a policy that subjected Israel-related organizations applying for tax-exempt status to more rigorous review procedures than other organizations applying for that same status. They call this viewpoint discrimination.

Ironically Z Street’s case received a boost last summer when Democrats tried to defend the administration and prove the IRS was not just engaging in viewpoint discrimination against politically conservative groups. As part of its defense, the Democrats on the House Ways and Means Committee and Senator Sander Levin (D-MI)​ released 14 IRS documents indicating the IRS created a category for review it labeled “progressive.”

Within that “progressive category” there was a subset labeled  “occupied territory advocacy”  (page 12 of linked document) That particular subset contained only one organization: Z Street. According to the documents, a notice to IRS inspectors to “be on the look out” (BOLO) for groups under this category was sent on August 6, 2010, just days after Z Street’s file was reviewed.

In other words, the IRS was indeed singling out applications for tax exempt status on the basis of a particular political viewpoint, advocating for the “occupied territories” which is inconsistent with this administration’s.

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.”

However after taking a look at the 14 documents related to the case released by Rep Levin:

  • 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.

In other words take one wild guess who the one group filed under “Occupied Territory Advocacy was?  Z Street!

The IRS has defended itself in the Z Street lawsuit on several different grounds, including the absurd notion that the government is immune from such a lawsuit. Perhaps they never heard of the First Amendment to the Constitution (they should have, after all that Constitution thing was in all the papers).

However after four year of IRS delay tactics, two months ago a U.S District Judge rejected the Obama administration efforts  to stop Z Street’s legal challenge, giving the organization a green light to go after the IRS.

In her ruling Judge Ketanje Brown Jackson wrote:

Z Street merely asks the Court to require the IRS to go about it[s] usual business of evaluating Section 501(c)(3) applications in a manner that comports with the Constitution. The only matter at issue in the instant lawsuit is whether, in addition to evaluating Z Street’s activities as it would any other organizations, the IRS may constitutionally apply a more stringent standard of review that is allegedly reserved for organizations whose activities relate to the promotion of Israel.

Last week the case began its discovery phase.

The Z Street case has the potential of blowing the IRS scandal wide open. First of all, it is the furthest along, and probably will be decided first. They can put on the stand the IRS employee who said they were being scrutinized because their policy is different than the Obama administration’s, and the lack of terrorism in any of the documents released by Rep. Levin indicates that the TAG manager who said Z Street was being examined because of terrorism in Israel may have been committing perjury.

Despite all the evidence in the Z Street case, the FBI who is supposedly investigating the case has not contacted them. Z Street President Lori Lowenthal Marcus wasn’t contacted by the Ways and Means Committee she was forced to contact them. According to Lowenthal Marcus, they listened and chose to focus on the politically conservative groups). Reps Cummings and Levin who are constantly complaining about the “progressive organizations targeted by the IRS never contact that supposedly progressive organization.  And of course with the exception of the Wall Street Journal and Fox News most of the media, even the conservative media haven’t covered the Z Street case.

That’s the real sad part the case with the most potential to blow the IRS scandal wide open is being ignored by the people trying to blow the scandal wide open.

Z Street President Lori Lowenthal Marcus was a guest on the Hump Day Report Radio program this past Wednesday.  If you wish to hear the interview and learn more about the case, click here.


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Better subpoena that IRS employee stat, before they take a jog in Ft. Marcy Park…

Joe Mama on July 19, 2014 at 4:12 PM

Despite all the evidence in the Z Street case, the FBI who is supposedly investigating the case has not contacted them. Z Street President Lori Lowenthal Marcus wasn’t contacted by the Ways and Means Committee she was forced to contact them.

Its almost as if they don’t want anything to come of this lawsuit?

I am sure the relevant hard-drives will disappear or fail at the most convenient time.

Reps Cummings and Levin who are constantly complaining about the “progressive organizations targeted by the IRS never contact that supposedly progressive organization.

That’s the real sad part the case with the most potential to blow the IRS scandal wide open is being ignored by the people trying to blow the scandal wide open.

What makes you think the GOP has any more interest in ‘blowing open‘ the IRS scandal than the Democrats do? They want to make political hay from it, but like Boehner’s lawsuit, it is mostly for show, not actual results.

sharrukin on July 19, 2014 at 4:19 PM

Bo says he will punish his enemies.(period)

tim c on July 19, 2014 at 4:21 PM

As long as the DOJ feel comfortable telling congress to phuck off, nothing is going to blow the IRS scandal.

oscarwilde on July 19, 2014 at 4:21 PM

IMPEACH!!!!!

renalin on July 19, 2014 at 4:24 PM

For Christ’s sake these are the criminals who will handle our health records. They must be stopped.

Old eagle on July 19, 2014 at 4:31 PM

“Blow open the IRS scandal?”
That would suggest a media who gives a damn,
A populace with two brain cells to rub together,
And a government with any concern at all about rule of law.
“Blow open”, har!

squint on July 19, 2014 at 4:36 PM

Obama has weaponized the entire executive branch of the federal government.

The IRS, DOJ, EPA, FEC, FCC, DHS, HHS, etc., all act like branches of OFA.

The lawlessness of this administration is off the charts.

AZCoyote on July 19, 2014 at 4:47 PM

If targeting of progressive groups really happens, the IRS would have branch offices at CAIR, the SPLC, and other hate groups.

Happy Nomad on July 19, 2014 at 4:52 PM

The IRS, DOJ, EPA, FEC, FCC, DHS, HHS, etc., all act like branches of OFA.

The lawlessness of this administration is off the charts.

AZCoyote on July 19, 2014 at 4:47 PM

You forget the NSA. As if that awesome database that OFA used to micro-target votes on a block-block basis came from grassroots activism.

Think about it, is it more likely that OFA got all that information on Americans from illegal snooping or some lesbian in a save the whales t-shirt ratting out her neighbors preferences?

Happy Nomad on July 19, 2014 at 4:55 PM

…not a smidgen!

JugEarsButtHurt on July 19, 2014 at 4:57 PM

There is a story this weekend that the First Yeti wants to mandate special shopping carts that judge your purchases as you put them in the cart. The idea is to better preach educate about good food choices, especially for those on food stamps.

Well, I have another idea if government is going to become this involved in our lives. Bright pink carts with “food stamp beneficiary” labeled on all sides. Put the wrong kind of Cheerios in your cart and a siren goes off and the cart announces “That item is not permitted on food stamps.”

Bottom line this administration is using the Executive Branch as a modern-day Stasi.

Happy Nomad on July 19, 2014 at 5:02 PM

We’re done…stick a fork in us. There’s no coming back.

FlaVet on July 19, 2014 at 5:07 PM

more like ZZZ street

corona79 on July 19, 2014 at 5:18 PM

Our Nation is being run by criminals – from the Oministration to both branches of Congress, and both parties.

Sorry to say, but I think it’s simply too late to do anything.

Key West Reader on July 19, 2014 at 5:20 PM

A fact of life is that if you keep poking a Wolverine with a stick, you will eventually get your balls ripped off.
Let the poking proceed.

Sgt Stryker on July 19, 2014 at 5:21 PM

Our Nation is being run by criminals – from the Oministration to both branches of Congress, and both parties.

Sorry to say, but I think it’s simply too late to do anything.

Key West Reader on July 19, 2014 at 5:20 PM

Sorry to say, but I agree with you.

The only viable solutions are unmentionable.

The Rogue Tomato on July 19, 2014 at 5:36 PM

The Z Street case has the potential of blowing the IRS scandal wide open

Yeah, like what we already know isn’t enough.

They could have video of Lerner sitting next to Obama and the cabinet going over applications with a box with a sign reading “Right Wing Nuts We Hate”… and as she places a stack marked TEA Party in it we hear her say, “to hell with the First Amendment” as Obama nods…

And nothing would happen. CBS would be featuring an “update” on the Mitt Romney “haircut SCANDAL!”

mankai on July 19, 2014 at 5:36 PM

The reason that the “Z Street” case is being ignored by those that are supposed to be trying to blow the IRS out of the water is, in reality, that is the last thing that they are trying to do. The real purpose of congressional investigations is make a lot of noise, look good on C-SPAN, but whatever you do don’t rock the boat. This is not a government of the people, by the people and for the people, it is a government for the government.

savage24 on July 19, 2014 at 5:50 PM

The only viable solutions are unmentionable.

The Rogue Tomato on July 19, 2014 at 5:36 PM

Yes, there are solutions. But they are not mentionable here. Let. It. Burn.

This is not a government of the people, by the people and for the people, it is a government for the government.

savage24 on July 19, 2014 at 5:50 PM

Ain’t that the truth. Which makes me think of a quote. Hmmm, where did I put that…….? Ah! Here it is:

That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

GWB on July 19, 2014 at 6:15 PM

Our Nation is being run by criminals – from the Oministration to both branches of Congress, and both parties.

Sorry to say, but I think it’s simply too late to do anything.

Key West Reader on July 19, 2014 at 5:20 PM

Sorry to say, but I agree with you.

The only viable solutions are unmentionable.

The Rogue Tomato on July 19, 2014 at 5:36 PM

You should both kill yourselves now and beat the rush, then.

Adjoran on July 19, 2014 at 6:16 PM

The Z Street case has the potential of blowing the IRS scandal wide open.

.
Just so I understand this organization and get it out into the comment section, this organization is one that advocates for Palestinian aspirations in the face the established Jewish State of Israel and against The State of Israel. Is everybody with me on this? This is the “progressive” viewpoint that Levin and Cummings wish to encourage?
.
How has Z Street been damaged by receiving funds from… who? From where? Aren’t these important questions, too?

ExpressoBold on July 19, 2014 at 6:16 PM

What, we have a Jewish guest author and nobody even puts out a spread? Where’s the hospitality? Were you people raised by wolves?

Noshing brings people together.

Palestinians blow them apart.

Adjoran on July 19, 2014 at 6:18 PM

Lessee now, we’ve got illegals coming across the border bringing crime, disease (now including plague), and undercover Moslems; we’ve got the third largest stock bubble in history; we’ve got a foreign policy that’s non-existent; we’ve got a Federal (or feral, as you prefer) government that’s mislaying live anthrax; and we’ve got 22% real unemployment.

We’re done…stick a fork in us. There’s no coming back.

FlaVet on July 19, 2014 at 5:07 PM

When the next market crash, the epidemics, the jetliners flying into the government buildings they missed on 9/11 all hit sometime in the next couple of years as WWV rages overseas, I think we’ll find we have no choice but to come back.

formwiz on July 19, 2014 at 6:19 PM

You should both kill yourselves now and beat the rush, then.

Adjoran on July 19, 2014 at 6:16 PM

Then who would you have to turn in to the enforcers for your extra ration of government cheese?

sharrukin on July 19, 2014 at 6:20 PM

. . . . . Z Street filed their suit against the IRS after an agent allegedly told them his direction was 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.”
.
Jeff Dunetz on July 19, 2014 at 4:01 PM

.
Does Z Street have ‘hard documentation’, as to that conversation?

I didn’t see it mentioned…

listens2glenn on July 19, 2014 at 6:30 PM

You should both kill yourselves now and beat the rush, then.

Adjoran on July 19, 2014 at 6:16 PM

.
No deal … you first

listens2glenn on July 19, 2014 at 6:31 PM

The MSM will be all over this story if cause and effect is demonstrated. Israel still comes first w much of the MSM. Anyone who thinks otherwise doesn’t understand the MSM.

matthew8787 on July 19, 2014 at 6:31 PM

Despite all the evidence in the Z Street case, the FBI who is supposedly investigating the case has not contacted them.

Yeah, you’d think maybe Holder is trying to BURY these problems by saying that he has the FBI “investigating” them.

Exit question for Mr Holder: WHO, exactly, is “investigating”? Got any names or phone numbers? Not that we don’t trust you. We don’t.

GarandFan on July 19, 2014 at 6:33 PM

This can’t be happening.

kcewa on July 19, 2014 at 6:40 PM

Glad to be a prepper deep in the heart of Texas…miles from the bowels of the corrupt cities and the liberal cesspools that infect the land…Time to go to Wally World for another box of cartridges.

If the muzzies don’t nuke us, the economy will crash and/or the people will riot…

But not around here…

bimmcorp on July 19, 2014 at 6:59 PM

You should both kill yourselves now and beat the rush, then.

Adjoran on July 19, 2014 at 6:16 PM

That’s a real nasty thing to say, dumbass…

bimmcorp on July 19, 2014 at 7:02 PM

Private lawsuits seem to be getting more info than Congress. Obama against the world.

Cindy Munford on July 19, 2014 at 7:50 PM

Expect some more ‘recycled’ hard drives from the IRS….

orangemtl on July 19, 2014 at 9:34 PM

I disagree with most of Z Street’s talking points. But their right to say them, and say them without Government interference to their pocketbooks, is certainly present in the First Amendment.

I have a problem with the Government taxing any act revolving around either freedom of speech, or of the press, or of religion, or of a right to petition the Government, or of the right to bear arms. Such taxes place a burden on our expression of the rights granted to each person (and, by extension, to organizations) in the Bill of Rights.

unclesmrgol on July 19, 2014 at 10:02 PM

Gee, I just heard a really loud noise from the East of here. I wonder what it …. Oh, I bet I know what it was. It was the sound of 8000 computer hard disks all crashing and blowing up with sparks and Hollywood pyrotechnics all at once. Betcha they were all in the IRS offices.

It’s time to shut down the government in a nice orderly fashion carefully branding every government non-military employee. Then we start the government up again not allowing anybody who was branded allowed to even mop government floors. Of course, no pensions should ever be paid out for those phased out. They don’t survive the reboot.

Sure, this will hit some pretty good people as it dismantles bureaucracies that are so crooked they best resemble the sculpture produced by pouring a few tens of gallons of liquid Aluminum into an African anthill. I guess all I can offer them is “collateral damage happens.” It’s them or all the rest of US.

{+_+}

herself on July 20, 2014 at 3:57 AM

Still the flip side of this coin is that this section of the IRS also perfected the “chosen few” from investigation to maintain”illegally” their tax except status. “the Clinton Foundation” and the verious Obama foundations. . This is a RICO operation. Through out history government have become criminal and courpt yet we can not except that this may have happened to us. With all the continue line of scandal no one has ever been held responsible for anything? These “leaders” are selected by their party bosses, not because they are the best and the brightest but because the are the easyest to control.

jpcpt03 on July 20, 2014 at 8:31 AM

Boy, the First has really taken a beating in the last 5 and a half years. A Pres. Warren would finish it off.

Kissmygrits on July 20, 2014 at 8:33 AM

A fact of life is that if you keep poking a Wolverine with a stick, you will eventually get your balls ripped off.
Let the poking proceed.

Sgt Stryker on July 19, 2014 at 5:21 PM

Wolverines!

The Buzz on July 20, 2014 at 10:04 AM

When some legitimate journalist writes a book about this ‘period’ in history, it will have to be shelved in FICTION because NO ONE ten years from now will believe that the behavior of King Putt and Eric Holder was possible.

Missilengr on July 20, 2014 at 10:28 AM

Welcome to the Chicago way of doing business.

Herb on July 20, 2014 at 11:36 AM

Why? Please anyone tell me why what we see in today’s government politics is in any way shape or form DIFFERENT then the politics of George Washington Plunkitt of Tammany Hall. “ There is dishonest Graft and Then There is Honest Graft”. “Dishonest graft one worked solely for one’s own interests, while for honest graft one pursued the interests of one’s party, one’s state, and one’s personal interests all together”.

Using political position for personal gain is not a new idea. The names change a little and the tools are more sophisticated but it is still just as criminal as ever. I truly hold these truths to be self evident that all crooks are created equal in the eyes of their party.

jpcpt03 on July 20, 2014 at 12:55 PM

4 years. The delaying tactics itself is a travesty of justice. So many ways this bureaucracy is just corrupt. It’s not just the elected liberal scum.

TfromV on July 20, 2014 at 1:18 PM

What if Mossad finds evidence of collaboration between IRS and Hamas? We might find the IDF making an incursion into Gaza West on the Potomac. To destroy the tunnels, of course.

platypus on July 20, 2014 at 2:13 PM

Last year I told friends this administration would collapse from the weight of its incredible incompetence.
I freely admit I was wrong.
This administration is instead slowly disintegrating from the cancerous corruption that appears to infect EVERY facet of Obama’s fiefdom.

partsnlabor on July 20, 2014 at 4:39 PM

I am pleased to see in some of these postings that “We The People” are starting to realize that it we are not seeing isolate occurrences of mismanagement or over zealous lower workers BUT a criminal organization designed to scam money from the people and see that it gets into the hands of the rich and powerful. This is a RICO organization that has been developed over the years to protect it’s self. Until more people, a few good leaders and a “ONCE AGAIN” Free press look at this in light of a RICO investigation we will not progress be on serfdom. This not the cause of one Political Party over another but a failure of the checks and balances of the five (5) branches of our Government.
1. Legislative
2. Administrative
3. Judiciary
4. Free to report Press
5. “We The People”

The current system is not designed to identify and correct problems BUT is designed to stall, divert and otherwise protect the power structure.

I can’t fix it, Hot Air can’t fix it, You can’t fix it. The only way is “We The People” together, not falling for the misdirections from the magicians behind the current but viewing the situations for what they are, a criminal POWER and INFLUENCE scam perpetrated on the people in the misused name of good Government. This is not new in the history of Governments. So why do we think these times are any different.

The alternative is join the ranks of the millions of citizens that have become expatriate’s. To live a peaceful life as a US Citizen, outside of the US Borders.

jpcpt03 on July 20, 2014 at 6:44 PM

The Case of Government as a Racketeering organization.

1. Government is currently in the “Protection Racket” for the protection of the upper 1% of the population that owns upwards of 35% of all wealth.
2. Since the 1990′s the government has been replacing organized crime in the numbers rackets with the “State” sponsored lotteries.
3. Starting in 2012 the Government created totally owned monopolies with in the medical communities moving Trillions of dollars into who’s? Hands.
4. In 2014 the government starts to take over the drug territories with the legalizing but under government control of the supply.
5. In 2010 the IRS approves some political trust fund as tax exempt under 901. Allowing them to move funds to off shore accounts and launder monies in a tax free and Government protected environment.

Wake up America we have been had. This is just low life street tugs doing what low life street tugs do. Just the have better suits on and learned that if the control the legislature then the control the crimes.

jpcpt03 on July 20, 2014 at 9:01 PM