World Cup tax relief exposes foreign Form 990 filing risks

The final whistle has blown on the 2026 FIFA World Cup. For most fans, that marks the end of one of the largest sporting events ever hosted in North America. For tax professionals, however, the tournament leaves behind an important compliance lesson. Before the first match kicked off, the IRS issued Revenue Procedure 2026-28, granting qualifying foreign FIFA Participating Member Associations (PMAs) relief from filing Form 990, Return of Organization Exempt from Income Tax, while they temporarily conducted activities in the United States.

Although the guidance was written specifically for the World Cup, it raises broader questions that practitioners may encounter whenever a foreign tax-exempt organization operates in the United States. Now that the tournament has concluded, it's worth asking: Why did the IRS provide this relief, and what can tax professionals learn from it when advising foreign exempt organizations in the future?

The answer extends well beyond the soccer field. While Rev. Proc. 2026-28 applies only to a limited group of organizations, it serves as a valuable reminder that determining whether a foreign exempt organization must file Form 990 requires careful analysis of its activities, income and any available filing exceptions. 

Why the IRS waived Form 990 filing requirements for certain World Cup organizations

Section 6033(a)(1) generally requires organizations exempt under §501(a) to file an annual return unless an exception applies. As dozens of foreign nonprofit sports organizations entered the United States for the tournament, the IRS recognized that some qualifying FIFA Participating Member Associations could become subject to annual exempt organization reporting requirements.

In Rev. Proc. 2026-28, the IRS concluded that requiring a full Form 990 filing from certain foreign PMAs would impose a compliance burden disproportionate to the value of the filing, given the temporary and event-specific nature of their U.S. presence.

Ordinarily, organizations recognized as tax-exempt under Internal Revenue Code (IRC) §501(a) must file an annual information return unless an exception applies. For qualifying FIFA member associations, however, the IRS determined that requiring a complete Form 990 would impose a significant compliance burden for organizations whose U.S. presence was temporary and tied solely to the World Cup.

Revenue Procedure 2026-28 allows qualifying associations to forgo filing Form 990, Form 990-EZ and Form 990-N (e-Postcard) for the applicable tax year if they:

• Are recognized as tax-exempt under §501(a)
• Are not private foundations
• Are not supporting organizations described in §509(a)(3)
• Have no U.S.-source gross income or effectively connected income (ECI) other than qualifying World Cup-related income

The IRS specifically identifies FIFA prize money and promotional income earned because of participation in the tournament as qualifying income.

The relief is intentionally narrow and was designed to address the unique circumstances surrounding the World Cup, not to create a broad exemption for all foreign nonprofits operating in the United States.

Foreign charities, educational institutions, religious organizations, trade associations and other exempt organizations routinely enter the United States to conduct research, attend conferences, participate in fundraising events or carry out other temporary activities. Each situation requires practitioners to determine whether a Form 990-series return is required. 

Who must file Form 990?

One of the most common misconceptions is that foreign organizations are automatically exempt from Form 990 filing requirements. They’re not.

Organizations recognized as exempt under §501(a) generally file one of the following annual information returns unless a filing exception applies:

• Form 990 for larger exempt organizations
• Form 990-EZ for organizations meeting the simplified filing thresholds
• Form 990-N (e-Postcard) for eligible organizations that normally have gross receipts of $50,000 or less

Which return applies depends on more than the organization's size. Foreign organizations must also evaluate their U.S. activities, income and whether they qualify for an exception under the Internal Revenue Code, Treasury regulations or IRS administrative guidance. 

Automatic revocation point

Failure to file a required annual return or notice can have serious consequences. Under §6033(j)(1), an organization described in §6033(a)(1) or (i) that fails to file the required annual return or notice for three consecutive years will have its exempt status revoked as provided in that section.

Understanding four tax concepts that affect Form 990 filing requirements

One reason Form 990 filing determinations become complicated is that several important tax concepts are often confused. 

U.S.-source income

• U.S.-source income is income the Internal Revenue Code treats as originating within the United States. Examples may include compensation for services performed in the United States, rental income from U.S. property and certain investment income.
• Identifying U.S.-source income is often the first step in determining whether additional filing analysis is required. 

Effectively connected income

• Effectively connected income, or ECI, refers to income connected with conducting a trade or business in the United States.
• Although some U.S.-source income is also ECI, the terms are not interchangeable. Whether income is effectively connected depends on the organization's activities and surrounding facts. 

Gross income

• Gross income generally means income before allowable deductions. Whether a foreign organization has U.S.-source gross income can affect the availability of certain filing exceptions. 

Gross receipts

• Gross receipts represent the organization's total receipts before expenses are deducted.
• This distinction matters because eligibility to file Form 990-N is generally based on gross receipts rather than gross income.
• Confusing these terms can easily lead to an incorrect filing conclusion.

Questions every tax professional should ask

When advising a foreign exempt organization, consider these questions before concluding that no filing is required.

• Is the organization recognized as tax exempt under §501(a)?
• Is it a private foundation or supporting organization?
• What U.S.-source income did it receive?
• Were its U.S. activities temporary or ongoing?
• Is any income effectively connected with conducting a U.S. trade or business?
• Does a statutory, regulatory or administrative filing exception apply?
• If Form 990 is not required, is Form 990-N still required?

Don't let the final whistle end your analysis

The conclusion of the World Cup doesn't signal the end of the filing conversation. Instead, it provides a timely reminder that Form 990 filing decisions should never be based on assumptions.

Most exempt organizations that fail to file a required Form 990-series return or annual notice for three consecutive years automatically lose their tax-exempt status under §6033(j). Reinstatement can be costly and time-consuming, making it critical to determine filing obligations correctly the first time. Whether you're advising domestic or foreign exempt organizations, NATP provides the resources you need to confidently navigate complex Form 990 filing requirements.