Sponsors (12)
The bill increases protections and regulatory predictability for religious organizations seeking 501(c) status but does so by constraining IRS discretion, a trade-off that may reduce oversight and enable organizations to retain tax-exempt benefits even when their asserted religious beliefs facilitate discriminatory or questionable conduct.
Religious organizations (including small or nontraditional faith groups) will be less likely to lose or be denied 501(c) tax-exempt status for doctrines concerning marriage, sexuality, or gender identity, protecting their ability to remain tax-exempt when their teachings conflict with prevailing social views.
Nonprofit organizations and taxpayers gain a clearer statutory standard for evaluating 'religious purpose' under section 501, increasing predictability about who qualifies for tax-exempt status and reducing uncertainty from ad hoc IRS determinations.
The bill limits IRS discretion to deem minority or nontraditional beliefs as not 'religious,' lowering the risk that heterodox groups will be excluded from recognition as religious organizations.
LGBTQ+ people may have reduced legal and practical recourse if organizations rely on protected religious beliefs to justify discriminatory practices while retaining tax-exempt status.
Taxpayers could indirectly subsidize organizations that engage in discriminatory conduct because asserting protected religious beliefs would no longer put tax-exempt status at risk.
Limiting IRS enforcement discretion may complicate investigations into organizations that assert religious purpose to mask nonreligious or potentially illegal activity, reducing regulatory oversight.
Based on analysis of 2 sections of legislative text.
Defines certain religious beliefs about marriage, sexuality, and gender identity as protected for 501 tax-exempt status and broadens what counts as a religious belief.
Adds a rule to the federal tax code that says an organization’s religious beliefs or practices about marriage, sexuality, or gender identity cannot be used to find the group inconsistent with law or public policy when deciding section 501 tax-exempt status. It also clarifies that a belief does not have to be central to or compelled by a system of religion to be considered a ‘‘religious belief’’ for tax-exemption purposes. Applies to taxable years beginning after December 31, 2025, and changes how the IRS must evaluate whether an organization qualifies as tax-exempt under 26 U.S.C. §501 by protecting certain religious beliefs from being treated as contrary to law or not ‘‘religious.’'
Official title: To amend the Internal Revenue Code of 1986 to ensure fair treatment of certain charitable organizations.
Introduced July 16, 2026 by Blake D. Moore · Last progress July 16, 2026