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Vague and Outdated Guidance Creates Challenges for Tax-Exempt Hospital Oversight

Report Information

Date Issued
Report Number
2025-100-019
Report Type
Audit
Joint Report
No
Agency Wide
Yes (agency-wide)
Questioned Costs
$0
Funds for Better Use
$0
View Report

Recommendations

The Commissioner, TE/GE Division, should share this report and recommendation with the Department of the Treasury Office of Tax Policy to consider a legislative proposal to amend I.R.C. § 501 and any other required provisions of law to clearly and specifically define community benefit, including the level of services and activities that are sufficient to meet the community benefit standard in the current industry.

The Commissioner, TE/GE Division, should share this report and recommendation with the Department of the Treasury Office of Tax Policy to consider a legislative proposal to amend I.R.C. § 501 and any other required provisions of law to establish baseline criteria for tax-exempt hospital FAP eligibility.

The Commissioner, TE/GE Division, should update processes to ensure the proper identification and review of all tax-exempt hospitals subject to a CBAR.

The Commissioner, TE/GE Division, should update guidance to include reasons for excluding dual status governmental unit and certain church-affiliated hospitals from the CBARs because they are statutorily mandated.