FEDERAL UPDATES
1. DHS Proposes $103,265 Fee for H-1B Visas
The big picture: DHS issued a proposed rule that would charge employers $103,265 every time they file a new H-1B petition. H-1B is the visa program that lets employers sponsor foreign workers for skilled jobs that require at least a bachelor's degree (e.g., physicians, engineers, IT and data staff, researchers). This fee would be over 100 times the current filing fee and would apply to nearly all new H-1B petitions — not just ones filed for workers still living abroad. There's no exception for small organizations; the only nonprofits that would be exempt are those tied to research or higher education.
Why it matters: Any nonprofit sponsoring skilled staff outside the research/higher-ed exemption (community health clinics, international aid groups, arts and advocacy groups, and more) would owe the full fee for each hire. DHS is considering a similar $100,000 fee on Optional Practical Training, the work permission international students get after graduating, which would add another cost on top for organizations hiring from that same pipeline. Once the rule is officially published, there will be a 30-day period for public comment.
More details: Continue reading about H-1B visas here.
2. Senate Finance Committee Advances Bipartisan Tax Bill With Nonprofit Due Process Protections
The big picture: The Senate Finance Committee voted 26-1 to approve the Taxpayer Assistance and Service (TAS) Act, an IRS modernization bill that includes a provision codifying nonprofits' existing right to an administrative appeal when the IRS denies or revokes tax-exempt status.
Why it matters: With the IRS Whistleblower Alert, the Form 990 Transparency Initiative, and the House Oversight Task Force all raising the stakes of an adverse exemption decision this year, a statutory — not just regulatory — right to appeal is a meaningful backstop. The National Council of Nonprofits (NCN) and Independent Sector have endorsed the provision. The bill now needs a full Senate vote and House action before it could reach the President's desk.
More details: Continue reading about the TAS Act here.
3. Proposed DEI/Racial Inequities Regulation Could Be Released Very Soon The big picture: The White House's Office of Information and Regulatory Affairs has concluded review of a forthcoming IRS regulation on “the application of the fundamental public policy against racial discrimination in schools” — expected within days or weeks. Tax experts believe the administration may use it to expand the “fundamental public policy” doctrine from Bob Jones University v. United States, historically applied narrowly to schools that racially exclude students.
Why it matters: An expanded doctrine could become a tool to threaten tax-exempt status for nonprofits running DEI programs, even though courts have continued to uphold many such practices as lawful. No text has been published yet; once it is, a public comment period opens. The National Council of Nonprofits (NCN) is coordinating with civil rights organizations and will share resources to help nonprofits engage.
More details: Continue reading about the proposed DEI regulations here.
4. Heads Up: Sweeping Proposed Changes to the 2030 Census
The big picture: A leaked, pre-decisional draft rule would redefine “resident” to exclude broad, undefined categories of noncitizens (potentially including international students and H-1B holders) from the population count used for congressional apportionment, and would end race and ethnicity data collection for the first time since 1790.
Why it matters: Census data drives the funding formulas behind housing, health, education, and human services programs, and it shapes district lines. No rule has been formally published and no comment period has opened, but nonprofits doing outreach in immigrant or historically undercounted communities should be watching closely — feel free to share this one broadly.
More details: Continue reading about the proposed census changes here.
5. IRS May Add Fraud and Terrorism Conviction Disclosures to Form 990
The big picture: A new CBS News report says the IRS is weighing a requirement that nonprofits disclose whether top officials have been convicted of certain financial or terrorism-related crimes in the past 10 years — an addition to the Form 990 Transparency Initiative PANO flagged in April. Because filers attest to accuracy under penalty of perjury, the practical effect could be to push all nonprofits toward routine board-member background checks.
Why it matters: Diane Yentel, President & CEO of the National Council of Nonprofits (NCN), called it “a step too far” given the administration's broader rhetoric toward nonprofits, noting compliance “would take precious time and resources away from nonprofits' core work.” No proposed rule has been published yet. |
