What Treasury and the IRS Announced

On April 23, 2026, Treasury confirmed that the IRS is revising Form 990, the annual return filed by most tax-exempt organizations, to require more disclosure. The stated goal is to surface fraud and funding that currently isn’t visible on the return. Treasury didn’t release a final draft, but the direction is clear: bigger schedules, more itemized reporting, and harder-to-skip disclosures about relationships between exempt organizations and related parties.

Form 990 is the public-facing tax return for most 501(c)(3) and 501(c)(4) entities with more than $200,000 in gross receipts or $500,000 in total assets. Smaller groups file Form 990-EZ or 990-N. Private foundations file Form 990-PF. These returns sit on IRS.gov and on databases like ProPublica’s Nonprofit Explorer, which means anyone — competitors, donors, journalists, state attorneys general — can read them.

What the New Disclosures Are Likely to Target

Treasury’s stated focus — fraud and hidden funding — points to a handful of specific vulnerabilities that have sat on the 990 for years. We expect the rewrite to tighten at least four of them:

Donor-advised funds. The flow of money between donor-advised fund sponsors and grantee charities is one of the least transparent parts of the exempt ecosystem. Expect more line-item detail on DAF grants received, DAF grants made, and the identity of sponsoring organizations.

Related-party transactions. Schedule L already covers loans, grants, and business deals between an exempt organization and its insiders. The current thresholds let a lot of activity slide through unreported. A revised 990 will likely lower those thresholds and force narrative disclosure of arrangements that today get a one-line summary.

Foreign activity. Schedule F (grants and activities outside the United States) is one of the weakest disclosures on the current form. A nonprofit can run major programs in several countries with only a regional summary. Treasury’s fraud framing suggests country-by-country grantee lists and stricter vetting language are on the table.

Dark-money flow through 501(c)(4) entities. Social welfare organizations have been a flashpoint for years. If Congress gets involved — and the political environment in 2026 suggests it will — expect donor-disclosure requirements for certain grants to come back into view, even if only for the IRS and not the public record.

What This Means for NYC Nonprofits

New York City hosts an unusual concentration of exempt organizations: hospital systems, universities, arts and cultural groups, private foundations, houses of worship, advocacy 501(c)(4)s, and family-office-adjacent giving vehicles. Most of them file at least one 990. Many also file state returns that pull data directly from the federal 990.

Operating public charities

If you run a mid-size NYC charity — a school, a clinic, a cultural institution — the practical impact is bookkeeping. Richer disclosure on the 990 requires richer data collection during the year. That means cleaner general ledger coding for grants received, grants paid, officer compensation, related-party expenses, and foreign activity. The organizations that get this right treat the 990 like an audit, not a tax form. Ours is a bookkeeping and reconciliation conversation before it’s a tax conversation.

Private foundations

Form 990-PF already requires more detail than the public-charity 990. If Treasury’s rewrite extends to the PF, expect the grant-by-grant listing to get tighter — foreign grantees especially. Foundations that grant internationally should pull their most recent Schedule F and confirm every grantee still has current equivalency determination or expenditure responsibility documentation.

501(c)(4) advocacy groups

If your 501(c)(4) has any federal or state lobbying activity, the Form 990 rewrite is going to land on you twice — once at the IRS and once in the political press. Tighten your lobbying expense tracking, your ballot-measure accounting, and your issue-advocacy documentation before the draft form drops.

Board members and officers

Every 990 asks about governance policies: conflict of interest, whistleblower, document retention, independent director count, and executive compensation review. These questions are currently yes/no. If the rewrite adds narrative explanations or supporting schedules, a board that answered “yes” for years without real policies behind those answers will have a problem.

Interaction With New York State Reporting

New York doesn’t end at the federal 990. Most NYC nonprofits also file CHAR500 with the New York Attorney General’s Charities Bureau, and many also register with the NYS Department of State. The CHAR500 pulls Schedule B donor data and aggregate revenue figures directly from the federal 990. If the federal form changes, the state filing changes with it — usually quietly, and usually without any warning from Albany.

Real estate–heavy nonprofits — NYC churches with property, university endowments, large foundations with investment real estate — should expect the state-level knock-on effects to show up in property-tax exemption renewals and 420-a filings. Real-estate-linked clients with nonprofit ownership structures in particular should plan for more questions from city assessors once the revised 990 is in hand.

What to Do Before the Final Form Drops

Treasury hasn’t released a draft, so anyone claiming to know the final shape of the new Form 990 is guessing. The responsible move is to tighten the data-collection side now, so whatever disclosures Treasury asks for, you can produce them without a scramble.

A practical list for NYC nonprofit CFOs and board treasurers:

• Pull your three most recent Forms 990. Identify every line where you reported a summary figure that could break down into itemized detail (grants, compensation, foreign activity, related-party transactions).
• Confirm every related-party (officer, director, key employee, substantial contributor) has a clean conflict-of-interest disclosure on file for the current year.
• Recode your chart of accounts so grants received and grants paid are segmented by source or destination, not buried in a single line.
• Reconcile your 990’s governance answers (Part VI) to the policies you actually follow. If you say you have a conflict-of-interest policy, put the current version in your governance binder.
• For foreign activity, confirm each grantee file has either an equivalency determination letter or expenditure responsibility documentation within the last three years.

If you do these five things, the rewrite becomes an inconvenience rather than a compliance event.

Open Questions and What to Watch Next

Treasury didn’t commit to a timeline. The IRS typically publishes a draft in late summer or early fall with a 30–60 day comment period before finalizing for the following tax year. A 2027-tax-year Form 990 is possible; a 2028-tax-year form is more likely. Two things to watch:

Schedule B donor disclosure. The Supreme Court’s 2021 decision in Americans for Prosperity Foundation v. Bonta restricted mandatory donor disclosure at the state level for 501(c)(3) donors. The IRS collects Schedule B federally but doesn’t publish it. A rewrite could add stricter confidentiality protections or, in a different political wind, do the opposite.

Congressional action. A rewrite through the IRS is one thing. A statutory change — via appropriations riders or standalone legislation — would reach further and be harder to reverse. Keep an eye on the tax-exempt sections of the fiscal year 2027 appropriations bills.

How The Reed Corporation Works With Nonprofit Clients

We work with NYC public charities, private foundations, and closely held family giving vehicles. Most of our nonprofit work blends bookkeeping and financial reconciliation during the year with Form 990 preparation, CHAR500 filing, and governance-policy review at year-end. For donor-side clients with significant charitable activity, we integrate the giving strategy with personal tax strategy so contributions actually move the personal tax bill, not just the nonprofit’s bottom line.

The firms that struggle most with Form 990 revisions are the ones that treat the 990 as a year-end project. The firms that breeze through them treat it as the last page of a yearlong process. That’s how we structure the engagement.

Common Questions

Our organization files Form 990-EZ. Does the rewrite affect us?
Probably yes, but less than the full 990. Treasury hasn’t said whether the EZ and 990-N will be revised in parallel. Assume some pass-through of the new disclosure requirements. Smaller organizations that currently skate on the EZ should not assume they’ll stay on it.

We have a donor-advised fund sponsor on our board. Does that trigger anything new?
Under the current 990, probably not. Under the revised form, quite possibly yes — especially if the DAF sponsor also makes grants to the organization. Document the relationship now so you’re not reconstructing it under deadline pressure next year.

We file CHAR500 in New York. Does this change our state filing?
Indirectly. The CHAR500 pulls from the federal 990. If the federal form expands, the state filing will carry the expansion with it. New York may also update its own CHAR500 form to match, which historically has happened 12–18 months after a major federal change.

What about 501(c)(4) entities? Will donor names become public?
Almost certainly not public — Schedule B remains confidential under current rules. The open question is whether the IRS adds a new schedule that captures major funders for internal enforcement purposes. That’s a live possibility.

Should we hire outside counsel for this?
If you have significant foreign activity, related-party transactions above $50,000, or 501(c)(4) lobbying, yes — at least for a one-time policy review. For a standard operating charity with clean governance, your CPA firm and board chair should be enough.

Source

Michael Cohn, “IRS to revamp Form 990 to require more info from charities,” Accounting Today, April 23, 2026. Read the original article. This piece reflects The Reed Corporation’s own analysis of the announcement and its implications for NYC-based clients, not the positions of Accounting Today or Treasury.