A Taxing Situation p. 16

By: Debra Gersh Hernandez Some 350 news organizations may have received bills from the
IRS for unpaid excise taxes due from travel with the president sp.

AS MANY AS 350 news organizations may have received bills from the Internal Revenue Service for unpaid excise taxes due from travel with the president.
"It did come out of the blue," explained White House Correspondents Association president Ken Walsh of U.S. News & World Report. "In the last several days, news organizations have been getting what the IRS calls a statement of proposed adjustments for the excise tax on travel with the president."
The amounts due range from $9,000 to $72,000 for the Associated Press and cover the period from Jan. 1, 1991 through June 30, 1994, he said.
Walsh said as far as he knows the tax ? which the AP reported is 10% of the cost for domestic travel and $6 per person for international flights ? is for travel on the press charter aircraft. Whether the press pool and other passengers traveling on Air Force One also are covered is another question.
"There are a number of problems," he said. "The IRS has some explaining to do as to why these bills have been issued now," he said.
"Why was this period of time chosen? Why were the taxes not collected at the time? We thought we were paying at the time. This idea that there are past taxes due comes as news to people in the press corps."
Walsh pointed out that the cost of presidential travel has gone up substantially.
He said the larger news organizations "can pay, if we owe it, but some news organizations will be priced out of the market. It's in everyone's interest to have as many news organizations with different perspectives covering the president."
Walsh noted that "a lot of news organizations are very distressed by this. It is a constant problem we've had for years. The smaller organizations are concerned about not being able to afford travel with the president."
For recent trips, he said, the travel office has specified excise tax as a separate cost.
"The widespread perception within the press corps has been whatever was due we were paying," Walsh said. "We were getting billed and we were paying bills. Now we're told that excise tax was not being included. We always thought we were paying the full cost," Walsh said.
When asked whether this could be a result of the reporting on "Travelgate" and the troubles in the White House travel office, Walsh said it "is a natural question [to ask] how much is connected to that and is it ramifications from that. I don't want to point any fingers without any answers. I just don't know."
Compounding the problem, Walsh added, is that when the correspondents association contacted the IRS, it was told that the matter is confidential and only will be discussed with the appropriate corporate officer from each news organization.
"I feel like the association at this point can only play a fact-finding role," Walsh said. "The IRS is not helping getting those questions answered. Each news organization has to take care of it."
Henry Holmes, an IRS spokesman in Washington, said he could not comment on the case because the issue is covered under federal disclosure statutes that preclude the IRS from discussing the tax issues of tax payers.
When asked why the news organizations were liable for the tax rather than the White House or the airline charter, Holmes said he did not think he could discuss that without it being tantamount to discussing the issue, but he did say that payers of excise tax can be liable for paying those taxes.
An AP story quoted White House travel office director Steve Riewerts as saying, "We're looking into this. We're in contact with the IRS and trying to figure out what happened."