New bill would require charities to report fiscal sponsorship deals to IRS
In markupH.R. 9721Latest action
Sponsor: Lloyd Smucker · Representative · PA
AIDecoded by AI · checked against the recordRead the official text
Official title: Fiscal Sponsorship Transparency Act of 2026
119th Congress
Topics: Jobs & the economy
Introduced:
Read the official bill on Congress.govIn plain words
The plain-language version comes first. The official text is always the reference.
Charities sponsoring other groups would face new IRS reporting rules and penalties starting in tax year 2028.
45-second read · 5 questions answered below
What does this do?
The bill requires charities in "fiscal sponsorship" arrangements to report yearly details to the IRS, including partners, money transferred, its use, and the responsible overseer. It also penalizes "improper conduit arrangements" where a charity passes along donations without real control over their use, making such donations non-deductible.
Who does it affect?
This affects nonprofits that sponsor other groups or projects, including small nonprofits, community organizations, and startup charities, as well as donors who give to these arrangements.
Why does it matter?
The rules would add compliance and recordkeeping burdens for charities, and donors could lose if an arrangement is found improper.
What does it cost, and who pays?
- 20% penalty on misused funds
- rises to 100% if uncorrected
- managers face personal fines
AI-drafted summary. Check it against the official text before you act on it.
Read the official bill on Congress.govMake the call
Where does it stand?
- IntroducedJul 16, 2026
- House committeeYou are here · Jul 22, 2026
- House vote
- Senate
- The president's desk
Right now: a House committee is reviewing it. If the Senate changes it, it goes back to the House before reaching the president.
Latest action: — Ordered to be Reported in the Nature of a Substitute by the Yeas and Nays: 23 - 15.