Fiscal Sponsorship Transparency Act of 2026
Latest action (22 Jul 2026): Ordered to be Reported in the Nature of a Substitute by the Yeas and Nays: 23 - 15.
What this bill does
H.R. 9721, the Fiscal Sponsorship Transparency Act of 2026, would amend the Internal Revenue Code to add new reporting and tax rules for "fiscal sponsorship" arrangements — situations in which a tax-exempt charitable organization receives, administers, or transfers funds on behalf of another entity or for a specific project. Covered organizations would have to report annually on each such arrangement, including the parties involved, amounts transferred or made available, a description of related activities, the responsible officer, and the arrangement's start and end dates. The bill also denies a charitable tax deduction for contributions made under an "improper conduit arrangement" — one where a charity solicits funds for a specific non-exempt recipient without exercising real discretion and control over their use — and creates new excise taxes on organizations and their managers that enter into such improper arrangements, with escalating penalties if the transfer is not corrected.
The bill primarily affects 501(c)(3) charitable organizations that sponsor projects or administer funds for other groups, along with their officers and managers, who could face personal excise tax liability. Private foundations and donor-advised funds are excluded from the new reporting requirement. Contributors who give through improper conduit arrangements would lose the associated tax deduction.
The bill was introduced by Rep. Lloyd Smucker and referred to the House Ways and Means Committee, which ordered it reported (23-15) in a revised form. It would next go to the full House for consideration; the amendments would apply to taxable years beginning after December 31, 2027, if enacted.
Plain-English summary generated by Bill100 AI from the official record. Always verify against the source below.
Official summary
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.
Timeline
22 Jul 2026
Ordered to be Reported in the Nature of a Substitute by the Yeas and Nays: 23 - 15.
Common questions
- What does H.R. 9721 do?
- H.R. 9721, the Fiscal Sponsorship Transparency Act of 2026, would amend the Internal Revenue Code to add new reporting and tax rules for "fiscal sponsorship" arrangements — situations in which a tax-exempt charitable organization receives, administers, or transfers funds on behalf of another entity or for a specific project. Covered organizations would have to report annually on each such arrangement, including the parties involved, amounts transferred or made available, a description of related activities, the responsible officer, and the arrangement's start and end dates. The bill also denies a charitable tax deduction for contributions made under an "improper conduit arrangement" — one where a charity solicits funds for a specific non-exempt recipient without exercising real discretion and control over their use — and creates new excise taxes on organizations and their managers that enter into such improper arrangements, with escalating penalties if the transfer is not corrected. The bill primarily affects 501(c)(3) charitable organizations that sponsor projects or administer funds for other groups, along with their officers and managers, who could face personal excise tax liability. Private foundations and donor-advised funds are excluded from the new reporting requirement. Contributors who give through improper conduit arrangements would lose the associated tax deduction. The bill was introduced by Rep. Lloyd Smucker and referred to the House Ways and Means Committee, which ordered it reported (23-15) in a revised form. It would next go to the full House for consideration; the amendments would apply to taxable years beginning after December 31, 2027, if enacted.
- Has H.R. 9721 become law?
- Not yet. As of 22 Jul 2026, H.R. 9721 is ordered reported.
- Who sponsored H.R. 9721?
- H.R. 9721 was sponsored by Rep. Lloyd Smucker [R-PA11] (Republican-PA), with 0 cosponsors.
- What's the latest action on H.R. 9721?
- Ordered to be Reported in the Nature of a Substitute by the Yeas and Nays: 23 - 15. (22 Jul 2026).
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