NEW YORK – The US Treasury inspector- general offered no evidence that the term “pro-Israel” was one of several keywords that were flagged inappropriately by the IRS.Several media outlets have alleged that, since 2010, the Internal Revenue Service has unduly scrutinized applications for tax-exemption status that include keywords such as “Tea Party” and “patriot.”A recent story from the Politico website – and picked up by the Drudge Report – cited complaints from Z Street, a small pro-Israel organization, alleging that the IRS had been asking them intrusive questions beyond what is normal since at least 2010. The allegation has been conflated by the current scandal involving the IRS in which the taxcollecting body applied heightened scrutiny in its auditing of conservative political groups.In the inspector-general’s report released this week, there were no findings that “pro-Israel” or “Jewish” were classifications specifically targeted for political purposes. No evidence has thus far been discovered that an organization such as Z Street would have been singled out because of its allegiance to Israel or because of specific Israeli government policies.Malcolm Hoenlein, the executive vice chairman of the Conference of Presidents of Major American Jewish Organizations, told The Jerusalem Post that he has neither seen nor heard of any evidence to the contrary, though he admits that, if a group represented by the conference were being audited, he might not be the first to know.The Politico piece cited only one source from the IRS whose comments indicated the possibility of a connection to the scandal: Jon Waddell, the manager of the Exempt Organizations Determinations Group at the IRS.“Israel is one of many Middle Eastern countries that have a ‘higher risk of terrorism,’” wrote Waddell concerning legal action from Z Street.“A referral to TAG [the Touch and Go Group, a unit in the IRS Cincinnati branch] is appropriate whenever an application mentions providing resources to organizations in a country with a higher risk of terrorism.”But a look at the IRS code on taxexemption procedures clarifies what Waddell means by “higher risk of terrorism.”Procedure requires Waddell and his team to take into account the activities of an organization that are deemed to put resources in danger; this includes activities or grants in foreign countries flagged by the State Department as having “trends” in terrorism. Those flags automatically prompt legal procedures, such as questioning through further paperwork.
