10/08/2026

IRS Sets Tax-Exempt Guidance Priorities as Senate Advances Appeal Rights

Tax-exempt organizations should watch two recent federal developments. The Internal Revenue Service has identified political campaign activity and fiscal sponsorship reporting among its priorities for forthcoming guidance, while the Senate has approved legislation that would provide clearer appeal rights when an organization’s tax-exempt status is denied or revoked. 

What You Need To Know

• The IRS released its 2026-27 Priority Guidance Plan on Sept. 29. The plan covers the federal fiscal year that began Oct. 1. 
• For 501(c)(3) organizations, the IRS plans guidance on the prohibition against participation or intervention in political campaigns, commonly known as the Johnson Amendment. 
• The IRS also plans guidance on exempt-organization reporting requirements, including fiscal sponsorship arrangements.
• The Senate approved the Taxpayer Assistance and Service Act on Sept. 30 as an amendment to H.R. 5349. 
• The bill would establish a right to appeal IRS determinations denying or revoking tax-exempt status and require written notice of that right.

What Happens Next

• The IRS plan identifies priorities but does not set deadlines for issuing guidance. The plan may also be updated during the year.
• Because the Senate substantially amended the House-passed H.R. 5349, additional congressional action is needed before the Taxpayer Assistance and Service Act can become law. 

What to Do

• Continue following current requirements governing political campaign activity and tax-exempt organization reporting.
• Organizations using fiscal sponsorship arrangements should review current reporting practices with legal or tax advisers as appropriate.
• Review LeadingAge’s coverage of the forthcoming IRS guidance for additional context on the issues affecting tax-exempt organizations.
• Read LeadingAge’s update on the Taxpayer Assistance and Service Act and monitor the legislation for further congressional action.