WSJ ‐ The first IRS viewpoint discrimination case to be filed, Z Street v. IRS, has been settled, with disturbing revelations about how the Internal Revenue Service treated pro-Israel organizations applying for tax-exempt status.

I founded Z Street in 2009 to educate Americans about the Middle East and Israel’s defense against terror. We applied for tax-exempt status under Section 501(c)(3) of the tax code in December 2009‐a process that usually takes three to six months.

Instead, the application languished. In late July 2010, an IRS agent truthfully responded to our lawyer’s query about why processing was taking so long: Z Street’s application was getting special scrutiny, the agent said, because it was related to Israel. Some applications for tax-exempt status were being sent to a special office in Washington for review of whether the applicants’ policy positions conflicted with those of the Obama administration.

So in August 2010 we sued the IRS for violating Z Street’s constitutional rights, including the First Amendment right to be free from viewpoint discrimination‐government treatment that differs depending on one’s political position.

Now we know the truth, and it’s exactly as bad as we thought. IRS documents‐those they didn’t "lose" or otherwise fail to produce‐reveal the following:

• Our application was flagged because Z Street’s mission related to Israel, a country with terrorism. Therefore, an IRS manager in our case said in sworn testimony, the IRS needed to investigate whether Z Street was funding terror.

• Some applications for tax-exempt status were indeed being sent to IRS headquarters in Washington for more intense scrutiny. They were selected because of the applicants’ viewpoint.

• In August 2010, three other Jewish organizations applying for tax-exempt status were asked by the IRS to "explain their religious beliefs about the Land of Israel."