New IRS Proposal Targets Nonprofit Leadership Transparency Through Mandatory Conviction Disclosures

According to CBS News reporting, the Trump administration is weighing an IRS proposal that would force nonprofits to disclose on Form 990 whether any of their top officers, directors, or trustees have been convicted of certain financial or terrorism-related crimes within the last decade. Let's translate: still no federal ban on felons sitting on your board, but a public stigma machine bolted straight onto the form every 501(c)(3) in America files. This is governance theater aimed at forcing the sector to police itself.

What actually lands on the form

CBS, citing people with direct knowledge, lists the conviction categories that would trigger a disclosure: providing material support to terrorists, fraud, money laundering, securities fraud, tax evasion, theft, and civil judgments from SEC or state securities regulators' enforcement actions. The IRS would not require organizations to identify which specific officer was convicted — only to confirm whether someone in a senior role carries one of those records. The lookback window is 10 years.

A Treasury spokesperson told CBS the department is weighing "a range of measures to strengthen accountability for nonprofit organizations." Tom Jones of the American Accountability Foundation — aligned with the administration — was blunt: "No one has a right to privacy of their criminal record. If your board members are convicted criminals, I am hard pressed to understand why you have a problem with that being publicized." Catholic University law professor Roger Colinvaux, a former Joint Committee on Taxation counsel, pushed back that the rule "could just create a stigma and chill association" and "reach deeply into American civil society."

Why NYC operators should care

Skip the national-debate framing for a second. NYC's nonprofit density means hundreds of boards where one director's sealed record could trigger a disclosure box on the next 990 — and a donor-narrative crisis before your ED has finished coffee. CBS also reports that inside the IRS, some officials have privately raised concerns about the proposal's legal footing, including potential First Amendment challenges, and questioned whether it even relates to tax enforcement. Nothing is finalized. Treasury is moving at least two Form 990 revisions; a separate April proposal would tack on new disclosure requirements for nonprofits that pull government funding.

Three moves before this lands

One: audit your current officer and trustee roster against the conviction categories above. Not to purge anyone — federal law still lets felons sit on boards — but to know what a disclosure box would force you to acknowledge on the next filing. Two: tighten onboarding intake so any new board candidate signs off on a criminal-background attestation before they take a seat. Three: write the press response now, while you still have time to script it. If a senior figure on your roster carries one of these records, your board chair and ED need a pre-cleared talking point on due process, redemption, and the merit behind the appointment.

Don't wait for Treasury to finalize the rule. By the time the disclosure hits the public database, the only people shaping the narrative will be reporters who have never sat in a finance committee meeting.