Z Street And The Mystery Of The Missing IRS Emails

Those questions lie at the heart of a grueling string of congressional inquiries aimed at ex-IRS official Lois Lerner and her co-workers and superiors. 

 

Lerner was the head of the Tax Exemption Division at the time of the computer crash. Among the vast number of lost emails are documents many believe would show who initiated the IRS policy – which the agency has since admitted to and apologized for – of targeting Tea Party and other conservative groups politically at odds with the Obama Administration.

 

One of these groups is the ardently pro-Israel Z Street that believes Israel should not be forced into appeasing terrorists under the mantra of “making sacrifices for peace.” The group strongly opposes a “peace process” that demands that Israel weaken itself with one-sided concessions guaranteed to undermine its security.

 

The peace process, the organization notes in its literature, has morphed into code words for “creation of a Palestinian state” – which Z Street believes will only bring more violence and instability to the region under the present Palestinian leadership.

 

Unbeknownst to Z Street at the time of its application for tax exempt status, these unpopular views got it flagged for “special scrutiny” at the IRS.

 

The application was rerouted to a special government-created category called “Occupied Territory Advocacy” – a fact that came to light only years later, in May 2014, when the IRS’s harassment of conservative groups in general became public knowledge.   

 

A WEAPON TO STIFLE DISSENT?

 

Z Street’s president, Lori Lowenthal Marcus, says the disclosure about a specially created category for “Occupied Territory Advocacy” is an ominous indication of the extent to which the IRS was being used as a political weapon to stifle dissent under the Obama Administration.

 

 â€œHow is it possible that such a purely political and ideological category was created by the IRS?” she asks in an interview on FOX News. “It has nothing to do with anything that is in the mandate of the IRS.”

 

Although the existence of this special category was not yet known in 2010, what Z Street did discover at the time from an IRS agent was troubling enough.

 

“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,” Agent Diane Gentry reportedly told Z-Street’s counsel when questioned about what was holding up its application.  

 

Those words raised a red flag for Marcus, an attorney with expertise in First Amendment law, who said she knew immediately the IRS position was legally wrong.

 

“Our board met and discussed all the angles,” she related in an interview with Yated. “Despite the dangers of taking on the IRS and the herculean odds against winning, we decided to file a lawsuit.”

 

Z Street sued the government, arguing that its constitutional rights had been violated by the open display of “viewpoint discrimination.” That was in 2010, almost four years before mounting complaints of IRS harassment and sidelining of conservative non-profit groups began to capture headlines. 

 

Even after congress opened an investigation into alleged abuses of power by the federal agency and discovered the allegations were founded, few grasped to what extent the IRS had been politicized. “Even for those who did realize it, the IRS is one scary place,” Marcus told Yated. “No other pro-Israel or mainstream Jewish organization gave Z Street their support.”

 

In an almost comical twist to this David-Goliath scenario, the IRS in court filings responding to the lawsuit claimed that Z Street has been treated differently because of concerns that it might be “funding terrorism.”

 

“It’s completely absurd – Z Street wasn’t funding anyone, anywhere for anything. To suggest these were concerns based on our application and the information on our website is astounding. There is no way to make this claim with a straight face, and yet this is what they did,” Marcus said.

 

IRS: YOU CAN’T SUE THE GOVERNMENT 

 

The Department of Justice fought the lawsuit, demanding the case be thrown out on grounds that the IRS enjoys immunity from lawsuits. The IRS also sought to recast Z Street’s constitutional complaint as a tactic to win tax exemption status. 

 

In a decision that stunned Washington – lawsuits against the IRS are almost always thrown out – Judge Ketanje Jackson, an Obama appointee, rejected the government’s arguments and cleared the way for the lawsuit to move ahead to the discovery phase.

 

Jackson upbraided government lawyers for “trying to thwart Z Street’s case” by pretending it was over tax exemption, when in reality it was about being subjected to a discriminatory, overzealous process of review from the IRS.  

 

“The IRS’s first legal countermove was, “You can’t sue us, we’re the government!” Marcus told Yated. “That’s the very foundation of the Bill of Rights, the right to hold the government accountable to the Constitution.”

 

As part of the discovery stage granted by Judge Jackson, Z Street can now subpoena IRS officials, place them under oath, and take depositions, asking detailed questions about how they acted and under whose direction. They can cross examine witnesses closely. They can also subpoena documents and require their production.

 

Z STREET LAWSUIT PRECEDED COMPUTER CRASH

 

Experts note that the IRS computer crash, even if true, does not absolve the IRS from judicial inquiry into who or what was responsible for the destruction of potential evidence relevant to the Z Street lawsuit.

 

“What makes the Z-Street case unique and potentially damaging to the IRS is that its lawsuit was filed in August 2010, a year before the computer crash,” American Thinker notes. “That filing placed the IRS under legal obligation to preserve records.”

 

The Wall Street Journal explains that under the Federal Rules of Civil Procedure, “once the suit was filed the IRS was required to preserve all evidence relevant to the viewpoint-discrimination charge.”

 

“That means that no matter what dog ate Lois Lerner’s hard drive or what the IRS habit was of recycling the tapes used to back up its email records [in the process erasing the tapes’ original content], it had a legal duty not to destroy the evidence in ongoing litigation,” the article noted. 

 

The IRS was required to go even further, legal experts say. It was obligated to place what is known as a “litigation hold,” on all potential evidence. That requirement applied not only to all correspondence regarding Z Street, but also to documents related to the vetting of conservative groups whose applications for tax exemption were groundlessly delayed. 

 

“A failure to [place a litigation hold] and any resulting document loss amounts to what is called “willful spoliation,” or deliberate destruction of evidence,” the WSJ article said.

 

“The Z Street case may be what forces the IRS to pull aside its carefully constructed curtain and reveal how it made decisions regarding organizations deemed out of step with the current U.S. administration, Jerusalem Post notes.

 

The group has already made their first requests for documents and information from the IRS, Marcus told Yated. This will be followed by interrogatories, the taking of depositions and other inquiries, a process that play out over the coming months.

 

The drama, which is being closely watched by all parts of the political spectrum, may ultimately yield the missing pieces of the IRS puzzle that even the most relentless congressional committees have failed to date to unlock.