In general, a hospital organization’s failure to meet the requirements of Section 501(r) with respect to one or more hospital facilities it operates may result in revocation of the organization’s tax-exempt status as an organization described in Section 501(c)(3). Such loss of tax-exempt status could also result in the loss of exempt status of the hospital organization’s tax-exempt bonds. However, a hospital organization may continue to be recognized as described in Section 501(c)(3) based on the relevant facts and circumstances, even though it has not technically met all the requirements of Section 501(r). In a multiple-facility hospital organization, a Section 501(r) failure by one or more of the hospital facilities within the system may result in the taxation of each noncompliant facility's income, in lieu of revocation of the hospital organization’s tax-exempt status. A hospital organization reports and pays this income tax on Form 990-T, Exempt Organization Business Income Tax Return. The application of the tax does not, by itself, result in the noncompliant hospital facility being considered an unrelated trade or business for the hospital organization. Therefore, it will not by itself affect the tax-exempt status of bonds issued to finance the noncompliant hospital facility. A hospital organization’s exempt status will not be affected by minor omissions and errors that are either inadvertent or due to reasonable cause, as described in Treasury Regulation Section 1.501(r)-2(b), or excusable failures that are neither willful nor egregious, as described in Treas. Reg. Section 1.501(r)-2(c). See Revenue Procedure 2015-21, for guidance on correction and disclosure procedures under which such failures will be excused. Failures to meet the CHNA and implementation strategy requirements under Section 501(r)(3) in any tax year will result in a $50,000 excise tax being imposed with respect to each noncompliant hospital facility within the hospital organization under Section 4959. This tax applies even if the hospital organization loses its tax exempt-status due to this failure. A hospital organization reports and pays this excise tax on Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code.