Fiscal Sponsorship Transparency Act of 2026

Fiscal Sponsorship Transparency Act of 2026

This bill requires certain charitable organizations to report to the Internal Revenue Service (IRS) information related to fiscal sponsorship arrangements. The bill also imposes excise taxes on improper conduit arrangements and disallows a federal tax deduction for contributions under such arrangements.

The bill defines a fiscal sponsorship arrangement as an arrangement between a charitable organization required to file an annual information return with the IRS (Form 990) and a person that is not tax-exempt under which the organization (1) agrees (for consideration) to receive and administer contributions on behalf of the person, or (2) publicly solicits and agrees to receive and administer contributions for a specific project that furthers the organization’s tax-exempt purpose. The organization must retain discretion and control over the contributions, and the arrangement must be terminable by either party.

The bill requires tax-exempt charitable organizations to report information related to fiscal sponsorship arrangements, including the

• names of the parties (other than individuals) to such arrangement,
• aggregate amounts transferred or made available for a specific project, and
• principal officer within the organization managing the arrangement.

The bill imposes excise taxes on the organization and certain organization managers for amounts transferred under a similar arrangement if the organization fails to exercise discretion and control over the use of such funds. The bill defines this as an improper conduit arrangement.

Finally, the bill disallows a tax deduction for contributions or gifts made under an improper conduit arrangement.