The Internal Revenue Service revoked an unidentified hospital’s tax exemption in February for failing to conduct a community health needs assessment, in a sign of possible trouble for other nonprofit health care organizations.
In the letter, which the IRS posted online this month, an IRS official cited the reason for the “adverse determination” revoking the hospital’s tax exempt status as being connected with section 501(r) of the tax code, part of the Affordable Care Act. “You are a hospital organization which failed to comply with the requirements of IRC section 501(r), to conduct a community health needs assessment, adopt an implementation strategy and make it widely available to the public,” said the final adverse determination letter. “Contributions to your organization are not deductible under section 170 of the Internal Revenue Code. You are required to file Federal income tax returns on Form 1120.”
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