On August 14, the IRS released final, temporary, and proposed regulations under §4959 for excise tax on hospitals that fail to meet the community health needs assessment (CHNA) requirements under §501(r)(3). In Treasury Decision 9629, the IRS stated that these organizations have to file Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code, by the 15th day of the fifth month after the end of the organization's taxable year in which the liability was incurred.

In the temporary and final regulations, the IRS provided an example of a hospital organization reporting on a calendar year basis that failed to meet its CHNA requirement under §501(r)(3) by December 31, 2013. According to the regulations, the organization would have to file Form 4720 and pay the §4959 excise tax due by May 15, 2014.

The IRS previously proposed regulations (REG-130266-11) in June 2012 dealing with the CHNA requirements of §501(r)(3) and the related excise tax, however, those regulations did not address filing a return with the payment of the §4959 excise tax.

The temporary and final regulations are effective August 15, 2013, the date they were scheduled to be published in the Federal Register, and are scheduled to expire on or before August 12, 2016.

The text of T.D. 9629 also serves as the text of proposed regulations (REG-115300-13) on charitable hospital excise tax payments under ACA. Comments on the proposed regulations or requests for a public hearing are due by November 13, 2013.

Tara Jackson, J.D., LL.M.  

Bloomberg BNA Tax Law Editor

Estates, Gifts and Trusts Group