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At least 19 recordsLinked to original sources
PubMed2000

Alternative funding policies for the uninsured: exploring the value of hospital tax exemption.

The tax exemption accorded private, nonprofit hospitals is being subjected to more scrutiny as the numbers of uninsured grow; meanwhile, charity care competes with market-driven priorities. Current public policies tie hospital tax exemption to the provision of charity care, but there is a gap in the size and distribution of values between tax exemption and the charity care that is provided. Most hospitals, in a study reported here, provided free care at a level below the value of their tax exemption, even when 50 percent of bad debt was included in the care value. However, hospitals in the poorest communities offered considerably more care than the value of their tax exemption, whereas those in wealthier communities offered considerably less. Policies at local, state, and federal levels should be designed to exert leverage on hospitals to provide free care at a level commensurate with the value of their tax exemptions.

Health Policy↗
PubMed2002

Healthcare organizations and the Internet: impact on federal tax exemption.

Tax-exempt healthcare organizations have turned to the Internet as a powerful tool in communicating with the public, medical staff, and patients. Activities as diverse as providing links to the Web sites of other organizations, selling goods and services, soliciting contributions, and hosting forums on the Internet raise unresolved questions concerning the impact of Internet use on such organizations' tax-exempt status. The Internal Revenue Service has provided no guidance to date regarding the manner in which a nonprofit organizations' use of the Internet may affect its tax-exempt status or subject it to federal income tax on some sources of funds. This article suggests analytical approaches for applying existing law in the Internet context and identifies areas that are ripe for additional guidance.

Commerce↗
PubMed2003

Revocation of tax-exempt status, excise taxes, and other intermediate sanctions issues, plus income taxes: how the rules have changed after Caracci v. Commissioner.

This Article discusses Caracci v. Commissioner, in which the Tax Court imposed intermediate sanctions based on its finding that insiders caused three applicable tax-exempt organizations to sell assets to three for-profit entities owned and controlled by those same insiders. It explores the standards enumerated in Caracci, hypothesizes as to the pending appeal, and examines the guidance given by the decision's clarification of the intermediate sanctions provisions of the Internal Revenue Code.

Entrepreneurship↗
PubMed1990

The conundrum of charitability: reassessing tax exemption for hospitals.

Tax exemption is an ancient, honorable and expensive tradition. Tax exemption for hospitals is all of these three, but it also places in sharp focus a fundamental problem with tax exemption in general. Organizations can retain their tax exemption while changing circumstances or expectations undermine the rationale that led to the exemption in the first place. Hospitals are perhaps the best example of this problem. The dramatic changes in the health care environment have eliminated most of the characteristics of a hospital that originally persuaded the citizenry to grant it an exemption. Hospitals have entered into competition with tax-paying businesses, and have increasingly behaved like competitive actors. Such conduct may well be beneficial, but it does not follow that tax exemption is appropriate. Rather than an undifferentiated subsidy, a shift to focused goals will provide charitable hospitals with the opportunity and incentive to "do the right thing."

Community Participation↗
PubMed2002

The IRS and the Internet: new issues for tax-exempt organizations.

Tax-exempt healthcare organizations increasingly are using the Internet to provide an inexpensive, easily accessible forum for information exchange, organization publicity, and community-relations programs. A tax-exempt organization that engages in certain activities on its Web site, however, risks losing its tax-exempt status. Such activities may include political messages and lobbying, substantial advertising and other revenue-generating programs, and inappropriate solicitation of charitable contributions. Therefore, providers should carefully monitor all information on their Web sites, including hyperlinks to other Web sites, chat-room and bulletin-board content, and advertisements, to make certain they comply with IRS rules.

Advertising↗
PubMed1994

The IRS looks closely at homes for the aging. Organizations must be prepared to face increased scrutiny on tax-exempt status and financing.

Tax-exempt status has long been perceived as appropriate for the traditional retirement home (i.e., congregate housing and life-care facility), which serves the elderly and typically experiences low profit margins. An organization that is both organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes or for testing for public safety may qualify for tax-exempt status under Internal Revenue Code section 501(c)(3). The Internal Revenue Service uses the generic term "homes for the aging" to include all forms of retirement housing facilities (except nursing homes that solely provide the highest level of nursing care). A home for the aging that qualifies under section 501(c)(3) (through satisfaction of the organizational and operational tests) will qualify for charitable status for federal tax purposes if it operates to satisfy the following basic needs of aged persons: suitable housing, healthcare, and financial security. In general, not-for-profit organizations recognized as exempt under code section 501(c)(3) may be eligible for tax-exempt financing to develop a home for the aging through the issuance of tax-exempt bonds. Effective tax-exemption planning is a necessary part of the business planning process by sophisticated not-for-profit organizations that own and operate (or desire to own and operate) charitable homes for the aging and similar housing facilities serving the elderly. The benefits of exempt status remain attractive for many such organizations. The challenge of obtaining and maintaining that status is becoming far more burdensome.

Aged↗
PubMed1993

Deferred compensation for tax-exempt entities.

Many executives in tax-exempt organizations, including healthcare executives, find their tax-advantaged savings opportunities dramatically reduced today compared to previous years. The benefit of employer-sponsored, "qualified" retirement and savings programs has been severely limited by ever-increasing tax restrictions on such plans when they are offered by tax-exempt organizations. And the opportunity for tax-sheltered personal investments has virtually disappeared. One of the last remaining opportunities for tax-advantaged savings in tax-exempt organizations is an employer-sponsored, non-qualified, deferred compensation plan, an option that appears increasingly attractive in light of the recently enacted increased personal tax rates.

Financial Management↗
PubMed1991

Tax-exempt challenges warrant hospitals' attention.

The tax-exempt status of not-for-profit healthcare organizations is being questioned and sometimes challenged on Federal, state, and local fronts. While the Internal Revenue Service (IRS) has created a special program for randomly auditing not-for-profit organizations, Congress is expected to consider legislation that would mandate the amount of charity care and community benefits a tax-exempt hospital must provide in relation to its tax-exemption value. Familiarity with IRS and Congressional activity, as well as with cases in which a hospital's tax-exempt status has been challenged in court, may provide guidelines for hospitals to assess their vulnerability.

Commerce↗
PubMed1999

Ambulatory surgery center joint ventures involving tax-exempt entities.

This article provides an overview of the tax-exempt related issues for ambulatory surgery center joint ventures involving tax-exempt entities. The article analyzes the key points of analysis of the guidance released by the IRS, in particular General Counsel Memorandum 39862, Revenue Ruling 98-15, and Redlands Surgical Services v. Commissioner of the Internal Revenue Service. These key points include whether the venture results in private inurement to insiders and whether the venture furthers the charitable purposes of the tax-exempt entity. The article also provides practical guidance to analyze the documents and structure of the joint venture to ensure compliance with the IRS guidance. These practical considerations include, among other things, whether the charitable purposes of the tax-exempt entity are clearly expressed in the documents and whether the tax-exempt entity has sufficient control over the joint venture to ensure the charitable purposes are being adhered to.

Charities↗
PubMed1982

New tax law hobbles tax-exempt hospitals.

The Economic Recovery Tax Act of 1981 left tax-exempt hospitals at a significant disadvantage in the competition for capital. Although the new law's accelerated depreciation schedules and liberalized investment tax credits contain some marginal benefits for tax-exempt hospitals, these benefits are probably more than offset by the impact of the law on charitable giving.

Capital Financing↗
PubMed1997

Tax-exempt/proprietary partnerships: how the deal gets done.

Joint venture partnerships between tax-exempt healthcare providers and proprietary companies represent a type of provider-sponsored network. Tax-exempt /proprietary partnerships can help tax-exempt providers attain their strategic objectives and, at the same time, retain some governance involvement and healthcare decision-making authority. Proprietary companies that enter into such partnerships are able to expand their market presence and revenue potential without spending capital on an acquisition. Proprietary companies also gain the tax-exempt partners' goodwill, which could take them years to develop on their own. Before negotiating a partnership agreement, potential partners must assess their respective financial, cultural, organizational, and strategic strengths and weaknesses as well as their overall compatibility. Then they must develop contract terms to bring into the partnership negotiations. These terms include purpose, legal structure, assets/liabilities, governance, management, valuation, profit/loss sharing, capitalization/working capital, human resources, withdrawal from the partnership, noncompete covernants, and tax exemption issues.

Capital Financing↗
PubMed2004

Champaign County, Illinois, gets hospital industry's attention by revoking property tax exemption of local catholic hospital [interviewed by Stan Jenkins].

A property tax exemption is not necessarily permanent: Certain responsibilities are conferred along with tax-exempt status. If those responsibilities are not met, the tax exemption may be revoked. An interview with Stan Jenkins, Chairman of the Champaign County Board of Review, explains the rationale behind revocation of the property tax exempt status of a local charitable hospital, which may have far-reaching implications for others in the healthcare industry.

Catholicism↗
PubMed1988

Tax exemption: why not-for-profits deserve it.

Not-for-profit healthcare facilities' tax-exempt status is coming under attack, particularly in congressional hearings on the unrelated business income tax. Therefore tax-exempt providers must keep adequate records of all services and expenditures to demonstrate and preserve their exempt nature. A facility qualifies for tax exemption by demonstrating that it is legally organized to achieve its exempt purpose and that the bulk of its activities is directed toward that goal. The exemption indicates an agreement between the government and the facility: The government is willing to forgo collection of the tax due because the facility performs tasks that would otherwise befall the government, in particular, caring for the indigent. In addition to such care, other social goods flowing from tax-exempt healthcare facilities include their responsiveness to the needs of the nation, their desire to benefit the community, the medical training they provide, and their role as outlets for philanthropy. Before great changes are made in the unrelated business income tax, tax-exempt facilities must make legislatures and the public aware of the vital services they provide.

Charities↗