Feisal Abdul Rauf, the New York imam and State Department envoy who wants to build a controversial new mosque at Ground Zero, applied for – and received – tax-exempt status from the IRS in 1998 for another mosque about 10 blocks from the Ground Zero site, stating that he was already holding prayer services there for up to 500 daily worshippers.

But when the Investigative Project on Terrorism checked out the information Rauf provided to the government on his IRS 1023 form, they discovered that 201 W. 85th Street was a 17-story Manhattan apartment building with no public spaces large enough to accommodate 500 daily worshippers. And Apartment 10 E was a one-bedroom, 800-square-foot unit that would have trouble holding even 50.

In their 1998 tax filing, Rauf and his wife, Daisy Khan, former director of the American Sufi Muslim Association, said that they wanted to build "a large scale prayer center in New York City…The center will include a mosque (prayer place) where every Friday and daily large congregation prayers and meditation centers will be held." However, IPT says, "ASMA records don't indicate that the center was ever built."

Rauf and Khan also run the non-profit Cordoba Institute, which along with ASMA, owns the Ground Zero site, according to IPT investigators. The couple set up a "labyrinthine financial network surrounding the [Ground Zero mosque] project," leading to major concerns about who exactly is funding it.

A recent financial statement by ASMA reported donations from the United Nations Population Fund, the Dutch government, MDG3 Fund, the Hunt Alternatives Fund, Carnegie Corp., the Rockefeller Brothers Fund, and the Qatar government.