“We don’t see much of a difference between nonprofit hospitals and for-profit hospitals,” said Theresa Pattara, a staff member of the office of Senate Finance Committee (SFC) ranking member Charles E. Grassley (R-Iowa), at an American Health Lawyers Association program on September 12 in Washington D.C.
Grassley believes the Internal Revenue Service (IRS) has the authority to ask questions about governance and management. If challenges to the IRS’s authority to ask such questions continue, the staffer observed, legislation is very likely to be introduced to give the IRS that right more clearly. Grassley is willing to give the IRS whatever it needs to ensure exempt organizations are in compliance with the tax law, Pattara emphasized.
Pattara encouraged nonprofit hospitals to “get their information out there.” She mentioned that it would take a minimum of 15 months for Congress to receive the data after the organizations submit their returns. “We need some way to measure what nonprofit hospitals are doing in terms of charitable care” to entitle them to all the tax breaks they receive. How to “measure” charity care or community benefits is the question, Pattara added.
The IRS continues to wrestle with the way it wants to treat regional health information organizations (RHIOs), Stephen Nash, partner, Holme Roberts & Owen LLP, Denver, Colorado remarked. RHIOs exchange health information electronically across organizations and information systems. The problem for the IRS, according to Nash, is that RHIOs did not exist four or five years ago, there are numerous types, and many have applied for tax-exempt status. The IRS is temporarily shelving the initial review of RHIOs applications for exempt status while in the process of evaluating this new form of organization and developing its analytical framework, Nash reported.
CCH Washington Bureau, Sept. 12, 2008
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