They say nothing is certain except death and taxes. Last weekend, those two things went hand in hand when the Chicago News Cooperative — a major nonprofit journalism organization — was forced to suspend operations, thanks in part to the IRS.

As we have been tracking for the past few months, the IRS is debating whether journalism organizations should qualify for nonprofit status. It is an odd moment for this debate given that nonprofit journalism has been a part of the American media landscape for decades. However, as the commercial advertising-driven model for news has faltered in recent years, there has been a flood of interest in journalism rooted in a business model that puts public service over profit. This spike in nonprofit applications from journalists raised red flags at the IRS, which has had a long and contradictory history when it comes to weighing the status of news and media organizations.

Now that history is starting to catch up with us. This past weekend the Chicago News Cooperative (CNC) said that it would fold its operations, at least temporarily.

News reports about CNC highlight a wide array of problems plaguing the organization, from its online strategy to its business model. While the IRS delay in approving its nonprofit status was just one factor in this decision, the announcement made clear how high the stakes are in this debate.

Meanwhile, other journalists have been waiting for as much as two years for the IRS to act on their own applications for nonprofit status and they’ve discussed the damage this delay has caused. This could be a golden age for noncommercial and community media, but the IRS’ inaction threatens to squander this momentum.

Last year the Columbia Journalism Review reported on the San Francisco Public Press, an organization that takes no ads, is run by volunteers and covers only critical local issues. “A lot of funders see you in a very different light if you have not passed that milestone of becoming your own independent organization,” the organization’s executive director, Michael Stoll, told CJR. “ … I suspect we’re going to lose a lot of money because of this.”

CJR summed up the problem well:

“Because the press isn’t specifically named in the 501(c)(3) statute, nonprofit news organizations have banked on the IRS considering journalism an educational activity, which is one of the tax-exempt activities specified. But the agency has historically taken a somewhat narrow view of what is educational … and it doesn’t apply to as much journalism as you might think.”

If public service journalism doesn’t qualify for nonprofit status, what message is the IRS sending?

Many of the challenges facing traditional journalism organizations have their roots in a commercial media model that prioritizes profit over all else. Media consolidation led to debt-laden media giants that have proven more interested in returning profits to shareholders than in investing in adapting to the Internet and the changing habits of consumers. Rather than fund costly investigative journalism and time-intensive beat reporting, media executives have too often opted to run cheap celebrity gossip or generic wire stories. We’ve seen the closing of bureaus in state capitals, Washington, D.C., and internationally, and more than 30,000 journalists have lost their jobs in the last four years. 

Now some of those journalists, and a new generation of entrepreneurs, are trying to set up nonprofit news organizations to reclaim journalism’s public service mission. Media policy should be helping us meet the information needs of our nation, not standing in the way.

The good news is that this is a structural policy problem, and one we can solve. In the short term we need to make sure the IRS knows that we demand and depend on noncommercial media in America. In the long term, we need to work with Congress to ensure that nonprofit journalism is clearly protected in our tax code. Stay tuned here at Free Press and SaveTheNews.org to find out how you can help.