2025-2026 Treasury Priority Guidance Plan Signals New Exempt Organization Guidance Directions
At the end of September, the Department of the Treasury issued its 2025-2026 Priority Guidance Plan for the 12-month period beginning July 1, 2025 through June 30, 2026. In contrast to past Priority Guidance Plans, the new plan significantly changes the priority guidance relating to tax-exempt organizations in three important ways.
First and most importantly, the plan includes two new and potentially major guidance projects relating to section 501(c)(3) tax-exempt charities (see page 7):
Guidance on the application of the fundamental public policy against racial discrimination, including consideration of recent caselaw, 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”).
These new initiatives are not a complete surprise given the recent actions of President Trump’s administration in these two areas, but their inclusion shows the administration plans to move ahead with formally changing the law in these areas.
Second, the plan contains several guidance projects either tied to provisions in the “One, Big Beautiful Bill Act” (OBBBA) or identified as part of the administration’s emphasis on deregulation and burden reduction. The former category most notably includes regulations relating to the excess compensation excise tax (section 4960) and regulations relating to the endowment investment income tax (section 4968), both of which the OBBBA amended. The latter category includes regulations relating to the private foundation expenditure responsibility requirements (section 4945), final regulations relating to donor advised funds (section 4966), guidance on the reporting of charitable contributions of trusts (section 6034), and regulations relating to the place of public inspection of materials (section 6104).
Third and finally, there are numerous perennial guidance projects that were in past plans that are not a priority this year. These include projects relating to group exemption letters, the tax-exempt hospital requirements under section 501(r), expense allocations for unrelated business tax income purposes under section 512, private foundation investments in certain partnerships under section 4941, other donor advised fund topics under sections 4958 and 4967 and relating to public-support computation, and the designation of an appropriate high-level Treasury official for church tax inquiries under section 7611. If and when any of these projects became a priority again is unknown.