Often before non-profit news sites start their path to sustainability, they depend on IRS determination letter to confirm their tax-exemption status. 

A new guide is intended to help journalism and non-profit news orgs better understand the IRS’ standards when it comes to determining whether they are eligible for tax-exemption status.

With more journalism-oriented non-profit sites applying for tax-exempt status, there has been confusion as to how the IRS reviews these applications and makes decisions. Tax-exempt status is often critical to the start-up capacity and long-term sustainability of many of these sites.

The guide to the Internet Revenue Decision-Making Process seeks to simplify the process and answer questions that journalism and publishing non-profit organizations may have.

The Digital Media Law Project released it as an interactive Internet-based resource as well as a PDF.

Jeff Hermes, the project’s director said:

“Over the past several months, the Digital Media Law Project has become aware of a pattern of delays at the IRS in decisions on the tax status of news-oriented non-profits. After speaking with some of the affected non-profits and reviewing the applicable law, we determined that there was a gap in understanding of the IRS decision-making process. We have attempted to close that gap with the Guide.”

Hermes also blogged more in-depth about why the center decided to prepare the resource.

According to Hermes, the lack of clarity around the IRS rules has lead to tax-exempt status being delayed or denied for non-profit news sites; the Investigative News Network says that a growing number of journalism non-profits found themselves waiting for a year, eighteen months or in some cases, up to two years waiting for the IRS’s determination. The Digital Media Law Project also says some critics accuse the IRS of acting arbitrarily in its decision-making process, which has an adverse affect on the journalism industry.

The Digital Media Law Project is hosted at Harvard University’s Berkman Center for Internet & Society. Its mission is to resolve emerging and outstanding problems revealed by recent social and technological change.

The project is supported by Knight Foundation, the Open Society Foundations, the Harnisch Foundation and the Philip L. Graham Fund.