August 23, 2023
Senators Ask IRS to Launch Probe of Hospitals’ Tax-exempt Status
A bipartisan group of four U.S. senators has asked the U.S. Treasury Department to investigate whether nonprofit hospitals are abusing their tax-exempt status. “We are alarmed by reports that despite their tax-exempt status, certain nonprofit hospitals may be taking advantage of this overly broad definition of ‘community benefit’ and engaging in practices that are not in the best interest of the patient,” they wrote in a recent letter signed by Republicans Chuck Grassley of Iowa, Bill Cassidy of Louisiana, and Democrats Elizabeth Warren of Massachusetts and Raphael Warnock of Georgia. While this is not the first time that Senator Grassley approaches the U.S. Treasury on the issue of community benefit, this is the first time that members of the Democratic party join the request. The senators are asking the IRS to provide a list of the community benefits provided by hospitals in 2021 and 2022, and how many hospitals have been identified as “at risk” for noncompliance of federal regulations. The lawmakers say they want answers within 60 days. While no Congressional action is expected immediately, we expect further discussions and Congressional hearings on this issue. For a summary of policies currently being discussed, click here.