Poynter’s Bill Mitchell has an interesting piece on potential tax problems for the Huffington Post with regard to the new $1.75 million investigative-reporting project it announced last week.
The conundrum is that HuffPo is a for-profit, while the Huffington Post Investigative Fund is a non-profit. If it looks like the non-profit entity exists mainly to serve the for-profit, there could be a problem. That’s one of the reasons why the people who are in charge of the investigative project, Nick Penniman and Jay Rosen, say their work will be available to everyone, not just HuffPo.
Rosen and proto-blogger Dave Winer talk about the project in their weekly podcast. (Excuse my self-promotional indulgence; I come up, but only for a minute or two.)
Simply in terms of image, this is a great move for the Huffington Post, whose aggressive aggregation of other content, in my view, brings it right to the edge of copyright violation. “Someone is going to sue the Huffington Post,” the Nieman Journalism Lab’s Joshua Benton recently said.
By giving back and producing original content that everyone can use, HuffPo may be able to quiet the critics. Just as long as it can keep the IRS happy at the same time.
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NewsHound
This is good news. And even if the Non-Profit helped add profit to the For-Profit, ultimately, in the end, the tax should come out about the same.
Peter Porcupine
DK – they need to beware, as IRS frowns upon shell corporations, non-profit or no. They need to get IN WRITING a letter of determination (even if subsequent cases are called in another direction, that letter will rule in their case – it’s the Papal dispensation of teh tax world!)