IRS revokes hospital's tax-exempt status

The Internal Revenue Service recently determined a hospital no longer qualified for a tax exemption after selling its assets, according to Law360.

The IRS posted a letter to its website Jan. 23, explaining why it revoked the hospital's tax-exempt status. The letter redacted the hospital's name and other identifying information.

According to the letter, the hospital, which had been tax-exempt since the 90s, sold its assets in recent years. The IRS revoked the tax-exempt status of the hospital because it failed to establish it operated exclusively for an exempt purpose after the asset sale, according to the letter.

After the sale, all medical services were provided by the successor organization, and the hospital "did not operate as a corporate entity and ceased to have an exempt purpose," states the letter.  

The IRS said the hospital did not correctly terminate its tax-exempt status after the sale, and its board failed to file articles of dissolution with the state.

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