IRS to update Form 990 amid transparency push for nonprofits

A revision of Form 990, Return of Organization Exempt From Income Tax, is coming, changes that Treasury says are designed to improve transparency, strengthen tax administration, and provide clearer reporting on tax-exempt organizations’ activities.

The revisions, announced in a news release on Thursday, are also focused on the government contracts, government grants, and fiscal sponsorship arrangements of Sec. 501(c)(3) organizations.

A fiscal sponsor is a tax-exempt organization that funds other, typically newer, groups before they establish themselves on their own.

“When bad actors misuse charitable structures, directors and officers should understand that transparency can lead to scrutiny, accountability, and liability under the law,” Treasury Secretary Scott Bessent said in the release.

Treasury and the IRS expect to publish proposed regulations and have a public comment period before reporting changes are finalized, the release said.

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