Daily Tax Update - June 19, 2015: Appeals Court Permits Z Street to Proceed With Viewpoint Discrimination Lawsuit Against IRS

Appeals Court Permits Z Street to Proceed With Viewpoint Discrimination Lawsuit Against IRS:  Today, the U.S. Court of Appeals for the District of Columbia Circuit ruled in Z Street v. Koskinen that Z Street, a pro-Israel group, can proceed with its lawsuit contesting the IRS’s process for determining the group’s tax-exempt status.  According to the opinion issued today, “Z Street alleges that the IRS has an ‘Israel Special Policy’ under which applications from organizations holding ‘political views inconsistent with those espoused by the Obama administration’ receive increased scrutin[y] that results in such applications ‘tak[ing] longer to process than those made by organizations without that characteristic.’” 

Z Street sued the IRS, alleging that the “Israel Special Policy” violates the First Amendment.  The IRS moved to dismiss, arguing that the action is barred by the Anti-Injunction Act, which prohibits suits to “restrain[] the assessment or collection of any tax.”  The Circuit Court affirmed the district court’s decision to deny the IRS’s motion, explaining that “Z Street was not seeking to restrain the ‘assessment or collection’ of a tax, but rather to prevent the IRS from delaying consideration of its application in violation of the First Amendment.” 

Miscellaneous Guidance:
Today, Treasury and the IRS issued proposed regulations (REG-102837-15) under section 529A that provide guidance on a new type of tax-favored savings program through which contributions may be made to the account of an eligible disabled individual to meet qualified disability expenses. 

Revenue Ruling 2015-15 provides various prescribed rates for federal income tax purposes for July 2015.