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October 20, 2009
CAMBRIDGE, MA. — A review of current law strongly suggests that, under present circumstances, a nonprofit newspaper could qualify for tax exemption without the need for legislation by Congress or new rulings by the IRS, according to an analysis commissioned by the Shorenstein Center on the Press, Politics and Public Policy.
The analysis was done by Marion R. Fremont-Smith, one of the nation's foremost authorities on nonprofit law and author of Governing Nonprofit Organizations: Federal and State Law and Regulation, which was published in 2004 by Harvard University Press. Ms. Fremont-Smith is a senior research fellow at the Hauser Center for Nonprofit Organizations at Harvard's Kennedy School of Government and a lecturer in law at Harvard Law School.
At a time of great jeopardy for newspapers, the option of converting them to nonprofit status has become an issue of great moment. Ms. Fremont-Smith argues in her paper that the law and IRS rulings are already in place to allow such conversions, and that current efforts at new legislation are unnecessary.
Her detailed legal analysis is called Can Nonprofits Save Journalism? Legal Constraints and Opportunities, and it examines the issue of nonprofit status for newspapers in light of detailed scrutiny of current law and the tax interpretations that the IRS has established relative to existing law.
"We believe that Marion Fremont-Smith's analysis has opened the door to creation of nonprofit newspapers, without having to wait on Congress or the IRS to act," said Alex S. Jones, director of the Shorenstein Center. "We feel her work is not only authoritative, but revolutionary in its view, and extremely timely."