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IRS Issues Final Regulations for Charitable Hospitals

Congressional scrutiny of tax-exempt hospital organizations arose as the distinction between tax-exempt and for-profit hospitals has been diminished by the federal government’s provision of Medicare and Medicaid to cover services that tax-exempt hospitals previously provided for free. The overhaul of the healthcare system has brought even more Congressional scrutiny, requiring hospital organizations to be very proactive in ensuring they continue to meet the original requirements for tax exemption, as well as new more rigorous requirements.

The Affordable Care Act (“ACA”), enacted March 23, 2010, added new requirements for Section 501(c)(3) organizations that operate one or more hospital facilities (hospital organizations). On a facility by facility basis, each hospital facility is required to meet the following four general requirements: More…