On April 23, 2026, the U.S. Department of the Treasury announced that the Internal Revenue Service (IRS) plans to revise Form 990 to increase transparency, strengthen tax administration, and provide clearer reporting on the activities of 501(c)(3) organizations. These are expected to be the first significant revisions to Form 990 since 2008.
What Is Being Proposed?
While the IRS has not yet released the specific language of the proposed revisions, the Treasury’s announcement signals that the following areas will face heightened disclosure requirements:
- Government Grants and Contracts: Organizations that receive public funding will be expected to provide more detailed reporting on the sources and uses of those funds, including who controls the money and where it flows.
- Fiscal Sponsorship Arrangements: The IRS will require clearer reporting on fiscal sponsorship structures, which have historically been subject to limited disclosure rules.
- Organizational Governance and Fiscal Management: Broader disclosure of internal governance practices and financial management procedures is anticipated.
The Treasury stated that these changes are intended to detect misconduct, support proper revenue classification, and reduce the risk of fraud and misuse of taxpayer dollars.
What Happens Next?
Treasury and the IRS have indicated they expect to publish proposed regulations and open a public comment period before any changes are finalized. No specific effective date has been announced at this time. This means there will be an opportunity for organizations and their advisors to provide input before the rules take effect.
What Should Your Organization Do Now?
Although the formal proposed regulations have not yet been issued, we recommend that your organization take proactive steps, including:
- Reviewing internal policies and procedures related to financial reporting and governance
- Assessing the consistency, accuracy, and completeness of data collected across all operational areas
- Evaluating any fiscal sponsorship arrangements, government grants, or government contracts currently in place
- Confirming that your existing Form 990 disclosures accurately reflect your organization’s activities and funding sources
This is an evolving area and we will continue to keep you up to date as proposed language and other updates are announced. In the meantime, please do not hesitate to reach out to your Sax advisor with any questions.