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A pro-Israel activist group filed a lawsuit alleging that its application for U.S. tax-exempt status is being unduly scrutinized.

Z Street, a right-wing group intended to counterbalance left-wing J Street, said in its lawsuit that the Internal Revenue Service delayed and may deny its application for tax-exempt status because the organization opposes the Obama administration’s policy on Israel.

The complaint alleges that IRS agent Diane Gentry said applications from organizations dealing with Israel-related issues “are being sent to a special unit in the D.C. office to determine whether the organization’s activities contradict the administration’s public policies.”

Laura Rozen noted in her blog at Politico that the IRS may have been trying to determine whether Z Street was an educational organization, which is a requirement for tax exemption.

“Furthermore Agent Gentry advised Z Street’s counsel that she questioned whether Z Street’s activities were educational as described under Section 501(c)(3) of the Code, but instead might be lobbying,” the lawsuit states, “or that Z Street might be an ‘action organization,’ which is the case when the only way to accomplish the purpose of the organization is through legislation.” — jta