Suit Claims IRS Has Special Policy To Scrutinize Non-Profit Applications From Pro-Israel Groups Opposed To Obama Policies

The non-profit pro-Israel, Zionist group, Z Street, filed a lawsuit in a Pennsylvania federal district court last week challenging on free expression grounds a purported policy of the Internal Revenue Service to scrutinize particularly closely applications for Section 501(c)(3) non-profit status from organizations that deal with Israel, and especially if the organization supports policies inconsistent with those of the Obama administration on the Middle East. The complaint (full text) in Z Street v. Shulman, (ED PA, filed 8/25/2010), asks for a declaratory judgment that the Israel Special Policy amounts to viewpoint discrimination and seeks an injunction requiring disclosure of the origin and development of the Special Policy. The lawsuit also asks the court to order that Z Street's application for non-profit status be considered expeditiously and fairly. In a press release announcing the lawsuit, Z Street said that its application for non-profit status was filed in January and has, according to an IRS agent, been stalled because of this special policy. The Forward last week said that experts are skeptical about Z Street's claim that its application was sent to a special IRS unit to determine whether its policies contradict those of the administration.