Fair Treatment of Religious Organizations Act of 2026

Key Points

• The bill changes federal tax law so that religious beliefs about marriage, sexuality, or gender identity can never be treated as violating public policy when the IRS decides on tax-exempt status.
• It also broadens what counts as a protected religious belief, saying a belief does not need to be required by or central to a religion to qualify for protection.
• This responds to concerns that the IRS could use a 'public policy' standard, once used to strip a university's tax exemption over racial discrimination, to target religious groups over their views on marriage or gender.
• The change would apply retroactively, starting with tax years after December 31, 2025, meaning it could affect filings for the current tax year if passed.
• The bill mainly affects churches, religious schools, and faith-based charities that rely on tax-exempt status to operate and accept tax-deductible donations.