Judge to IRS Defense: “You Don’t Really Mean That, Right?”

In Z Street v. Koskinen, the IRS argued it should be able to discriminate for nine months before anyone is allowed to sue them. The absurdity of their argument literally made the judges gasp in disbelief.

The case involved Z Street, one of the organizations that experienced long delays for no other reason than its promotion of pro-Israel education. They applied for tax-exempt status in December 2009. When they hadn’t heard back in seven months, they called the IRS to ask about the holdup.

They were told “auditors had been instructed to give special attention to groups connected with Israel, and that [the agents] had sent some of those applications to a special IRS unit for additional review.” The IRS, of course, is not allowed to discriminate based on viewpoint when it approves or rejects tax exempt applications. So, Z Street sued.

The government, however, is fighting to keep the case from ever seeing an open court. They argued that Z Street’s case should be dismissed because the Anti-Injunction Act bars litigation about “the assessment or collection of tax.”

The three judges were incredulous. Judge Sentelle admonished government lawyer Teresa McLaughlin: “They are not in court seeking to restrain the assessment or collection of a tax, they are in court seeking a constitutionally fair process.”

But McLaughlin doubled down by arguing that Z Street’s case should be rejected because groups are not allowed to sue to receive tax-exempt status within 270 days of applying. (Though that’s not what Z Street is trying to do either, she reportedly made this argument with a straight face.) Apparently, the government would rather have Z Street wait two more months, while the IRS ignored their application. The defense’s brief even cited a previous case where judges had rejected the exact argument they were trying to make.

Judge Garland took McLaughlin to task:

“You don’t really mean that, right? Because the next couple words would be the IRS is free to discriminate on the basis of viewpoint, religion, race [for 270 days]. You don’t actually think that? Imagine the IRS announces today a policy that says as follows: No application by a Jewish group or an African-American group will be considered until one day short of the period under the statute . . . Is it your view that that cannot be challenged?”

No doubt McLaughlin was instructed to argue as she did. She must know these motions and appeals are legally indefensible, but are rather just a method to buy more time to avoid embarrassing the Obama administration.

But the transparent ploy didn’t work. Instead of dismissing the case, the panel of three judges summarily dismissed the government’s arguments and sent their lawyer slinking back to her bosses.

“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,” said Judge Garland.

No matter how long they try to delay discovery, the truth will come out. Though the mainstream media has long since lost interest in the tedious process of IRS investigation and lawsuits, it’s obvious that the government is getting desperate.

Hopefully soon, they – and the targeted organizations – get what they deserve: justice.