The Internal Revenue Service (IRS) and the U.S. Department of the Treasury (Treasury) released the 2025-2026 Priority Guidance Plan specifying the areas that they intend to focus formal guidance efforts on for the next fiscal year. There are several items that potentially impact section 501(c) organizations including:
- Section 501(c)(3) Issues
- Guidance on the application of the fundamental public policy against racial discrimination, including consideration of recent case law, in determining the eligibility of private schools for recognition of tax-exempt status under §501(c)(3).
- Guidance on the statutory prohibition in §501(c)(3) against participation or intervention in political campaigns (the “Johnson Amendment”).
- One, Big, Beautiful Bill Act Implementation
- Regulations under §4968 regarding excise tax based on investment income of certain private colleges and universities.
- Guidance under §4960 regarding excess compensation paid by applicable tax-exempt organizations, including the expanded definition of “covered employee.”
- Deregulation and Burden Reduction
- Regulations under §4945 regarding expenditure responsibility requirements.
- Final regulations under §4966 regarding donor advised funds, including excise taxes on sponsoring organizations and fund management. Proposed regulations were published on November 14, 2023.
- Guidance concerning the reporting of charitable contributions of trusts under §6034.
- Withdrawal of proposed regulations under §6103(n) related to disclosure of returns and return information in connection with written contracts or agreements for the acquisition of property or services for tax administration purposes.
- Regulations under §6104 regarding the place for public inspection of materials relating to tax-exempt organizations, pensions, and other plans.
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