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IRS Is Taking Close Look at Tax Status for Nonprofit News Groups

November 21, 2011, 10:05 am

The proliferation of nonprofit newsrooms could be slowed by the Internal Revenue Service, which is delaying decisions on whether such organizations qualify for tax-exempt status, writes the Columbia Journalism Review.

Groups that applied a year ago or more are still awaiting decisions, adding to the challenges they face as startups, according to the magazine.

The federal tax agency is increasingly considering applications from journalism organizations collectively as “precedential” and studying their nonprofit bids. Journalism is not listed in the 501(c)(3) statute as a tax-exempt activity, and the IRS has historically considered it to be a commercial enterprise.

Marcus Owens, an attorney who formerly headed the IRS division that deals with nonprofits, said the rapid growth of nonprofit journalism in 2008 and 2009 caught the attention of the agency, prompting it to group applications together for study at its Washington headquarters.

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