IRS Form 990 Is Changing; Here's Why Your Nonprofit Should Pay Attention
By: Patrick Sternal and William M. Klimon
The Treasury Department announced plans on April 23, 2026 to revise IRS Form 990, with a sharp focus on transparency around government contracts, government grants, and fiscal sponsorship arrangements. The goal is to detect misconduct and hold wrongdoers accountable by making it harder for funds to move through tax-exempt structures without clear documentation.
The Treasury acknowledges that “fiscal sponsorship” is an umbrella term for “longstanding and lawful structures” through which 501(c)(3) organizations may support charitable projects and initiatives. Implicit in the announcement is concern that fiscal sponsorship can obscure who controls project funds and how they are used.
No changes are immediate. Proposed regulations will go through a public comment period before anything takes effect which means your organization has an opportunity to weigh in.
What you should do now
Review how your government funding relationships and any fiscal sponsorship arrangements are currently documented and disclosed on your Form 990. If there are open questions, consult counsel before the regulatory process moves forward.
Holtzman Vogel works with nonprofits and foundations on compliance, governance, and Form 990 reporting. If this raises questions about your organization's current practices, please reach out to Patrick Sternal and William Klimon or your personal Holtzman Vogel contact.
