- Dec 6, 2009
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As Israel's illegal settlement enterprise in the occupied West Bank continues to be a strain on US-Israel relations, an unflattering light is being shone on US private donations towards the development of the settlements that are increasingly encroaching on Palestinian land.
Most of the construction work in the settlements is in the hands of American, Canadian and European developers. Much of the money needed for settlement development comes from private American donations. It is estimated that tens of millions of dollars reach the settlements in the form of charity, contributions that by virtue of their philanthropic nature enjoy tax-exempt status under the US' Internal Revenue Code.
An examination by this writer of IRS documentation led to at least 32 organizations registered in the US as tax-exempt charities that support Jewish settlements in the West Bank including East Jerusalem with sizable financial contributions ("From New York to the West Bank: Following US Tax Dollars into Israel's Settlements"). The groups, mostly Jewish but also Christian-Zionist, often adopt a particular community of settlers and for the most part claim on their tax forms to be contributing to charitable or educational projects.
Since March 2009, the ADC has filed official complaints to the IRS -- accompanied by copious documentary evidence -- exposing what it claims are illicit practices by ten of these organizations. They now hope the IRS will audit the organizations in question.
"The law is pretty clear," Strauss said. "If these laws were applied honestly, these organizations would not have tax exemption."
According to IRS regulations, in order to obtain 501(c)(3) tax-exempt status, an organization must set forth "charitable, religious, or educational purposes," including "lessening neighborhood tensions, eliminating prejudice and discrimination, defending human and civil rights." The ADC argues settlements do just the opposite.
Furthermore, a charity "may not be an action organization," meaning it must not engage in "political activities." A 501(c)(3) can also be disqualified if it engages in propaganda or if it operates in ways that do not pertain to its stated purposes.
The ADC also maintains that some of these organizations may be guilty of fraud and misrepresentation when they claim they operate in Israel but in fact operate in the West Bank and when they state charitable purposes when they actually buy military equipment and train paramilitary organizations.
ei: Activists work to stop tax-exempt donations to Israeli settlements
Most of the construction work in the settlements is in the hands of American, Canadian and European developers. Much of the money needed for settlement development comes from private American donations. It is estimated that tens of millions of dollars reach the settlements in the form of charity, contributions that by virtue of their philanthropic nature enjoy tax-exempt status under the US' Internal Revenue Code.
An examination by this writer of IRS documentation led to at least 32 organizations registered in the US as tax-exempt charities that support Jewish settlements in the West Bank including East Jerusalem with sizable financial contributions ("From New York to the West Bank: Following US Tax Dollars into Israel's Settlements"). The groups, mostly Jewish but also Christian-Zionist, often adopt a particular community of settlers and for the most part claim on their tax forms to be contributing to charitable or educational projects.
Since March 2009, the ADC has filed official complaints to the IRS -- accompanied by copious documentary evidence -- exposing what it claims are illicit practices by ten of these organizations. They now hope the IRS will audit the organizations in question.
"The law is pretty clear," Strauss said. "If these laws were applied honestly, these organizations would not have tax exemption."
According to IRS regulations, in order to obtain 501(c)(3) tax-exempt status, an organization must set forth "charitable, religious, or educational purposes," including "lessening neighborhood tensions, eliminating prejudice and discrimination, defending human and civil rights." The ADC argues settlements do just the opposite.
Furthermore, a charity "may not be an action organization," meaning it must not engage in "political activities." A 501(c)(3) can also be disqualified if it engages in propaganda or if it operates in ways that do not pertain to its stated purposes.
The ADC also maintains that some of these organizations may be guilty of fraud and misrepresentation when they claim they operate in Israel but in fact operate in the West Bank and when they state charitable purposes when they actually buy military equipment and train paramilitary organizations.
ei: Activists work to stop tax-exempt donations to Israeli settlements
