Report: IRS approach to nonprofit journalism needs to be modernized

The Internal Revenue Service’s ground rules on giving news organizations tax-exempt status need to be modernized, a new report found. The report from the Council on Foundations (COF) found that local news media groups seeking to become tax-exempt have faced delays and even rejections in recent years, something the study says could stifle local coverage of important issues.

According to the new analysis, the IRS’s approach to distinguishing between for-profit and nonprofit media groups has not kept up with the changes in technology and how news is distributed or consumed. The report says, for instance, that nonprofit media groups must distribute their content in a way that is different from “ordinary commercial publishing practices.” The problem with this approach, the Council on Foundations said, is that “the distribution methods for all forms of media, whether for profit or nonprofit – newspapers, magazines, television, radio, charitable and private — have converged and may be identical.”