J Street Calls on Treasury Department to Review Tax Deductibility of Donations to Groups Entrenching Settlements

September 9, 2016


September 9, 2016

WASHINGTON—J Street called on its supporters and all who support a just Israeli-Palestinian peace agreement to urge the US Treasury to review the tax-deductibility status of contributions to groups working to entrench or expand Israeli settlement activity in the West Bank.

The United States has consistently opposed the construction and expansion of settlements under each and every president—Democratic and Republican—since Israel started building on territories captured in the 1967 war. A 1979  determination by the State Department’s legal adviser that Israeli settlements are illegal under international law has never been overturned.

Rarely a month passes without a new statement from the State Department deploring yet another Israeli decision to build new settlements, expand existing ones, expropriate more land for future building or retroactively legalize outposts beyond the footprints of existing settlements.

These statements of disapproval have done little to stem or even significantly slow the inexorable expansion of the Israeli presence in the occupied territory. By early 2015, the Jewish population living in West Bank settlements, excluding East Jerusalem, had reached around 373,000. By the time President Obama leaves office next January, it could exceed 400,000.

Additionally, a sophisticated private network has sprung up in the United States, funded by tax-deductible donations, that has channeled millions of dollars to strengthen the settlements and weaken the Palestinians’ presence in the West Bank. These dollars help fund organizations like Regavim, which presses for the demolition of Palestinian houses – and in some cases entire communities; Elad which works to transplant Jewish settlers into important Palestinian neighborhoods in East Jerusalem; and The Hebron Fund which funds the expansion of the heavily-armed Jewish enclave in the heart of Hebron, a city holy to both Jews and Muslims, at the expense of the local Palestinian population.

Internal Revenue Service requirements are clear about the criteria organizations must meet to benefit from tex-deductible, charitable donations: their activities must not be “illegal [or] contrary to a clearly defined and established public policy.”

“Opposition to Palestinian dispossession and settlement expansion has been clearly defined American policy for decades and the last legal opinion by the US government held the settlements to be illegal under international law.  That’s why we’re asking the Treasury Department to conduct a thorough review of the tax-deductible donations that are funding these efforts,” said J Street President Jeremy Ben-Ami.

“Clearly the United States has not effectively put real weight behind its opposition to Israeli settlements. It must do more to maintain the viability of a two-state solution. At the very least, it should not reward with a tax deduction those funding organizations whose activities could well be illegal and whose goals and activities are in direct opposition to long-standing, bipartisan US policy,” he added.

J Street is urging Americans to contact the US Treasury to urge a thorough review of organizations working to entrench and expand West Bank settlements to determine if such tax deductibility is permissible under current requirements. It is backing this up with educational activities including background papers and briefings. We invite like-minded groups and all who care about preserving Israel’s Jewish and democratic character through a two-state solution to join in this effort.