17. THE IRS CENSORS MOTHER JONES

Mother Jones, the muckraking magazine that exposed the Ford Pinto fire hazard and brought attention to Nestle's role in the international marketing of baby formula, may go out of business if the Internal Revenue Service (IRS) has its way.

The trouble started in March 1980 with a routine audit of the Foundation for National Progress, a nonprofit organization that publishes Mother Jones. According to publisher Robin Wolaner, the IRS initially challenged the foundation's tax exempt status but then reversed itself and went after the magazine. In August, 1982, it finally issued its ruling -- that Mother Jones was essentially "unrelated" to the purposes of the foundation and is therefore not eligible for nonprofit status.

Wolaner is convinced the IRS ruling was politically motivated (a tactic used during the Nixon administration) because she can think of no other explanation. Arguing that the "facts and circumstances" of Mother Jones' status are virtually identical to those of such magazines as Harper's, MS., National Geographic, Natural History, and Science '82 -- none of whose nonprofit standings has been challenged -- she asks: "Why us but not them?"

Executive editor Deirdre-English, in a letter to subscribers, provided a partial answer: "Mother Jones publishes articles that the government and its friends don t like. In the best tradition of muckraking, we uncover embarrassing, corrupt, sometimes immoral and oftentimes downright illegal activities that those in power have pursued -- and would like to keep secret. That kind of work doesn't make you friends in high places."

Nor does it attract advertisers. The percentage of revenues Mother Jones earns through advertising is one of the lowest in the industry -- about 11 percent as compared to a more typical 50 percent.

The magazine's low advertising revenue is partly due to boycotts -- the tobacco industry withdrew ads totaling more than $100,000 per year after the magazine ran a cover story on the effects of smoking -- and partly due to the rejection of ads deemed sexist or otherwise offensive.

While Wolner said she is confident the magazine will win in a court challenge of the ruling, she said that if it were to lose, "I think we'd have to stop publishing."

Editor English agrees that an IRS win would put "us out of business" and adds "They call it an audit -- we call it censorship."

SOURCES: Boston Globe, 11/21/82, "Mother Jones Prepares to Battle Suit by IRS," by Michael Dorgan; Mother Jones subscriber letter, 11/4/82, by Deirdre English.