Expect More Hospital Audits: Schedule H to Form 990 and IRS Exam Issue Codes for Tax-Exempt Hospitals to Be Clarified Following GAO Report
This Briefing is brought to you by AHLA’s Tax and Finance Practice Group.
- October 29, 2020
- Michael N. Fine , Wyatt Tarrant & Combs LLP
About 30 days ago, the U.S. Government Accountability Office (GAO) published a report entitled Tax Administration: Opportunities Exist to Improve Oversight of Hospitals' Tax-Exempt Status that assesses the Internal Revenue Service’s (IRS’) (1) oversight of how tax-exempt hospitals provide community benefits, and (2) enforcement of requirements related to tax-exempt hospitals included in the Affordable Care Act (ACA). The report was released publicly on October 19, 2020.
The GAO report concludes that the IRS does not have a well-documented process to ensure or demonstrate it is consistently reviewing the community benefits provided by tax-exempt hospitals. For its part, the IRS largely agrees with the GAO’s recommendations and will work to clarify Schedule H to the Form 990 and its exam issue codes for tax-exempt hospitals. As a result, we can expect more hospital audit activity.
ARTICLE TAGS
You must be logged in to access this content.