If You Donate To Israel, You May Be A Supporter of Terrorsim - Says the IRS

In a follow-up to the legal troubles of Z Street, here is the affadavit of an IRS employee which is straight forward: if you contribute charitable funds to Israel, you may be supporting terrorism and therefore, the organization which is the recipient of your contributions can have its tax exmpt status held up. Z St. comments included:

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

Z STREET, INC.,
Plaintiff, No.2:IO-cv-04307-CMR
v.
DOUGLAS H. SHULMAN, IN HIS OFFICIAL CAPACITY 

AS COMMISSIONER OF INTERNAL REVENUE,
Defendant.

DECLARATION OF JON WADDELL

I, Jon Waddell, pursuant to 28 U.S.C. § 1746, do hereby declare as follows:

1. I am the Manager of Exempt Organizations Determinations Group 7830 (the Touch-and-Go or "TAG" Group). I have held this position since November, 2009. I have been employed by the IRS since August, 1998.
2. On July 23, 2010, Bill Angner, a Manager in the Exempt Organizations Determinations Group contacted me regarding Z Street's application for recognition of exempt status and whether or not a referral to the TAG group was appropriate.
3. On that date, I spoke with Bill and reviewed Z Street's application, including website printouts of Z Street's website, www.zstreet.org. I determined that a referral to the TAG group was appropriate because, among other things:
a. The application indicated that Z Sreet could be providing resources to organizations within Israel or facilitating the provision of resources to organizations within the state of Israel; [THERE IS NOT NOW, NOR HAS THERE EVER BEEN, BECAUSE IT IS NOT TRUE, ANY INDICATION AT ALL THAT Z STREET PROVIDES ANYONE OR ANYTHING IN ISRAEL WITH ANY RESOURCES. ADDED BY Z ST]
b. Israel is one of many Middle Eastern countries that have a "higher risk of terrorism." (LR.M. 7.20.6.7.5.2(1). See also http://www.state.gov/s/ct/rls/crt/2008/122433.htm); and
c. A referral to TAG is appropriate whenever an application mentions providing resources to organizations in a country with a higher risk of terrorism. [IN OTHER WORDS, ISRAEL SUPPORTERS ARE TREATED AS IF THEY ARE AS LIKELY TO BE SUPPORTERS OF TERRORISM AS ARE ACTUAL SUPPORTERS OF TERRORISTS BECAUSE TERRORISM HAPPENS IN ISRAEL. ADDED BY Z ST.]
A referral to the TAG group does not indicate that the organization supports terrorism, only that further development is necessary to ensure that the organization will put procedures in place to prevent resources from being used to support terrorism. [FURTHER, THE Z STREET CHARTER SPECIFICALLY OPPOSES TERRORISM AND OPPOSES DEALING WITH TERRORISTS IN ANY WAY./Z ST]
5. For instance, the TAG group ensures that organizations that may provide resources to countries with a heightened risk of terrorism:
a. Are aware of the Office of Foreign Assets Control ("OFAC") requirements regarding providing funds to foreign countries; [HAD Z STREET BEEN ASSIGNED TO THE TAG GROUP AS WADDELL STATES, HOW IS IT THAT 5 MONTHS LATER THE IRS TAG GROUP HAS STILL NOT TAKEN ANY EFFORTS TO ENSURE IT IS AWARE OF ANY OF THESE ISSUES? ADDED BY Z ST]
b. Have procedures in place to ensure that resources are not diverted to individuals and organizations on the OFAC list; and [SEE ABOVE. " "]
c. Have procedures in place to ensure that any grants they give are used for appropriate, charitable purposes. [SEE ABOVE/ " "]
6. Z Street's application was not referred to the TAG group because of an "Israel Special Policy" as alleged in Z Street's complaint.
7. Z Street's application was not referred to the TAG group because its viewpoints on Israel contradict the viewpoints espoused by the Obama administration.

CERTIFICATION
I declare under penalty of perjury that the foregoing is true and correct.
Executed on: [Dec. 8, 2010] Jon WADDELL [Original signed]
Manager,
Exempt Organizations Detenninations Group 7830,
Internal Revenue Service.

Full brief is here.

I am waiting for comments by lawyers and attorneys but on the face of it, it could be argued that the IRS has created a detour system for harrassing groups they don't especially like, or that oppose Administration policies, in disguise. It is highly suspect that the potential threat of terrorism would play a role in this administrative procedure.

First, the IRS's duty, I think, is limited to whether or not the monies a group distribute go to the organizations listed and not another group or that the goals of the receiving group are legitimate and worthy. It is another orgnaization's duty to decide whether the group is practicing crime.

For example, a resident of a prison in the States cannot vote. Does an Election Board official have to check whether a Mr. X is committing a crime which may make him a potential prison resident and therefore his right to vote is cancelled?

Second, as pointed out, if there is a terrorist threat, it is one that Z Street would seem to alleive by promiting policies that seek to strengthen Israel's security through a proper US appraoch to diplomacy.

In addition, I would think that if only in July the doubts arose, after several months of review of Z Street's application, then definitely there is foot-dragging here.

Come back for more.

^

Follow-up to the IRS Scrutiny Division on Z Street

Sent this on the Z Street vs. IRS:

I told the CPA who handled the 501 exemption for _____ a couple of years ago about Lori’s lawsuit. Today he sent me an email telling me that his office is working on a tax exemption for a major Jewish religious organization that holds prayer services and Torah classes where each center files for its own exemption. There is no mention of Israel in its application.

They rec’d a letter from the IRS with the following questions:

Does your organization support the existence of the land of Israel?
Describe your organization’s belief system toward the land of Israel.

Ladies and Gentlemen,

This is illegal and repressive.


- - -

Ha-Ha-Haaretz Helps Out The IRS

America is building outposts

When the right decided to undermine leftist organizations like Breaking the Silence, it didn't know what trouble it was getting itself into. Jews who build illegal houses in settlements and outposts with the help of donations should keep their hands out of other Jews' pockets.

Jewish peace organizations in the United States recently sent the American tax authorities information about settler organizations that have been using tax-free donations for activity that contradicts American law or policy.

For example, both the Shuva Israel association, registered in Austin, Texas, and the Shomron Liaison Office, located in the West Bank settlement of Revava, are raising funds for outposts. The latter, together with The Zionist Freedom Alliance, offers free housing and food to volunteers who assist in building and planting in the El Matan outpost.

Much of this information can be found in the latest report of the International Crisis Group, a group of retired diplomats and academic researchers, on the religious right's activity in the settlements. For example, the settlement of Sussya in the southern Hebron Hills is raising funds on its Internet site; donations are payable to a tax-exempt American organization, P.E.F. Israel Endowment Funds, Inc. The Ariel Academic Center's web site posts American contact numbers for obtaining "special" tax breaks. The Hebron Fund raises an average of $1.5 million a year to support Jewish settlement in the city. Leaders of the One Israel Fund, which works to help the settlements, have claimed that their organization is the largest charitable association in North America. And a fund raiser for the Yad Yair outpost told Crisis Group members that he raised $500,000 in the U.S. to buy land for the outpost near Ramallah.

Under U.S. law, all section 501(c)(3) charitable organizations are required to be organized and operated for charitable purposes. If the Internal Revenue Service receives indications that a charitable organization might not be operating in compliance with U.S. tax laws, this information is referred for review and, if the facts and circumstances warrant it, further action, including examination. An examination can result in a wide range of action by the IRS, including, where appropriate, revocation of tax-exempt status. By law, the IRS cannot comment on whether it has initiated an examination, or on the results of an examination.

Perhaps for this reason, IRS spokesman Bruce Friedland said merely that the agency's policy is to investigate any information on tax law violations that comes in and take appropriate measures, including rescinding the exemptions of organizations that do not abide by the law's provisions.

Whoever breaks the law, should be investigated.

Like Peace Now.

Like this:

Israel Resource Review

Letter of Complaint Filed Against the Americans for Peace Now
By Commissioner Mark W. Everson Wed Jun 10 2003

June 5, 2003

Commissioner Mark W. Everson
Internal Revenue Service
Washington, DC 20224
202-622-4115

RE: Request for injunction and investigation against Americans for Peace Now for illegally utilizing U.S. charitable contributions for matters of Israeli politics, violation of Internal Revenue Service Code 501(c) and other matters.

Dear Mr. Everson:

I am writing to you to request an immediate injunction and investigation of the activities of Americans for Peace Now [hereafter referred to as APN], a front organization for the Israeli based Peace Now [hereafter referred to as PN] political organization.

APN is a non-profit Internal Revenue Code (IRC) 501(c)(3) tax-exempt charity organization located at 1815 H Street, NW Suite 920 Washington, DC 20006. Entities organized under this section of the IRC receive preferential tax status so that their income is either totally or partially exempt from federal taxation. In order to qualify for this preferential tax status, this organizations must abide by specified limitations on their political activity. According to fillings with your agency, their mission is one of "education." However, both the APN and their Israeli based sister group PN, have a long history of pro-Arab political activism, and they work hand-in-hand to bring about their political message. PN is a political activism group whose propaganda is directly focused on influencing Israeli political candidates, as well as swaying voters of the State of Israel through United States tax deductible funds raised and provided by APN.

The United States Federal Election Campaign Act (FECA), as well as the regulations and rulings of the Federal Election Commission, set limits for certain kinds of activities. FECA prohibits both for-profit and nonprofit organizations from engaging in campaigns for political candidates. Both federal tax law and FECA law and regulations prohibit nonprofit organizations from engaging in political activity that supports a candidate for public office, even nonpartisan office. What APN is doing is funding an organization outside of the United States which is advancing its political agenda through lobbying, and public persuasion. If it is prohibited in the United States, how much more so should it be when an American nonprofit group facilitates it in a foreign country?

According to APN, its purpose is to "Educates Americans about the Middle East peace process to create an informed and empowered pro-peace American public." Conversely, what APN is actually doing is acting as a front for PN activities, and funneling United States charitable dollars for political activism to a foreign country. The APN clearly states in their official charter that their cause is to "support the activities of Shalom Achshav [Peace Now]."

The United States government is directly assisting the funding of PN in Israel, through their Federal Employee Campaign-Overseas (CFC-O). This is a program which allows U.S. government employees to donate funds to APN which is listed on their official documents "Americans for Peace Now (0438)." This is a program of the Department of Defense approved and endorsed by both Richard B. Myers, Chairman of the Joint Chiefs and Donald H. Rumsfeld, Secretary of Defense.

It has recently been widely reported in the Israeli media that APN was a major illegal source of funding for the campaign of former Israeli Prime Minister Ehud Barak. Yossi Sarid, a member of the Israeli Knesset himself--and Peace Now joined forces with "Ehud Barak, and became an integral part of his election campaign in 1999." Only after he was elected did the close connection between Peace Now and Barak's election headquarters become known, in the context of the nonprofit organizations affair. They had a dilemma of how to prepare their books to demonstrate funding was legal, so Musi Raz, then the head of Peace Now and now a Knesset member for Meretz, suggested that Haim Mandel Shaked solve the funding problem by raising funds from "American Friends of Peace Now". "Everything remained confidential because Peace Now was prohibited from any involvement in party politics. Immediately afterwards, Haim Mandel Shaked told the poster campaign operations people, "We have the funding. Ask Musi Raz." "The amount was about $100,000," Musi Raz confirmed to me. A source in Barak's 1999 election headquarters says, "The campaign funded by Peace Now was Ehud Barak's campaign."

These PN activists have had multiple conflicts with the Israeli police, and violence has been known to break out on more than one occasion at events where PN was expressing its political opinion. Using money funneled from the United States, they are able to seek permission to cross into the United Nations "Green Line" of Israel, in the disputed territory, and launch strong political rallies which may have an impact on peace in the Middle-East. These rallies which are being illegally funded by American dollars have the potential to damage President Bush's Road Map to peace.

In Israel, PN facilitates their propaganda at large meetings and massive political rallies, many times led by elected Israeli politicians and party leaders. These are not educational activities. What APN is doing is financially backing political activism in Israel bent on swaying the Israelis voters to vote for specific political parties and agendas. Many of these rallies, some which have had upwards of 150,000 people in attendance, are endorsed and attended by partisan members of the Israeli government. The actions of APN are thus a clear and illegal violation of the IRC 501(c)(3) which states:

"no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation.and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office."

Over the last five years APN has collected tax deductible donations from United States citizens and provided the Israeli PN organization at least $3,830,295 USD to be used for political means. The money is accepted in Israel by Shalom Achshav [Peace Now in Hebrew] and used for its "Education" fund. Donations sent to Israel are as follows:

2001 $452,833 USD. (IRS Form 990 Part II, Line 22).
2000 $763,750 USD. (IRS Form 990 Part II, Line 22).
1999 $1,041,374 USD. (IRS Form 990 Part II, Line 22).
1998 $695,500 USD. (IRS Form 990 Part II, Line 22).
1997 $876,838 USD. (IRS Form 990 Part II, Line 22).

High ranking officials of the Israeli Knesset (government) have been apprehensive of PN for many years. Knesset member Ophir Pines-Paz, wrote an op-ed piece in Ha'aretz newspaper calling PN, "a small extremist movement." It was reported in the Israel press that Knesset member Kleiner accused the PN organization of advancing the Arab agenda by offering incentives for Jews to accept monetary compensation to leave their homes. Kleiner added the PN activists were in essence assisting terrorism by bringing about the transfer of Jews from their homes. One Israeli report recently made reference that the American based AFP was not a "support group" for the Israeli PN movement-but was its "home office." In reference to another American based front group who was funneling American charitable dollars out of the country, New York Attorney General Eliot Spitzer wrote to the IRS in October of 1999 stating: "The misuse of charitable status to funnel money to a non-charitable organization is illegal and abhorrent."

Under U.S. law, any person or group may establish an organization with charitable purposes, and the creators of the organization are free to choose any charitable endeavor they wish to pursue. If the organization applies to the IRS for recognition of tax-exempt status, and shows that it meets the requirements of Section 501(c)(3) of the IRC, it will be recognized exempt until it ceases to exist or until the IRS determines it no longer meets the requirements and revokes exempt status. A charity may have its Section 501(c)(3) application denied or its existing tax-exempt status revoked by the IRS if it does not comply with these standards. A "revocation" means that the organization becomes taxable and that donors will receive no tax benefits from contributions to the organization. As a citizen of the United States I am writing this formal complaint to inform you of APN's violation of the IRC 501(c)(3). It is quite apparent that U.S. charitable dollars are being misused to finance PN's internal political agenda in Israel, using APN as a front group to raise money. I am requesting an immediate suspension of APN's assets, and a full investigation. I ask that your office follow up with me on this matter which is in the public interest.

Respectfully yours,

Sent via email and registered U.S. mail

[Name withheld]

CC:
Internal Revenue Service
Criminal Investigation Division
Philadelphia, PA 19255

The Honorable Congresswoman Eleanor Holmes Norton
2136 Rayburn House Office Building
Washington, D.C. 20515

Assistant Director in Charge
Van A. Harp
Federal Bureau of Investigation
601 4th Street, N.W.
Washington, D.C. 20535-0002

The Honorable Thomas F. Hogan
Chief Judge, U.S. District Court for the District of Columbia
E. Barrett Prettyman U.S. Courthouse
333 Constitution Avenue, NW
Washington, DC 20001

The Honorable Congressman Tom Feeney
323 Cannon House Office Building
Washington, D.C. 20515-0924

Well?

On The Issue of Tax-Exemptions

Haim Dov Beliak, is a rabbi serving Hawaiian Gardens and a Jewish religious leaders in California who is trying to block the flow of funds to the settlers.

According to the UK Guardian:

Beliak helped launch the Coalition for Justice in Hawaiian Gardens & Jerusalem to stop the flow of money from the bingo hall to the settlements. Its investigations of tax records show that the Moskowitz Foundation's donations include grants to Beit Hadassah, a militant Jewish settlement in the heart of the West Bank city of Hebron.

...Beliak is particularly angered that the fundraising takes place without interference from the American authorities. In contrast, he says, Muslim charities which raise money to help Palestinians have been targeted for investigation, shut down and some of their administrators jailed because providing welfare to Gaza indirectly helps Hamas.

"After 2001 there was a whole discourse about how supposedly Muslims [in America] used these charitable donations to support violence.

"There was never ever in the US anything substantially that made that case. But here they did have a case where somebody was using money to support settlers, money that fosters extremism and violence, and they completely ignored it," said Beliak.

First off, there sure was much made of illegal "charitable" covered funding going to Islamic terror groups that kill Jews. It wasn't "supposedly".

Secondly, money donated to schools, synagogues, welfare for the elderly, educational institutions, etc. in Judea and Samaria does not foster extremism and violence. The Rabbi lies.

Thirdly, a Rabbi, being a Jewish leader, should know that Jews have the right to live in their homeland. You want, Haim Dov, a "Palestinian state"? Fine. But why does that preclude Jewish residents? If I preclude Arabs from living in Israel pre-67 would you condone that?

Fourthly, this tax-exempt matter is popping up, first David Ignatius (and this, too) and then some Israeli expatriate with both Canadian and American citizenship. It needs to be addressed. But we needn't worry too much despite complaints already filed.

Back in 1989:

A coven of witches has won tax-exempt status in Rhode Island as a legitimate religious group. Tax Administrator R. Gary Clark said he overturned the state's initial ruling, which denied the Rosegate Coven a sales-tax exemption

And I wonder, are all the Hadassah Mt. Scopus and Hebrew University Mt. Scopus buildings totally within the former Mt. Scopus enclave or are they across the Green Line for the IRS? Kuppat Holim in Ramat Eshkol, French Hill, etc.? I'm sure this would affect a lot of monies.