Editorial: Today’s Scandal With Jews & The IRS Has Direct Impact On Continuation Of Non-Profits In Israel

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ywe1.jpgOver the past 2 years, many small non-profits in Israel – ranging from yeshivot to medical organizations – have fallen under scrutiny from the IRS. For the past 2 years, Israeli non-profits couldn’t understand the scrutiny. Today it became clear: No Jewish non-profit could be trusted to be legitimate.

While we can understand that the IRS wants to be cautious and certain, it has been absurd in its efforts to invalidate legitimate Jewish non-profits. For example, one major yeshiva in Jerusalem that serves American students was asked by the IRS why they don’t have a website for recruitment. Anyone in the Jewish community knows that major yeshivot (such as Mir, Ponevezh, etc.), particularly in the Haredi world, do not need and will not utilize a website for recruitment. But the IRS doesn’t understand that. And that challenges the credibility and legitimacy of the yeshivot. In another case (for which I have a copy of the letter), the IRS sent a letter to the American Friends of one small Israeli yeshiva demanding proof that none of its students are terrorists. How can we prove that none of them are terrorists? If they aren’t on the US Homeland Security list? Without proof, the IRS may not enable the yeshiva to maintain its tax deductible status. For 2 years, the IRS has been demanding copies of bank statements, questioning how checks get cashed and where the money goes, and demanding enormous time-consuming efforts by small, fully legitimate organizations in Israel that have an “American Friends” support organization in the US.

So what do today’s events mean for the future? All these small non-profits which have been fighting to keep their tax deductible status for the past year or 2 will have to work even harder to gain the confidence of the IRS. One that I know of already lost their tax deductible status without due cause. For example, by law the US non-profits are not required to keep minutes of board meetings. But every Jewish organization under scrutiny has been asked why they did not keep minutes. And why all the board members do not know exactly how every donation given is spent.

The actions of today essentially make every Jewish organization fall into question – is every non-profit set up to cover a money laundering scheme? While the general public may not think so, the IRS activity in the past 2 years definitely gives an impression that they harbor a doubt towards US non-profits that have Israeli affiliations. Organizations that help the poor and handicapped in Jerusalem will have to spend increased funds to have their accountants prove the legitimacy even more to the IRS. Sure, at the end of the day these organizations will pass the test. But they will have to spend much money and invest much time with accountants.

I’m not sure if all Jewish organizations with tax deductible status have been scrutinized over the past year, or just many that have Israel affiliations. I am personally aware of a number of cases, and I have worked with American accountants over the past 2 years who are familiar with many more.

With the fundraising efforts challenging enough in today’s economy, Israeli non-profits must be able to give tax-deductible receipts to their donors. Without IRS approval, US donations can completely dry up and shut down Israeli organizations. The IRS is re-evaluating their approval, and that can have a long-term impact on Israeli society.

Clearly, the fall-out from today is more than the bad press Jews will get on the heels of Madoff.

On behalf of many quality Jewish organizations in Israel that need the tax ID status from the U.S., please ensure that your coverage of the scandal today includes a message to the IRS that not every organization with Jewish or Israeli ties are conducting illegal activities!

(Chevy (Fleischman) Weiss – YWN)




17 COMMENTS

  1. The problem is that while the majority of Jewish organizations and people working within those organizations are honest, all it takes is one rotten apple to spoil the whole barrel. But what makes the situation even worse is when an organization becomes aware of the situation and instead of rectifying it, attempts to cover it up.

  2. The IRS asking about terrorists????? I suspect they are required to ask every school to make the ceritification – if they really suspected anything it wouldn’t be the IRS doing the asking.

    Not believing a school doesn’t use a website???? It’s amazing they believe Hareidim can use pens rather than quills.

    Suspecting us of sloppy bookkeeping, co-mingling, etc. I suspect that is what they are interested in. It doesn’t help that many frum institutions have “employees” whom are officially “students” (to avoid conscription), or are not legally in Israel (remember the US and Israel share tax data).

    For a corporate body, especially one relying on American tax money (i.e. roughly 25% of every donation is really US tax money via the deduction system), they need to keep accurate books. Accounting is much less of a skill than gemara, so what’s the challenge?

  3. oy vey, Hashem yerachem. be”H all the organizations that are truly working to help klal yisrael thru difficult times should have bracha v’hatzlacha and we should only hear besorot tovot!

  4. To support mosdos and Yeshivos one must make sure 100% that there is no Gezeila See Meforshim on Parshas Akeida when Avrohom Avinu made sure that the ram he found there did not belong to anyone.

    The whole future of Klal Yisroel depended on that Korbon which in esence was instead of Yitzchok. Every ioata had to be pure of Gezeila, so too in theChinuch and future of our children!

  5. if people are doing something wrong its wrong. No one likes a informant but if it brings down all wrong doers so be it. I have nothing to fear

  6. “something wrong” —we are talking about book-keeping and record keeping, not larceny

    There are plenty of books on “Accounting for dummies” – someone should translate one into Yiddish. Anyone capable of doing gemara can learn to fill out the IRS’s forms correctly.

  7. All those involved in the non-profit world have a CHIYUV to ensure that their organization is run in a way that removes any suspicion at all of Chillul HaShem. What is happening to am Yisroel? Where’s the light to the Nations? HaShem Yerachem!

  8. Hashem yerachem! The biggest Chilul hashem of the year, and all you seem to be worried about is the effect on Israeli yeshiva fund-raising?

    Maybe if mosdos Torah where more careful about where their money came from, there would be fewer such scandals! It’s too bad that they need govenment supervision to make sure they don’t take treif funds.

  9. WAKE UP, JEWS, AND SMELL THE COFFEE!

    Don’t you begin to see the pattern in all these recent “investigations” and “scandals?”

    Do you really think we Jews are the most corrupt and criminal element in American society.

    We are being attacked through a coordinated campaign to destroy our political influence and our financial strength.

    Take a look at the record:

    AIPAC INVESTIGATED–accused of “spying” for Israel. (charges later dropped recently)

    RUBASHKIN RAIDED– accused of “abusing” and employing illegal aliens. (Still pending)

    SYRIAN COMMUNITY RAIDED– Deal,New Jersey Rav and Rav Kassin arrested. This was a prime example of “State Terrorism,” in which an Agent Provocateur (Mr Dweck) was encouraged by the FBI to go around the Syrian community and entice them to accept money in an illegal manner to help their cash-strapped mosdos. This took place over a period of two years.

    The FBI “created” a crime, using a MOssur, and then arrested people for participating in their manufactured crime.

    I truly believe that peole very high up in the Government have worked-out a carefully-coordinated strategy to seriously weaken the Jewish community here, so that it will be incapable of coming to the aid of their brethren in Israel, who are being pressued to commit suicide by the machinations of the State Department and the E-U, in cooperation with the Arabs.

  10. Things like this will end only when we rid the Yeshiva Community of the plague known as gashmius.

    Our Rabbinical Leaders issue Takanahs forbidding large Chasunahs, then show up as Mesader Kiddushin at an affair with 800 guests.

    Etc. etc. etc.

  11. To Moshe Weiss, regarding Comment #14: Aside from the well-known issur of belittling Gedolai Torah, and aside from the very well-known issur of Loshon Hara, what you say is, to the best of my knowledge, a lie. In my experience, several Gedolim refused to even attend certain simchos because it went against the takanos they signed.

  12. To #13: Thats right, they ARE against us. Everyone is against us. So why do we keep doing things to allow them to get us. To use an old quote: When someone says to steal, JUST SAY NO! Why is that so hard? When someone says to rip off the government, JUST SAY NO! When someone says to lie on a program form, JUST SAY NO! Is that so hard?

  13. to: yeshiva11230

    A very admirable viewpoint, indeed. I congratulate you for your Tzidkus.

    However, in the real world, we all succumb, more or less, to our yetzer Hora, and a wise man does not intentionally seek NisYoNos, which challenge his resolve to be perfect.

    A Government which intentionally sends out a MoSur to seduce people into “sin” is involved in a despicable activity, taking advantage of human weakness among people who did not intend to do anything wrong before the Government sent someone to them.

    This is not why we have laws in this country. This is not what is meant by “Criminal” activity.

    I call this “State Terrorism,” and I stick y my description.

    (Note that when cops and firemen engage in a “Rulebook Slowdown,” this is considered a strike against the public, even though they are following the letter of the law.

    Thetrue meaning and spirit of the law also counts.

  14. #13 “deepthinker”:

    If you do truly believe that, then you have a few screws loose. You’re no more sane, and no more a “deep thinker” than the people who think that we never landed on the moon, or that GW Bush actually perpetrated 9/11…