Is this actually the end of the IRS scandal story after all these years? It was announced a few days ago that the Internal Revenue Service has apologized to Lori Lowenthal Marcus, the founder of Z Street, a non-profit group aimed a educating people about Middle East issues and providing funding to pro-Israel causes. Marcus applied for 501(c)(3) status as a non-profit entity when she founded the organization in 2009. Instead of the normal three to six month processing time, Z Street’s application collected dust until 2016. The details behind the apology are stunning. (Government Executive)
The Justice Department, in what a spokesman called the “final settlement” in a series of cases accusing the Internal Revenue Service of political bias, on Thursday announced an agreement with a pro-Israel nonprofit called Z Street.
Reflecting the signing of a consent order by Acting Internal Revenue Commissioner David Kautter, the Justice Department said the agency had issued an apology for the “heightened scrutiny” of the group’s application for tax-exempt status that took six years to process.
“Tax exemption eligibility should be based on whether an organization’s activities fulfill requirements of the law, not a group’s policy positions or the name chosen to reflect those views,” said Principal Deputy Assistant Attorney General Richard Zuckerman, who joined Justice as head of the Tax Division last month.
This was more than a simple delay. After asking why things were taking so long, Marcus later learned that the IRS had pulled her application for special scrutiny and they explicitly admitted the reason was that the group’s activities, “related to Israel.” After bringing the lawsuit, Marcus was informed that her application (along with a number of others, presumably) had been sent to, “a special office in Washington for review of whether the applicants’ policy positions conflicted with those of the Obama administration.”
What did the IRS suspect she might be doing? “The IRS needed to investigate whether Z Street was funding terror.”
Yes, the Internal Revenue Service Office of Exempt Organizations, under the leadership of Director Lois Lerner, was pulling 501(c)(3) applications from groups supporting Isreal to find out if they were funding terrorism. It’s enough to make your head spin. And yet, as you may recall, when the FBI concluded their investigation of the IRS scandal in 2015, they found, “no evidence that any IRS official acted based on political, discriminatory, corrupt, or other inappropriate motives that would support a criminal prosecution.”
If you look at the full apology issued to Z Street, you’ll see that the IRS was still covering their collective backsides and had inserted a poison pill into the apology. The final paragraph reads as follows: “The declaration . . . above does not constitute a finding by the Court that the IRS committed any violation of law or otherwise acted in bad faith in this case.”
Simply amazing. And before we close the book on this sad chapter, I’ll leave you with a reminder of one other pertinent fact. Lerner was never punished and she was allowed to retire. That retirement is worth an impressive amount in cash and benefits, the details of which are still not fully available to the public.