Secretary Bessent cracks down on non-profit tax loopholes

Treasury Secretary Scott Bessent is backing a package of nonprofit disclosure bills aimed at closing tax loopholes, particularly around fiscal sponsorship arrangements that allow unregistered groups to operate under a charity's tax exemption without IRS reporting. The crackdown comes as the charitable deduction landscape shifts for 2026 filers, with standard deduction users now able to deduct up to $1,000 in cash donations ($2,000 for joint filers), while itemizers face a new 0.5% AGI floor. The Treasury is rewriting Form 990 as the House advances four disclosure bills. The policy targets a sector that represents roughly 17% of the U.S. economy, funded heavily by individual donors who gave $394.20 billion in 2025. The article highlights how current fiscal sponsorship rules create a 'massive black hole' for accountability, as donor money can flow through parent charities to unregistered groups that never file tax forms or reveal their identities to the IRS.