Treasury Signals Potential Changes to Form 990 for 501(c)(3)s

The Treasury Department announced plans two weeks ago to revise the Form 990 for 501(c)(3) tax-exempt organizations, vowing a renewed federal focus on transparency and accountability across the nonprofit sector.

According to Treasury, the proposed updates are intended to "improve transparency, strengthen tax administration and provide clearer reporting on certain activities," including government contracts, government grants and fiscal sponsorship arrangements. The agency noted that the changes are designed to better detect misconduct and hold bad actors accountable. 

"Public money and tax-exempt status demand public accountability," said Treasury Secretary Scott Bessent. "We are ending the days of hiding fraud, abuse and extremist activity behind complicated nonprofit arrangements. When bad actors misuse charitable structures, directors and officers should understand that transparency can lead to scrutiny, accountability and liability under the law."

The announcement builds on concerns raised earlier this year during a February hearing of the House Ways and Means Committee focused on foreign influence, where some lawmakers suggested that revisions to Form 990 could help address perceived misuse of charitable structures.

While specific changes have not yet been released, Treasury indicated that it plans to publish proposed regulations and provide an opportunity for public comment before any updates are finalized. The agency also emphasized that it will consider administrative feasibility, proportionality and reporting burden as it develops the proposal. 

The American Society of Association Executives (ASAE) and the Community Impact Coalition (CIC), of which OSAP is a founding member with President & CEO Jarrod A. Clabaugh, CAE serving on its steering committee, is actively monitoring this issue and will keep members informed as additional details emerge.