Another application that seemingly got caught up in the backlog came from a group of journalists in Chicago. The Chicago News Cooperative provided news for the Midwest edition of The New York Times. The co-op also sought tax-exempt status. Veteran journalist James O’Shea, a former managing editor of The Chicago Tribune, was in charge.
“There were political organizations trying to get these exemptions, and I think the IRS was concerned — and probably appropriately so — that some of these news organizations were really political organizations,” he says, “and so they were examining that, and we just got caught up in that.”
For more than two years, the Chicago News Cooperative waited for an IRS ruling. But without tax-exempt status, foundation support dried up, and the cooperative went out of business.
Progress Texas did eventually get its tax-exempt status. And director Espinoza says he has no trouble with the scrutiny his organization underwent.
“Look, if you want a tax exemption, you’ve got to jump through some hoops,” he says. “You need to be able to demonstrate that what you’re doing is legitimately a tax-exempt activity, and that’s what we saw it as.”