Four Pending House Bills Could Affect Not-for-Profit Reporting, Political Activity, and Religious Organizations

Tax-exempt organizations may want to keep an eye on four House bills that recently moved out of the Ways and Means Committee. The proposals are still early in the legislative process, but together they point to areas where Congress is paying closer attention: fiscal sponsorships, foreign-source contributions, political activity, and protections for religious organizations.

The committee approved all four bills on July 22, 2026. None has become law, and each would still need to pass the House and Senate and be signed by the president. The discussion below reflects the bills as amended and approved by the committee.

Fiscal Sponsorship Transparency Act of 2026 (H.R. 9721)

For organizations that serve as fiscal sponsors, H.R. 9721 would add new Form 990 reporting requirements for certain Section 501(c)(3) arrangements.

For each covered fiscal sponsorship arrangement, an organization generally would be required to disclose:

• The names of the participating entities;
• The amount made available or transferred during the year;
• A description of the activities supported;
• The individual serving as the arrangement’s principal officer; and
• The arrangement’s beginning and, if applicable, ending dates.

The bill would also address “improper conduit arrangements,” which are situations in which a charity solicits or receives contributions for transfer to a specifically identified nonexempt party but fails to exercise discretion and control over the funds. Such arrangements could result in the loss of the donor’s charitable deduction and excise taxes on the organization and responsible managers. Uncorrected transactions could trigger substantially larger penalties.

The reporting provisions generally would apply to Section 501(c)(3) organizations required to file Form 990, with exceptions for private foundations and donor-advised funds. As currently written, the proposal would apply to tax years beginning after Dec. 31, 2027.

Why it matters: Organizations that sponsor projects should consider whether their agreements clearly establish the sponsor’s control over charitable funds and whether their accounting systems can produce project-level information.

Foreign Funding Transparency Act (H.R. 9772)

The foreign funding proposal would require tax-exempt organizations subject to the applicable Form 990 filing requirements to report the aggregate amount of contributions received from foreign nationals.

Organizations would also need to break out contributions associated with designated countries of concern, such as China, Russia, Iran, and North Korea. The proposal focuses on aggregate reporting rather than the routine public disclosure of individual donor identities.

What to watch: Affected organizations may need procedures for obtaining and retaining information about a donor’s foreign-national status. This could require changes to gift-acceptance forms, donor databases, internal controls, and record-retention policies.

Stopping Foreign Influence in Elections Act of 2026 (H.R. 9771)

H.R. 9771 takes a different approach by targeting certain political contributions made by Section 501(c) organizations that have received contributions from foreign nationals during a specified two-year testing period.

The consequences would escalate with repeated transactions:

• A first violation could produce a tax equal to 100% of the political contribution;
• A second could produce a 200% tax; and
• A third or subsequent violation could produce a 200% tax and a two-year suspension of the organization’s federal tax exemption.

Certain larger Form 990 filers could face an additional penalty equal to twice the amount of the contribution. The proposal would generally become effective one year after enactment.

Potential impact: Although Section 501(c)(3) charities are already prohibited from participating in political campaigns, the bill could be especially important for other Section 501(c) organizations that may lawfully engage in some political activity. Those organizations may need to coordinate donor screening, fund accounting, and political-expenditure controls.

Fair Treatment of Religious Organizations Act of 2026 (H.R. 9722)

The religious organizations bill would provide that the federal government may not consider a religious organization’s beliefs or practices concerning marriage, sexuality, or gender identity when determining whether it has a religious purpose for federal tax-exemption purposes, even when those beliefs or practices are inconsistent with a government determination of public policy.

The legislation also addresses the treatment of certain religious employers participating in federally funded programs. Its intended effect is to protect qualifying religious organizations from losing tax benefits or federal funding eligibility because of specified religious beliefs or related employment practices.

What it could mean: If enacted, the bill could provide additional federal protection for faith-based not-for-profits, schools, ministries, and other religious employers. Its interaction with federal and state employment-discrimination requirements would require careful legal analysis.

What Not-for-Profits Should Do Now

Because these proposals are not yet law, organizations do not need to change their federal filings solely because of the bills. Nevertheless, not-for-profits potentially affected by the legislation should consider taking several preparatory steps:

• Inventory existing fiscal sponsorship arrangements;
• Confirm that written agreements document the sponsor’s discretion and control;
• Evaluate whether donor records capture information needed to identify foreign-source contributions;
• Review policies governing political contributions and grants to politically active organizations;
• Ensure that restricted gifts and project-level transactions can be traced through the accounting system; and
• Monitor amendments, effective dates, and any future IRS guidance.

The bills may change as they move through Congress. Organizations should avoid implementing burdensome new procedures prematurely, but early assessment can identify gaps that may need attention if any of the proposals becomes law.

Contact a CBIZ tax professional to discuss how proposed or enacted legislation may apply to your organization’s specific circumstances.