U.S. Treasury targets nonprofit fiscal sponsorships as IRS looks to tighten Form 990 disclosure rules

The U.S. Treasury Department’s  planned overhaul of the IRS Form 990 places major emphasis on fiscal sponsorships, where nonprofits host groups lacking tax-exempt status. While these structures are legal and widely used, Trump administration officials are pushing for stricter oversight amid claims fiscal sponsorships obscure who operates projects, controls funds, and directs spending. The proposed changes would require detailed disclosures, including governance, financial control, and fund allocation, and would expand reporting on foreign funding sources. Critics argue the reforms would increase administrative burden, may not improve transparency, and risk uneven or politicized enforcement because of broad language defining misuse and extremist activity.