What does Preamble of SPONSOR Act do?

This bill proposes to amend the Internal Revenue Code of 1986. The proposed amendment concerns 501(c)(3) organizations. The bill would establish liability for 501(c)(3) organizations regarding the use of funding received as a fiscal sponsor.

What does SHORT TITLE. of SPONSOR Act do?

This bill is formally titled the ``Stop Proxy Organizations Nurturing Subversive Operations and Riots Act'' or the ``SPONSOR Act''.

What does LIABILITY OF TAX-EXEMPT FISCAL SPONSORS FOR SPONSORED of SPONSOR Act do?

This section amends the Internal Revenue Code of 1986 to establish liability for tax-exempt organizations acting as fiscal sponsors. If an organization described in subsection (c)(3) expends funds for a fiscal sponsorship and represents to a donor that a deduction under section 170 is allowed, the organization bears criminal and civil liability related to the fiscal sponsorship. “Covered activity” includes aiding and abetting international terrorism by designated foreign terrorist organizations, interfering with constitutional rights, or obstructing interstate commerce. “Fiscal sponsorship” is defined as a relationship where a tax-exempt organization receives and administers funds on behalf of a non-exempt project or organization, retaining control over those funds. An organization subject to this section is presumed responsible for ensuring funds used under fiscal sponsorship comply with applicable laws. The liability established by this section does not prevent defenses based on due diligence and reasonable oversight.

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SPONSOR Act

Last updated: 3/4/2026 · Introduced: 3/4/2026

Author: Nathaniel Moran (R-TX)

TL;DR (AI)

The bill amends the Internal Revenue Code to impose criminal and civil liability on 501(c)(3) organizations acting as fiscal sponsors if they represent to donors that a deduction is allowed and funds are used for activities like supporting terrorism or interfering with constitutional rights.
The bill defines 'fiscal sponsorship' as a relationship where a tax-exempt organization manages funds for a non-exempt entity, retaining control over those funds.
Organizations acting as fiscal sponsors are presumed responsible for ensuring funds comply with applicable laws, though defenses based on due diligence and reasonable oversight are permitted.

119th Congressin committeeS. 3942(In Committee)Official page

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Other Sections

Includes provisions on preamble, short title., and 1 more.

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