The judge ruled the IRS is not immune from claims it is acting unconstitutionally.
If the IRS had behaved itself, Z Street would rarely have ever made the headlines outside of the small world in which anti-Israel and pro-Israel groups argue with each other. But then the IRS, following the lead of the New York Times, decided to be overt about Obama's policy of political intimidation. And now a crack has opened.
On Tuesday, a federal judge refused to dismiss a suit brought by a pro-Israel group against the IRS. In her ruling, Judge Ketanji Brown Jackson demanded that the agency stop “attempting to thwart this action’s advancement,” and ordered the IRS to respond to the complaint within thirty days.
The Philadelphia-based group, Z Street, applied for tax-exempt status in 2009 and the IRS responded slowly. In 2010, Z Street filed a lawsuit against the IRS. When asked why the application had not been processed, an attorney for the IRS responded that its application had been sent to a “special unit… to determine whether the organization’s activities contradict the Administration’s public policies.” The special unit was referred to as the “Touch and Go” division or TAG. Later an IRS manager acknowledged that pro-Israel groups were getting special scrutiny:
Judge Ketanji Brown Jackson, interestingly enough, was appointed by Obama. I don't know whether to consider that significant or not.
Z Street subsequently sued the government and rightly argued that its constitutional rights had been violated because of the “viewpoint discrimination” that the IRS agent had openly displayed. Now after years of delays, Judge Jackson has ruled that by asserting that Z Street had no right to sue, the government had tried to “transform a lawsuit that clearly challenges the constitutionality of the process … into a dispute over tax liability.” She similarly dismissed the government’s claims of sovereign immunity.
As the Wall Street Journal editorial page noted yesterday:
"This ruling will force the IRS to open its books on the procedures it used and decisions it made reviewing Z Street’s tax-exempt application, procedures it has tried to keep shrouded. As the case proceeds, Z Street’s attorneys can seek depositions from many who have been part of the larger attempt to sit on similar applications by other conservative groups."
In other words, this case may be the straw that breaks the camel’s back of the IRS’s politically prejudicial policies. If an IRS agent can reject or stall a pro-Israel group’s application on the grounds that “these cases are being sent to a special unit in the D.C. office to determine whether the organization’s activities contradict the Administration’s public policies,” then no group, no matter what its political orientation or cause is safe from being subjected to a political litmus test designed by any administration of either political party.
Lerner made a number of stupid mistakes, but Gentry made a much worse one. And it may prove to be the bigger crack in the IRS' wall of silence.
The judge rejected the third defense – one of sovereign immunity – raised by the IRS by pointing out that the government may not claim it is immune from claims that it is acting unconstitutionally.
Indeed, that is the basis for the Bill of Rights.