Form 990, the annual information return required for most tax-exempt organizations, may be undergoing significant changes that could affect the nonprofit sector. This filing provides the IRS, state regulators, and the public with detailed information about an organization’s mission, programs, governance, and finances.
Because Form 990 is publicly available, it also serves as an important transparency tool for watchdog organizations, the media, donors, and other stakeholders evaluating an organization’s activities, governance practices, and financial stewardship.
In April 2026, the U.S. Department of the Treasury announced that the IRS is considering revisions to Form 990 aimed at providing clearer and more transparent reporting. The proposed changes could increase visibility into donor-related funding sources, including government grants and contracts, donor-advised fund (DAF) contributions, and fiscal sponsorship arrangements. The IRS is particularly interested in understanding who controls these funds and how they are ultimately used.
Tax-exempt organizations are required under Internal Revenue Code Section 6033 to file Form 990 in the form and manner prescribed by the IRS, including answering all required questions and providing requested disclosures.
Additional Disclosure Requirements May Be Considered
Currently, donor identities reported on Form 990, Schedule B, are not disclosed to the public. This includes contributions made through donor-advised funds (DAFs), which can separate the identity of the original donor from the recipient organization. Future Form 990 revisions could require organizations to disclose information such as the amount received from DAFs, the frequency of those contributions, and the total annual funding received through DAFs.
Requiring this information could be viewed as an important step toward improving transparency and helping regulators better track nonprofit funding sources.
The IRS is also considering ways to identify organizations involved in fiscal sponsorship arrangements, potentially through a simple checkbox on Form 990. Organizations answering “yes” could then be required to provide additional information that would help the IRS determine whether further review is warranted.
To enhance transparency, the IRS and Treasury may also consider defining fiscal sponsorships and other technical concepts while introducing additional reporting requirements, including:
- Documenting roles, responsibilities, and financial controls
- Disclosing government grants and contracts to ensure proper reporting and classification
- Documenting decision-making authority and financial oversight
At this time, the specific Form 990 line items, schedules, or definitions that may be added have not been identified. In particular, fiscal sponsorship is not currently defined in the Internal Revenue Code, and any reporting framework related to that concept would likely require additional guidance before implementation.
The public will have an opportunity to comment before any regulatory or form changes are finalized. This process could take several months or even years.
In the meantime, exempt organizations, boards, and management teams should review their governance, administrative, and recordkeeping processes and make improvements where necessary. Organizations should also be prepared to devote greater attention to Form 990 compliance as reporting expectations continue to evolve. Working with trusted advisors now can help organizations prepare for increased accountability and regulatory scrutiny.
Changes for 2026
Organizations should also be aware that, under IRC Section 4968, as amended by the 2025 One Big Beautiful Bill Act (OBBBA), applicable educational institutions will be required to report certain student-count information on Form 990 for taxable years beginning after December 31, 2025.