Report: Pro-Israel Groups Scrutinized by IRS' Anti-Terrorism Unit

If you’re a pro-Israel group applying for tax-exempt status, prepare to have your application scrutinized by the Internal Revenue Service’s anti-terrorism unit, National Review Online’s Eliana Johnson reports, citing one of the agency's Cincinnati agents.

Gary Muthert during an interview with House Oversight Committee investigators said that Jewish and/or pro-Israel applications are considered “specialty cases” and that “probably” all are sent to the IRS’ internal anti-terrorism unit for further review.

“Muthert, who served as an application screener before transferring to the agency’s anti-terrorism unit, was interviewed in connection with the committee’s investigation into the IRS’s discrimination against conservative groups,” Johnson reports.

“As a screener, Muthert flagged tea-party applications and passed them along to specialists for further scrutiny,” she adds.

The Cincinnati-based agent was asked whether all pro-Israel applications went to the agency’s anti-terrorism unit.

“Probably,” he responded, “foreign activity, pro-Israel — if it is any type of foreign activity, it will go to the anti-terrorism area.”

As NRO and Muthert note, IRS screeners must consult with the Treasury Department office that enforces economic and trade sanctions and its terrorist list "because a lot of organizations will create charities to funnel the money to terrorist countries."

Muthert continued, adding that pro-Israel groups get “not so much additional scrutiny, just more procedures.”

“More review?” one investigator asked.

“Clearly, correct,” Muthert said.

“The policy that the applications of pro-Israel groups be examined by the IRS’s antiterrorism unit was instituted ‘probably years ago,’” Johnson reports, citing Muthert’s testimony.

“That testimony leaves unclear whether the news coverage in 2009 and 2010 prompted the scrutiny to which groups like Z Street say they have been subjected, or whether every nonprofit group whose application indicates it may engage in foreign activity, regardless of the country, is put under the microscope,” she adds.

Muthert, for his part, says all groups planning to engage with foreign countries are given extra scrutiny -- not just the pro-Israel ones.

“It has to do with money laundering and things, because a lot of organizations will create charities to funnel the money to terrorist countries,” he explained.

“So it is not so much Israel. It is just foreign countries."

Click here to read the full National Review Online report.

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