-Caveat Lector-

Journalism group can't sue over 'politically motivated' audit


By DAVID KRAVETS
Associated Press Writer


SAN FRANCISCO (AP) -- A federal appeals court ruled Wednesday
that a nonprofit investigative journalism group cannot sue the
Internal Revenue Service over accusations that a business audit
was politically motivated.

The Western Journalism Center claimed that the White House
retaliated with an audit after the conservative group suggested
presidential lawyer Vincent Foster did not commit suicide, as
investigators found, but was murdered.

A three-judge panel of the 9th U.S. Circuit Court of Appeals said
the center should have filed the suit within a year after
learning of the IRS audit in 1996.

The IRS found no discrepancies and the journalism group, based in
the Sacramento suburb of Fair Oaks, claimed it was targeted as a
payback for its reporting.

Although the panel upheld a decision from a federal court in
Sacramento, it did so for different reasons. While the panel said
the group's suit was barred by the statute of limitations, a
lower court said the IRS could not be sued on allegations of
politically motivated auditing practices.

In a separate but concurring opinion, panelist Judge Stephen
Reinhardt said the IRS could be sued for such acts and noted that
the three-judge panel did not address the issue.

Under the argument IRS lawyers offered, "the government would be
insulated against liability for its attempt to suppress the type
of criticism that forms the very core of speech protected by the
First Amendment," Reinhardt wrote.

The judge's concurring opinion is not binding, however, and may
open the door to similar lawsuits in the nine western states the
circuit covers. Reinhardt noted that the Denver-based 10th U.S.
Circuit Court of Appeals has agreed with him.

"This should be a warning to the IRS: Don't go messing with
people because of their politics," said Larry Klayman, the
journalism center's attorney.

The IRS said fewer than 1 percent of the 6,000 to 10,000 audits
of tax-exempt groups each year originate with complaints from
lawmakers or the White House. The White House forwards about
1,300 constituent letters each year to the IRS, ranging from
complaints of wrongdoing to obscure tax questions.

The case is Western Journalism Center vs. Ceder Quist, 99-35377

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