Treasury: IRS to revamp Form 990 to expand nonprofit funding disclosure
Planned revisions would require clearer reporting by 501(c)(3) organizations on government grants, government contracts and fiscal sponsorship arrangements, with proposed rules to be published for public comment.
WASHINGTON (OBV) — The U.S. Department of the Treasury said Thursday that the Internal Revenue Service plans to revise Form 990 to increase transparency and strengthen oversight of certain activities by 501(c)(3) tax-exempt organizations, including disclosures related to government contracts, government grants and fiscal sponsorship arrangements.
Treasury said clearer reporting is intended to help the IRS and the public better understand the sources and uses of public funds in the nonprofit sector, support proper revenue classification, and reduce the risk of fraud, abuse and misuse of taxpayer dollars.
“Public money and tax-exempt status demand public accountability,” Treasury Secretary Scott Bessent said in an announcement.
Treasury also flagged fiscal sponsorship as a lawful set of structures that can be used to support charitable projects, but said recent congressional oversight has raised concerns that some arrangements may obscure who controls project funds and how those funds are used.
Treasury and the IRS said they expect to publish proposed regulations and provide an opportunity for public comment before any reporting changes are finalized, and that they will weigh feasibility and reporting burden as the proposal is developed.
