Under the Patient Protection and Affordable Care Act, a hospital organization seeking to become or remain tax-exempt must conduct a community health needs assessment at least once every three years and adopt a strategy to meet the needs identified in the process. If a charitable hospital organization doesn’t meet those requirements in any taxable year, it’s subject to a $50,000 tax, according to the IRS. For example, a hospital organization that didn’t conduct a community assessment in 2013 and also did not do an assessment in 2011 or 2012 will have to pay the tax for 2013.
Under the proposed and temporary IRS rules, hospitals liable for the tax must file Form 4720 by the 15th day of the fifth month after the end of the taxable year in which they incurred the tax. Additionally, the hospital organization must pay the tax when it files the form.
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