The story of IRS targeting of conservative groups that disagreed with Obama Administration policy isn’t over. On Friday the IRS lost another big battle, as the D.C. Circuit Court of Appeals ruled that a viewpoint discrimination lawsuit against the agency can proceed. Next stop, discovery.
The lawsuit began when the Pennsylvania-based pro-Israel group Z Street applied for tax-exempt status in 2009. When Z Street called to inquire about its application, it says an IRS agent said the agency had a policy that required Israel-related applications to get extra scrutiny in a special unit in Washington. Z Street sued in federal court but the IRS claimed the Anti-Injunction Act prevents suits meant to evade the collection of taxes and because the IRS was protected by the doctrine of sovereign immunity. The IRS lost in district court but appealed.