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Hospitals and Community Benefit - Interim Report

The Internal Revenue Service released an interim report, with executive summary, summarizing responses to a questionnaire about how tax-exempt hospitals provide and report benefit to the community. Providing community benefit is required for hospitals to be tax-exempt charitable organizations under section 501(c)(3) of the Internal Revenue Code.

The report contains preliminary findings on how hospitals, one of the largest components of the tax-exempt sector, responded to questions about how they provide community benefit and meet required standards. The IRS continues to analyze the data and work continues on assessing executive compensation paid by non-profit hospitals.

The report determined that a lack of uniformity in definitions and reporting called for a separate schedule for hospitals on Form 990, the annual return filed by tax-exempt organizations. As a result, the recently released discussion draft of that form includes a new Schedule H, where hospitals will report how they provide community benefit. For more information about the draft redesigned Form 990, visit the IRS Web site, irs.gov.

Additional information will be made available as the IRS completes its analysis on both the the community benefit and executive compensation aspects of the project. [Note:  See Final Report for the IRS' analysis of the completed hospital project.]

Additional information

Page Last Reviewed or Updated: 02-May-2013