Fiscal Sponsorship Transparency Act of 2026
Sponsored By: Representative Smucker, Lloyd [R-PA-11]
In Committee
Summary
This bill targets greater transparency and accountability for fiscal sponsorship arrangements. It forces new reporting and adds taxes and penalties for donations routed through improper conduit arrangements.
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 0 benefits, 2 costs, 1 mixed.
Donors lose deduction for conduit gifts
If enacted, the bill would deny the federal charitable contribution deduction for any gift made under an improper conduit arrangement. Donors who give money that is solicited to be sent to a specifically identified non-exempt recipient, and where the charity fails to exercise discretion and control, would not get a federal deduction. This rule would apply for tax years starting after December 31, 2027.
New excise taxes for charities' transfers
If enacted, the bill would create excise taxes when a tax-exempt organization transfers money under an improper conduit arrangement. The organization would pay an initial tax equal to 20% of the transfer. A manager who agreed to the transfer knowing it was improper could pay 5% up front, capped at $10,000. If the transfer is not corrected in the taxable period, the organization could owe another 100% of the transfer and managers who refuse correction could owe 50%, capped at $20,000. These rules would apply for tax years starting after December 31, 2027.
New rules and reporting for fiscal sponsors
If enacted, the bill would define when an organization has a fiscal sponsorship arrangement. It would treat some owned entities that are normally disregarded as separate, non-exempt entities. Applicable tax-exempt organizations would have to report each fiscal sponsorship on their return. Reports would include the non-individual party name, total amounts moved, what activities the funds supported, the principal officer in charge, and the arrangement start and end dates. The Treasury Secretary would write rules to clarify which arrangements are covered and what "discretion and control" means. These rules would apply for tax years starting after December 31, 2027.
Sponsors & CoSponsors
Sponsor
Smucker, Lloyd [R-PA-11]
PA • R
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
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