The Basics
- The Treasury Department and IRS recently published their 2026-2027 Priority Guidance Plan (PGP).
- This yearly plan identifies guidance projects that the Treasury Department and IRS expect to prioritize during the fiscal year beginning Oct. 1, 2026, through Sept. 30, 2027.
- The plan outlines 121 projects, focusing on areas such as continued implementation of the One Big Beautiful Bill (OBBB), deregulation and burden reduction, tax exempt organizations, tribal tax issues, digital assets, and other priorities.
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With last week’s release of the 2026–2027 Priority Guidance Plan (PGP), the IRS and Treasury Department has set the roadmap for federal tax enforcement and regulatory focus through Sept. 30, 2027.
Packed with 121 active initiatives, this year’s plan includes several important projects affecting tax-exempt organizations. From potential guidance related to OBBB provisions to continuing work on donor-advised funds and fiscal sponsorships, this article highlights the key items non-profits and exempt organizations should be watching.
Tax Exempt Organizations:
- Private-school racial discrimination: Final regulations regarding 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 section 501(c)(3). Proposed regulations were published on Sept. 4, 2026.
- Johnson Amendment: Guidance on the statutory prohibition in section 501(c)(3) against participation or intervention in political campaigns.
- Group exemption letters: Guidance revising Rev. Proc. 2026-08 for certain types of group exemption letters.
- Donor advised fund arrangements: Guidance under sections 4966 and 6033 regarding certain donor-advised fund arrangements.
- Exempt organization reporting and fiscal sponsorships: Guidance under section 6033 regarding information-reporting requirements for exempt organizations, including those regarding fiscal sponsorship arrangements.
One Big Beautiful Bill Implementation:
- Scholarship granting organizations: Regulations under section 25F on the income tax credit for contributions of individuals to scholarship granting organizations. This project has been upgraded from “guidance” on the 2025-2026 PGP to “regulations” on the current year PGP.
- Section 4960 excess compensation: Regulations under section 4960 regarding excess compensation paid by applicable tax-exempt organizations, including the expanded definition of “covered employee.” This project has been upgraded from “guidance” on the 2025-2026 PGP to “regulations” on the current year PGP.
- Private college and university excise tax: Regulations under section 4968 regarding excise tax based on investment income of certain private colleges and universities (carried over from 2025-2026 PGP).
Deregulation and Burden Reduction:
- Expenditure responsibility: Regulations under section 4945 regarding expenditure responsibility requirements for private foundations (carried over from 2025-2026 PGP).
- Public inspection: Regulations under section 6104 regarding the place for public inspection of materials relating to tax-exempt organizations, pensions, and other plans (carried over from 2025-2026 PGP).
Pivots in Guidance
As always, the IRS mentions that some projects that were on the prior year PGP are not included on the current PGP “because they were completed or reflect a change in priorities.”
The most noteworthy omission: the project for final regulations under section 4966 regarding donor advised funds, including excise taxes on sponsoring organizations and fund management. While the 2026-2027 PGP includes a new donor advised fund project under sections 4966 and 6033, the prior year’s final regulations project was not carried forward.
Stay Informed
As always, Rehmann will continue to monitor evolving IRS priorities and regulatory changes throughout the year. If you’re uncertain if or how the 2026-2027 Priority Guidance Plan may impact your organization, please reach out to our public sector team.