SACRAMENTO, Calif. — After nearly a year of what was characterized by an Internal Revenue Service field agent as a “political” audit, WorldNetDaily’s parent company, the Western Journalism Center, has been granted an extension of its tax-exempt status as a 501(c)3 charitable organization.
“Our recent examination … disclosed that your organization continues to qualify for exemption from Federal income tax,” IRS Los Angeles District Director Steven Jensen wrote in a letter dated June 10. “Accordingly, the return is accepted as filed.”
The California-based center sponsors independent investigative reporting, journalism training and other educational programs — including WorldNetDaily, a one-stop-shopping place on the World Wide Web for news and other information services.
The Western Journalism Center is one of at least 20 non-profit organizations which were targeted for IRS audit after an adversarial relationship with the Clinton administration. As early as 1994, a memo written by White House associate counsel Jane Sherburne recorded concerns about WJC’s work exposing Clinton administration scandals. Later, in 1995, WJC was a focal point of the White House’s 331-page “Communication Stream of Conspiracy Commerce” report, which alleged the center was at the source of a “media food chain” disseminating Whitewater-related revelations. In 1996, the IRS launched what WJC Executive Director Joseph Farah calls “a highly intrusive audit.”
In two early meetings with the center, IRS field agent Thomas Cederquist said the WJC audit was “a political case and would be decided at the national level.” He cited a “60 Minutes” program critical of the center and its investigative reporter Christopher Ruddy as a reason for IRS attention to WJC activities. In the report, CBS’ Mike Wallace alleged Ruddy made errors in his reporting on the mysterious death of White House deputy counsel Vincent Foster Jr. (The controversy is the subject of a new video documentary titled “The ’60 Minutes’ Deception,” available for $25 by calling 1-800-WJC-5595.)
Cederquist is now the subject of an IRS internal security investigation, and Congress’ Joint Committee on Taxation is investigating the agency’s handling of the WJC case and other allegedly political audits. IRS Commissioner Margaret Milner Richardson announced her resignation three months after Farah broke the story of the pattern of political audits in the Wall Street Journal.
“Receiving this notice from the IRS is, indeed, a relief,” said Farah. “No one likes to be targeted for investigation by the federal government. I’m glad it’s over. But I still want to get to the bottom of this case: Why were we targeted? By whom? Who was involved? Using the IRS for political purposes is an impeachable offense. If Congress isn’t energized to perform its oversight role by an offense like this, then we no longer live in a nation ruled by law.”
Farah said he expects to be called before the Joint Committee on Taxation, which is scheduled to prepare a report on political abuse of the IRS by Sept. 30.
“I believe the Western Journalism Center represents the single most persuasive and compelling case study in political manipulation of the IRS,” said Farah. “And I believe the congressional staff members who have reviewed the case agree with me.”
The IRS audit of the WJC, involving two years of records, cost the center tens of thousands of dollars and hundreds of manhours, says Farah.
“In addition,” he says, “the audit had a chilling effect on our ability to raise funds from major donors.”
