Fiscal Sponsorship Transparency Act of 2026

Key Points

• This bill requires charities to give the IRS more information when they sponsor projects for groups that are not officially registered as charities. Organizations would have to list the names of the groups they help, how much money was shared, and which specific officer is in charge of overseeing the project.
• The goal is to stop arrangements where a charity lets someone else use its tax-exempt status to collect donations without the charity actually controlling how the money is spent. This helps ensure that tax-deductible donations are truly going toward charitable work rather than private interests.
• If a charity is caught acting as a simple pass-through for money without keeping control, the government could charge them a tax equal to 20 percent of that money. Managers who knowingly allow these deals could also face personal fines of up to 10,000 dollars.
• These new rules would start for the tax year beginning in 2028. This gives nonprofits time to update their record-keeping and make sure they are following the law when they support outside projects.

Impact Analysis

Govbase has not yet run an impact analysis on this legislation.