Thursday, November 2, 2017
As reported in the October 23rd edition of Tax Notes, IRS is now reviewing tax-exempt hospitals to ensure their compliance with the §501(r) regulations issued in 2015. At the American Health Lawyers Association meeting on October 19th, a tax law specialist in the IRS Tax-Exempt and Government Entities Division Reviews conveyed that the IRS is uncovering compliance issues regarding the financial assistance policy (FAP) and community health needs assessment requirements. Agents also are inquiring as to whether patients eligible under the hospital's FAP are not excessively billed. In addition, the tax law specialist reported non-contact reviews taking place in 2014 to 2016 resulted in several hundred examinations, most from the absence of required documents on the hospital's website. The specialist also revealed that unrelated business income and excess benefit transactions were also sources for examinations.
(Hat tip: Fred Stokeld at Tax Notes)