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Israeli Activist Group Targeting U.S. Charities for ‘Illegal’ Fundraising
by Kristen A. Parillo
Reprinted from Worldwide Tax Daily, Sept. 21 2009

An Israeli peace activist group plans to pressure the
U.S. government to revoke the tax-exempt status of
U.S. charities that solicit funds for the development of
illegal Jewish settlements and outposts in the West
Bank, the group’s spokesperson told Tax Analysts September
18.

Gush Shalom, an organization that advocates for
Israel’s withdrawal from the occupied territories, is collecting
information on U.S. tax-exempt groups whose
fundraising on behalf of Israeli settlements violates
Internal Revenue Code section 501(c)(3) rules governing
charitable organizations, spokesman Adam Keller
said in a phone interview. Gush Shalom is coordinating
the information gathering process with other U.S.
human rights and political activist groups, he said.
Once the information is collected, Gush Shalom will
send its findings to the IRS and ask the government to
revoke the organizations’ tax-exempt status, Keller said.
The group does not yet have an exact time frame for
contacting the IRS. ‘‘When we’ve finished collecting
the information, we will decide the best course of action,’’
Keller said, adding that the group is working
with people who understand U.S. tax laws and can
help develop the best arguments for revoking the organizations’
tax-exempt status.

Keller said the group can show a discrepancy between
the U.S. charities’ statement of purpose given to
the IRS and the charities’ fundraising activities to help
expand West Bank settlement activity. The U.N. and
other major international bodies consider settlements to
be a violation of international law, though Israel disagrees.

‘‘These charities tell the IRS they’re involved in humanitarian
and nonpolitical work and that donations
are used to build schools and libraries in West Bank
settlements,’’ Keller said. ‘‘But they tell their supporters
that they’re raising funds to extend the Jewish hold
over a particular area and are reducing the Arab presence
— this is clearly political work, which is not allowed
under the U.S. tax-exempt rules.’’

Keller said there is a paradox at play. ‘‘The U.S.
government — particularly under President Obama —
has said it is very strongly opposed to settlements and
sees them as an obstacle to peace talks,’’ he said. ‘‘At
the same time, the U.S. government is in a sense funding
the settlements.’’ The tax revenue being forgone by
the U.S. Treasury because of the charities’ tax-exempt
status is going to the settlements the U.S. government
claims to oppose, he added.

Keller declined to name any of the U.S. charities
being targeted, saying he doesn’t want to give them
any advance warning. ‘‘We’re looking at between 10
and 20 groups and are working on finding out more,’’
he said.

A July 30 report in The Jerusalem Post, however, identified
one of the charities being targeted by Gush Shalom
as Shuva Israel, a section 501(c)(3) organization
registered in Austin, Texas, that solicits funds for a
long list of West Bank settlements and illegal outposts,
including Havat Gilad and Havat Ya’ir.

David Halevy, head of Shuva Israel, told The Jerusalem
Post that Gush Shalom’s planned campaign ‘‘is incredibly
outrageous.’’ He added: ‘‘They have the gall to
do this after receiving so many millions of dollars from
foreign governments supporting left-wing organizations
that influence activity in Israel.’’

Halevy said the money collected is used to subsidize
schools, libraries, youth centers, women’s empowerment
training, and other projects in the settlements and
outposts.

♦ Kristen A. Parillo is a legal reporter with Tax Notes International.
E-mail: kparillo@tax.org
WORLDWIDE TAX DAILY
Reprinted from Worldwide Tax Daily as: 2009 WTD 180-10
(C) Tax Analysts 2009. All rights reserved. Tax Analysts does not claim copyright in any public domain or third party content.



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