IRS Softens Stance on Penalties for Hospitals Failing to Fulfill Local Needs

For over 50 years, Bloomberg BNA’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...

The Internal Revenue Service will not consider it a failure of tax-exempt hospitals to meet new community health needs assessments required by law if the errors were minor, inadvertent, and due to reasonable cause, according to proposed rules (REG-106499-12) released April 3.
Tax-exempt hospitals and their representatives had asked the IRS to explain what the consequences would be if they did not meet the new requirements of tax code Section 501(r).
The guidance also said that errors or omissions that are neither willful nor egregious will be excused if the hospital facility corrects them and provides disclosure that is reasonable and appropriate.