How the IRS funds ethnic cleansing in Palestine
‘Settlement’ or suburb, you pay for it
If you’ve been paying attention to the 11 months slaughter in Gaza, you know the U.S. has sent Israel well over $40 billion worth of planes, bombs, guns, and ammunition since October 7, 2023. Another$20 billion worth of weapons have been approved by the White House and are awaiting delivery. You probably know those bombs fall on schools, hospitals, and tent cities, killing tens of thousands of innocent people.
But did you know your tax money also funds Israeli settlers in their violent expulsion of Palestinians from their homes and lands? While the arms transfer money mostly goes to US weapons manufacturers, our tax money indirectly funds many settler groups in Israel and the Israeli government itself, through tax-deductible 501(c)(3) nonprofit organizations.
Rich people donate to Israeli settlements on Palestinian land and take it off their taxes. The rest of us have to make up the shortfall in the US budget or go deeper into national debt. We are funding ethnic cleansing against our will.
How did Israel get this tax-exempt status, and what can we do about it?
What Tax-Deductible Means
United States tax codes are set up to encourage people donating to charities which do work that government would otherwise have to do themselves. When reporting one’s income to the internal Revenue Service (IRS,) one can often deduct donations to things like health providers, education, feeding hungry people, or environmental cleanup. The donor then reports lower income and so pays less tax.
To qualify for deductible status, the recipient must have a 501 c (3) designation from the IRS. Just being a nonprofit does not qualify an agency for 501 c (3) status. It has to perform actual charitable work. IRS has a long application process for 501 c (3), investigating whether an agency really does work that qualifies. A 501 c (3) agency can not engage in electoral politics in the US or other countries. It cannot support military functions anywhere, and it cannot provide money to those breaking United States or international law.
When Tax Deductions Go Wrong
Charitable services can be provided in other countries and still qualify for deductions. That’s how you can fund an earthquake relief agency in, say, Armenia through a US-based nonprofit and take it off your taxes. But the US based agency cannot just serve as a money pipeline to a foreign organization. They have to keep track of the expenses and verify that the money is being used for the stated purpose, one that is legal, non-political and non-military.
The problem is that foreign partners are treated very differently depending on what country they are in and whether they support US strategic goals. Groups doing agricultural aid in Gaza have been accused of supporting terrorism.
Photo by Dan Meyers on Unsplash Art work that unleashes our imagination — this suggests making the military, as symbolised by the image in of the soldier, accountable to a child.
The Israeli government routinely accuses academic and humanitarian groups of aiding terrorism, so that tax-deductible funding (or really any funding) of those groups becomes much more problematic. The US government has convicted American Muslim charities like the Holy Land Foundation of supporting terrorism (meaning Hamas,) by providing services in Gaza.
Israeli organizations, on the other hand, are never scrutinized in the same way.
The problem is that foreign partners are treated very differently depending on what country they are in and whether they support US strategic goals.
Donations for clearly illegal purposes like so-called ‘settlements’ (usually prefab subdivisions) in the West Bank, or funding armed settler or Israeli Defense Force divisions are not investigated. They get a pass, even when the settlers belong to groups on the terror watch list like Kahane Chai, named after the Brooklyn born terrorist Meir Kahane. This pattern has been documented in many corporate media reports over the years, but it continues, Palestinians suffer for it and Americans pay for it.
Who funds the settlements?
Both fundamentalist Christian Zionists and American Jewish Zionists send money to Israeli groups devoted to expelling Palestinians. A New York Times examination of public records in the United States and Israel identified at least 40 American groups that have collected more than $200 million in tax-deductible gifts for Jewish settlement in the West Bank and East Jerusalem over the last decade. The money goes mostly to schools, synagogues, recreation centers, legitimate expenditures under the tax law. But it has also paid for illegal paramilitary uses such as: guard dogs, bulletproof vests, rifle scopes and vehicles to secure outposts deep in occupied areas.
According to NBC News, tax breaks for the donations remain largely unchallenged. The settlements are largely illegal under US, international, and sometimes Israeli law, making their financial support ineligible for tax-exempt status, but these rules are consistently ignored. Christian Friends of Israeli Communities (CFoIC) is typical; they proclaim on their web site that they fully support illegal Israeli settlement in the heart of Palestine. They have tax exempt 501 © (3)status according to Pro Publica. CFoIC’s international president is Sondra Oster Baras, an American-born Jew now living in a settlement.
Religious groups have no obligation to divulge their finances, meaning settlements may be receiving sums that cannot be traced. Many times funds are deceptively donated for cultural or religious activities, which are legal, but actually go for paramilitary supplies and guns. One settler group, Kollel Ohel Tiferet, runs self-described “religious study group in Israel, for educational and athletic purposes” while in reality, using donated money to finance a paramilitary operation in the Beitar Illit settlement.
Jewish nonprofits funding illegal settlements include the Central Fund of Israel, the Jewish National Fund, which boasts an endowment over $340 million, the Jewish Federations of North America (JFNA), and many, many more, and probably an equally appalling number of Christian nonprofits doing similar work. Much of this has been researched by a New York group called Not On Our Dime.
Turning off the money taps
Tax deductible donations are good when they go to a good cause. But they also mobilize support for bad things, if the US government supports them. Donations to illegal Israeli settlements can still be written off donors’ taxes, because the US likes those settlements going up.
That is why in 2023, Zohran Mamdani , a 36 year old State Assemblyman from Queens, New York and State Senator Jabari Brisport introduced the Not on Our Dime Act, which would “clarify that funding Israeli settlement activity and any violations of the Geneva Conventions of 1949 and Rome Statute of the International Criminal Court by NY state charities is illegal. As such, it would prohibit NY-based organizations claiming non-profit status from abusing this status to reinforce and further Israeli war crimes.”
The bill (A6943A/ in the New York Assembly, S06992A in the Senate, “also allows the Attorney General to dissolve the nonprofit status of, and fine organizations that knowingly fund settler activity a sum no less than one million dollars. It explicitly empowers Palestinians who have been harmed by violence funded by these New York-based charities to file a lawsuit against them.”
Not On Our Dime didn’t get out of committee the first time. Mamdani re-introduced it in May 2024, with a few additional sponsors. It was recently backed by NY Congressional representative Alexandria-Cortez and a few other New York federal officials, but faces fierce opposition from Republicans and pro-Israel groups. One legislator called Not on Our Dime ‘an antisemitic attempt to control how Jews donate their money.’ The fact that donations to illegal settlements or a foreign military violate US and international law shouldn’t disqualify them apparently.
While Not on Our Dime faces tough sledding in the New York legislature, and has not even been attempted in other states, 501 c (3) status is an IRS decision, so the federal bureaucracy could stop these tax deductions without legislative approval.
Canada recently stripped Jewish National Fund-Canada of its tax-exempt status, because of their funding of agencies in Israel, provoking outrage from Israel defenders calling the decision ‘antisemitic.’
It took years of lobbying by pro-Palestinian and human rights activists, to get the Canada Revenue Agency (CRA) to act. The activists did not appear to be getting anywhere until this year, when the genocide in Gaza may have grabbed CRA’s attention. Of course, the Israel lobby is screaming antisemitism at the CRA, so I hope their decision holds up. Perhaps we can help.
Take Action! It’s Your Money.
Why do ordinary citizens’ taxes have to support ethnic cleansing and war crimes? Maybe we don’t have to. Passing laws at the state level to revoke the settlements’ tax-deductible status, like Assemblyman Mamdani is doing in New York seems the most hopeful plan.
● If you live in New York State, lobby your Assembly rep and your State Senator to co-sponsor Not On Our Dime. Learn more about it here. Let Rep. Mamdani’s office know. Find out if there are groups working on this near you.
● If you don’t live in New York, perhaps you can find legislators who might be interested in introducing such a bill in your state. Perhaps there are a few not controlled by the lobby. Contact one of the co-sponsoring organizations: Jewish Voice for Peace, the US Campaign for Palestinian Rights, the Adalah Justice Project, Democratic Socialists of America Antiwar Committee, or the Center for Constitutional Rights and see if they have any ideas where to start.
● It might be possible to pressure the Internal Revenue Service directly, like they did in Canada. If anyone has ideas how to lobby the IRS, I would like to hear about them in comments.
● Stop paying your taxes. You can file a 1040 form and just refuse to pay, or you could not file at all, Let everyone know what you are doing and why. When the tax exemptions for war crimes are lifted, you could resume paying.
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