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Why Revoking Tax Exemptions for Groups Supporting Jewish Communities in the West Bank Is Unconstitutional
(Tablet) Eugene Kontorovich - There is a campaign to eliminate U.S. tax exemptions for charitable groups that provide support to Jewish communities in the West Bank. It claims that private Americans' support for settlements contravenes "established public policy," and seeks to deny tax exemptions to some non-profits because they disagree with the president on diplomatic matters. While U.S. Treasury regulations restrict the tax-exempt status of groups that act "contrary to clearly defined and established public policy," according to the IRS itself, the public policy exception applies only in the context of racial discrimination. Moreover, anti-Israel groups that endorse boycotts of Israel also take a position that directly contradicts the clear U.S. policy of opposing BDS, and thus could also be affected. There is no U.S. law or clearly established U.S. policy which indicates that settlements are illegal, notwithstanding a Carter Administration-era letter claiming Israeli settlements are "inconsistent with international law." Moreover, there is nothing in the Carter-era State Dept. letter that claims that charitable contributions by Americans to settlements violate the law. A State Department memo is not a law and does not bind the U.S. No official has ever mistaken the memo for a legal enactment; indeed, two years after the 1979 letter, President Reagan announced that settlements are lawful. Meanwhile, Congress has passed numerous laws that clearly show Israeli settlements are not illegal. The writer is a professor at Northwestern University School of Law.