IRS to shine compliance spotlight on exempt hospitals

Healthcare Financial Management, Dec, 2005

Tax--exempt hospitals will be the focus of a new compliance and enforcement initiative, according to IRS FY06 Exempt Organizations Implementing Guidelines released in October. The guidelines state that the Exempt Organizations Compliance Unit is considering a compliance project to determine how hospitals set and pay executive compensation and how they meet the community benefit standards for purposes of section 501(c)(3). The EOCU would send compliance check letters to "a significant number" of hospitals asking them about these and possibly other issues.

Other initiatives for FY06 will address abuses in conservation easements, charitable trusts, and charities that facilitate abusive transactions.

To read the IRS FY06 Exempt Organizations Implementing Guidelines, go to www.irs.gov/pub/ irs-tege/fy_2006_implementing_guidelines.pdf.