The Senate Finance Committee will launch a review of non-profit hospitals and whether they are meeting the formal community benefit standards required to justify their tax-free status.
This subject has long been of interest to committee chairman Chuck Grassley, who has returned as committee chair. He pursued the same question of the hospitals’ non-profit status and community benefit provide while leading the Senate Finance Committee from 2003 to 2007 and also as a member of the committee, although not its chair, in recent years.
In a letter to the commissioner of the Internal Revenue Service, which is responsible for reviewing hospitals’ tax status, Mr. Grassley wrote that
Unfortunately, according to reports, it appears at least some of these tax-exempt hospitals have cut charity care, despite increased revenue, calling into question their compliance with the standards set by Congress.
The letter seeks detailed information about the frequency and outcomes of IRS reviews of non-profit hospitals’ compliance with the community benefit criteria for retaining their non-profit status.