The Chicago News Cooperative announced officially today that it will be suspending its contributions to The New York Times. As of next Sunday, the Chicago organisation will no longer submit articles to The New York Times Midwest pages or to its website.

In a blog post announcing the change, CNC's CEO and editor James O'Shea writes that he takes "full responsibility for this situation". He laments that "unlike similar start-up efforts like the Texas Tribune in Austin, the Bay Citizen in San Francisco and ProPublica in New York, we never recruited the kind of seven figure donations from people of means concerned about the declining quality of news coverage around the country."

Rather than saying that the CNC will close down entirely, O'Shea writes that "in the coming days and weeks, we will be examining our potential to see if we can identify an alternative path and preserve some of the journalistic assets we have developed."

O'Shea writes that the CNC's decision to suspend publication "was motivated by some complex factors and unresolved questions regarding our tax status and a change in circumstances that triggered questions about the economic wisdom of commitments between the CNC and The New York Times."

In an earlier article reporting the CNC's closure, Michael Miner of the Chicago Reader describes the tax difficulties facing the CNC in greater detail. He states that until the CNC could secure its tax status as a non-profit, the funding it received from its main donor, the MacArthur Foundation, would have to be processed in a different way, and would be delayed.

Meanwhile, Miner reports, the CNC asked The New York Times, its second-largest funder, for more money, but the Times refused.

The Huffington Post notes that uncertain tax status has recently hurt other non-profit journalism organizations too. The CJR published an article in November nothing that the San Francisco Public Press and "at least three other nonprofit news startups are also caught up in yearlong IRS delays".

Miner writes in the Chicago Reader that the CNC faced further difficulties because expected synergies never materialised between the CNC and the Chicago Sun-Times, which was bought up last December by a group of Chicago investors, many of whom sit on the CNC's board.

An article in Chicago Business reported that O'Shea was currently looking for possible ways that the Chicago Sun Times and the CNC could work together. O'Shea is quoted by the paper: "we are in discussion with the Sun-Times about the continuation of some of our coverage areas, including education coverage."

In his official announcement today, O'Shea disputes some of the earlier coverage of the CNC's decision to suspend publication. He writes that other reports about the publication's closure were "riddled with errors", "sloppy" and "inaccurate". On a defiant note, O'Shea states that these kind of reports "reinforced in my mind the need for solidly reported, well-edited journalism, the kind that professional CNC journalists have been doing on our website and in the New York Times since November, 2009."

O'Shea is not specific about precisely which reports or assertions he disputes.

Sources: Chicago News Coop, Chicago Reader, The Huffington Post, CJR, Chicago Business