IRS Proposes Regulations Changing Education Institution 501(c)(3) Status
New Internal Revenue Service (IRS) proposed regulations would "amend existing regulations under 501(c)(3) to clarify that certain schools that discriminate on the basis of race are not operated exclusively for charitable purposes," according to a notice from the U.S. Office of Management and Budget's (OMB) Office of Information and Regulatory Affairs.
The specific proposed changes, Regulation Identifier Number 1545-BS05, are still under review by the federal Office of Management and Budget (OMB) and have not been made public. There is no announced timetable for their release. However, in late September 2025, the U.S. Department of the Treasury issued its 2025-2026 Priority Guidance Plan.
Nestled among the 105 listed "guidance projects that are priorities for allocating Treasury Department and IRS resources during the 12-month period from July 1, 2025, through June 30, 2026" were two under the heading "SECTION 501(c)(3) ISSUES:"
- Guidance on the application of the fundamental public policy against racial discrimination, including consideration of recent case law, in determining the eligibility of private schools for recognition of tax-exempt status under Section 501(c)(3).
- Guidance on the statutory prohibition in Section 501(c)(3) against participation or intervention in political campaigns (the "Johnson Amendment").
Please select this link to read the complete article from The NonProfit Times.