Just days before the end of 2014, the IRS released long-awaited final regulations under Section 501(r) for charitable hospitals exempt under Section 501(c)3. These regulations are in response to requirements enacted under the Affordable Care Act and finalize regulations first proposed in June 2012 to hold tax exempt hospitals to a higher standard.
The final regulations not only clarify language but also make several significant changes that both increase and decrease the burden placed on tax exempt hospitals.
Here are 3 key takeaways from the finalized regulations:
Clarity on Government Hospitals and 501 (c)3 Status
Final regulations confirm government hospitals previously recognized as exempt under 501(c)3 are subject to all of the 501(r) regulations. The IRS notes these hospitals can request to voluntarily terminate their section 501(c)3 recognition to avoid being subject to the regulations.
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