H.R. 9721In markup
New bill would require charities to report fiscal sponsorship deals to IRS
Data as of July 24, 2026
Charities sponsoring other groups would face new IRS reporting rules and penalties starting in tax year 2028.AI-decoded45-second read · 5 questions answered below
Decoded
AI-decodedWhat 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 tax deductions 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
Where does it stand?
- Introduced
- House committee — You are here
- House vote
- Senate
- 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.
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Official title
Fiscal Sponsorship Transparency Act of 2026
- Introduced:
- July 16, 2026
- Latest action:
- July 22, 2026
Ordered to be Reported in the Nature of a Substitute by the Yeas and Nays: 23 - 15.
Read the official bill on Congress.gov