Nonprofit news orgs wait months longer than usual for IRS approval

The Chronicle of Philanthropy
New Orleans-based nonprofit news site The Lens has been waiting more than a year while the IRS reviews its tax status; SF Public Press has been waiting even longer. The Investigative News Network, which represents 60 nonprofit news sites, has been waiting about 15 months for its tax-exempt status to be approved, says Brant Houston, who chairs INN’s board. Houston “says he fears the delays could slow down a journalism movement that is ‘supplying some of the best investigative work and public service work in the U.S.’ ”

The nonprofit news sites are all being reviewed together by the IRS, they say, so the treatment is consistent.

Steve Beatty, managing editor of the Lens, says the tax agency told his group it was giving the applications extra scrutiny because of their “precedential” nature—that is, they will lead to guidelines that would apply to similar organizations.

“We’re a new creature appearing before the IRS,” he says. “They’re trying to determine how to handle other nonprofit newsrooms that come before them.”

Until they are approved as charity organizations, they cannot accept grants or tax-deductible donations directly. Approval times range from 7-8 weeks for routine applications to 9-12 months for more complex ones, a Maryland nonprofit tax lawyer told the Chronicle. However, precedent-setting applications like these can take longer.

The Knight Foundation has granted $200,000 to the Council on Foundations “to study whether tax laws and rules should be changed to stimulate nonprofit news media and make it easier for them to attract philanthropy.”

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