The same Internal Revenue Service office that singled out Tea Party groups for extra scrutiny also challenged Israel-related organizations, at least one of which filed suit over the agency’s handling of its application for tax-exempt status. …

“I can’t believe it was just about Z Street, because it’s a tiny organization,” Lowenthal Marcus said of the group, which has been critical of President Barack Obama for being too cozy with left-leaning Jewish groups like J Street and with pro-Palestinian entities.

Z Street filed a lawsuit against the IRS in 2010 alleging that one of its attorneys were told its application for tax exemption was delayed and sent to a “special unit…to determine whether the organization’s activities contradict the Administration’s public policies.” …

Legal filings show that the problems for Z Street — and apparently for other Israel-related groups — stemmed from an obscure unit in the Cincinnati IRS office: the “Touch and Go Group.” One of the so-called TAG Group’s duties was to weed out applications that might be coming from organizations which might be used to fund terrorism.