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IRS Commissioner, Doug Shulman, Confronted Over US Donations to Illegal Israeli Settlements in Palestine

By  IRmep Director Grant F. Smith, January 17, 2010


On January 11, 2010, IRmep research director Grant F. Smith confronted IRS Commissioner Doug Shulman on National Public Radio about the US Treasury Department's total failure to crack down on American charities laundering funds into illegal West Bank settlements.  Subsequent callers continued to keep the issue alive until Shulman finally publicly committed to balanced IRS enforcement.
Audio File:
News Release:
Israel Lobby Archive:

Partial Transcript - WAMU/NPR Radio

Susan Paige, USA Today:  Welcome back, I'm Susan Paige of USA Today sitting in for Diane Rehm.  We're talking with Doug Shulman.  He's the Commissioner of the IRS--the 47th Commissioner of the IRS--the IRS collects $2.4 trillion dollars in tax revenue every year.  It has 100,000 employees.
Grant F. Smith, IRmep:  I'd really like to take issue with this idea that IRS goes after powerful violators.  In 2005 USA Today quoted vice premier Shimon Peres estimating $50 billion had been raised since 1977--in the US--and used to build illegal settlements in Israeli occupied West Bank territories.  And many US charities like the One Israel Fund, American Friends of [the College of] Judea and Samaria, Christian Friends of Israel and even Jack Abramoff openly and illegally raise tax deductible funds in the US for illegal settlements.  But while fellow Treasury officials like Stewart Levey and other political appointees supported by AIPAC [the American Israel Public Affairs Committee] aggressively go after many Muslim charities suspected of any criminal ties, none of these charities have ever lost a tax exemption and the IRS just doesn't go after any of these violators in spite of Obama administration policy against settlements.
Susan Paige: Alright Grant, thank you for your call.  What about Grant's question in terms of 'does the IRS go after charities that get tax deductible contributions if their actions violate US policy?
Doug Shulman, IRS: One of the interesting things about the agency, Susan, is that we actually reach into every nook and cranny of the country, so we focus on individuals, serving them and have an enforcement program, and have an enforcement program servicing business.  We also have a tax exempt and government entities section of the IRS that focuses on charities and other nonprofits.  They get the benefit of tax exemption, making sure that they're complying with the tax rules.  We've, over the last ten years, beefed up that area, focused on everything from small nonprofits, international charities, hospitals, as well as education institutions, and we run a pretty robust program to make sure people are complying with the tax laws.
Susan Paige, USA Today:  Grant said that Muslim charities have been subjected to special scrutiny, is that the case?
Doug Shulman, IRS: Oh, I don't believe so.  We are very focused on running a nonpartisan, nonpolitical agency.  There are only two people who are political appointments in the IRS, myself and our chief counsel.  The rest of the 100,000 you mentioned are career civil servants, all of us are tasked with administering the laws that are on the books in an even handed manner, and I think our track record shows that's what we do.
Susan Paige, USA Today: Now we've also had a caller, Basim from Cincinnati saying that I failed to get an answer to Grant's question about if a charity that accepts tax deductible contributions--is doing something that's illegal--do you go after them?  The point that Grant was making was charities that may fund West Bank settlements.  What is the case with that?  Is that illegal, and would you go after a charity that was helping to fund that activity?
Doug Shulman: I don't know the specifics of the case that they brought up.  But if I wasn't clear, if a charity is breaking the tax law, is engaged in activities that they are not supposed to be engaged in, we certainly will go after them. Every year we pull 501(c)(3) charity status from a number of charities. We've got thousands of audits going on regarding charities, and so we don't hesitate to administer the tax laws and make sure that people are following the rules."


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