IRS reviewing community benefit expenditures

The Internal Revenue Service has embarked on a review of the community benefit activities of tax-exempt hospitals as specified in the Patient Protection and Affordable Care Act, reports AHA News Now and KPMG.

The healthcare reform legislation requires that the IRS review the community benefit activity of each tax-exempt hospital at least once every three years. The IRS will not notify individual hospitals that are under review, nor will it likely contact the hospitals for information during the course of the review.

The IRS and other organizations have raised concerns in recent years regarding the community benefit activities of not-for-profit hospitals, particularly since standards seem to vary from state to state, and many non-profit hospital executives receive annual compensation in the seven figures. These concerns in part prompted such reviews to be included in the reform legislation.

Although the reviews are not the same as the far more comprehensive "examination," an official with the IRS noted that that information gathered during a review could lead to an examination.

For more:
- Read the AHA News Now article
- Read the KPMG article