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Honesty: A Refreshing, But Legally Lethal, Policy for IRS


Carly F. Gammill

May 8, 2015

5 min read

Free Speech



Two years ago, former top IRS official Lois Lerner publicly admitted, and apologized for, the IRS’s targeting of Tea Party applicants for tax exemption in an attempt to get out in front of the soon-to-be-released report by The Treasury Inspector General for Tax Administration (TIGTA) that would expose the agency’s misconduct and unlawful targeting.

The IRS’s lawyers told Lerner then the same thing they recently told a federal appeals court: the government is free to unconstitutionally discriminate against its citizens until such time as they are permitted to file a lawsuit to obtain a determination on their applications (i.e., 270 days for 501(c)(3) applicants and presumably indefinitely for 501(c)(4) applicants, as there is no such statutory deadline applicable to them).

In other words, the government has finally admitted what the rest of us have known for some time now: the IRS believes it is (for at least a 270-day period) above the law of the land.

In a case involving the same constitutional issue as the ACLJ’s pending Tea Party-related case—whether the IRS may lawfully delay processing tax exempt applications because of the viewpoint espoused by the applicant—Z Street, a pro-Israel organization, sued the IRS alleging that the agency unconstitutionally subjected its tax exempt application to special scrutiny in order to determine whether the group’s activities and connection to Israel “contradicted the policies of this Administration.” Scarier still, Z Street alleged, the IRS has created a “special unit in Washington, D.C.” to make these types of determinations.

When a D.C. district court judge appointed by President Obama held that Z Street’s lawsuit could move forward, despite the IRS’s objections, into the discovery phase of litigation—the part of the case in which the IRS would be required to turn over documents related to its targeting practice, and IRS officials would finally have to provide, under oath, answers about their discriminatory conduct—the agency sought to delay this process further, thinking it would find a panel of the D.C. Circuit Court of Appeals more sympathetic to its legal position.

On Monday, the IRS learned just how wrong that assessment was.

Those present at Monday’s oral argument described the court’s questioning of the IRS’s lawyer as a “pummeling” in which the panel “eviscerated the IRS and Justice Department.” The three judges hearing argument on the appeal refused to accept the government’s mischaracterization of the case—as one in which Z Street has an adequate statutory remedy under the provision of the Internal Revenue Code that allows 501(c)(3) applicants to sue for a tax exempt determination after 270 days—because Z Street’s lawsuit does not seek tax exempt status for the organization but rather requests constitutionally compliant treatment in the processing of its application. As one of the judges succinctly, and correctly, pointed out, neither a tax refund suit nor a suit seeking tax exemption could address the IRS’s discriminatory delay in the processing of Z Street’s application.

The Jewish Press reports the following line of questioning near the end of the argument from an incredulous Chief Judge Garland:

“You don’t want that to be our take away here, that the government’s position is the IRS is free to discriminate on the basis of viewpoint, religion, race, for 270 days?

“I think if I were you I would go back and ask your superiors whether they want us to represent that the government’s position in this case is that the government is free to unconstitutionally discriminate against its citizens for 270 days.

“I would be stunned if the current Attorney General agreed with that. Or the last Attorney General. Or the one before that, or the one before that. Or anyone. That can’t be the position. Now, do you want to think about it again, whether you really want that to be your position,” the Chief Judge stated.

Perhaps the most telling statement of the day was the IRS attorney’s response. Standing in the figurative shoes of the IRS, she was unapologetic and resolute, and with heels dug in, confirmed this is precisely the government’s position, as she simply “pointed out that many of her superiors were sitting in the courtroom, listening.”

This Sunday, May 10, marks two years since the IRS admitted it was unconstitutionally targeting politically dissident organizations for discriminatory and delayed processing of their applications for tax exemption.

Some of those organizations, including one of the ACLJ’s own clients, have been enduring this unconstitutional abuse for over five years without any resolution.

Despite the hubris exemplified by the position of the Obama Administration’s IRS and its brazen disregard for the constitutional rights of the citizens of this nation, however, the indignation expressed by the Z Street appellate panel offers a hopeful sign that the tide may finally be turning in this ongoing scandal and that this lawless campaign will not go unchecked forever.

How can we defeat an out-of-control bureaucracy like the IRS? Find the answer in ACLJ Chief Counsel Jay Sekulow’s new book, Undemocratic, which will be published on May 19th. You can pre-order the book now at Undemocraticbook.com

Get the new book from #1 New York Times bestselling author Jay Sekulow: UNDEMOCRATIC
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