Some hospital officials are still confused by the forms, said Michael Regier, senior vice president of legal and corporate affairs and general counsel and compliance officer for VHA, which purchases supplies for tax-exempt facilities. Hospital leaders are concerned their responses won't satisfy the IRS, Regier said, and that the consequences of providing the wrong information would mean paying thousands of dollars in taxes. “That's clearly the main worry for tax-exempt organizations.”
The groups sent the IRS a 23-page letter with line-by-line comments on the new section of the Form 990's Schedule H. They want that section optional once more in fiscal 2011. Earlier this summer, the IRS made the section of Schedule H optional for fiscal 2010, saying hospitals needed more time to familiarize themselves with the required information and “address any ambiguities arising from the extensive revisions of the form and instructions.”
Making the reporting optional another year would give the IRS time to get the forms right, Regier said. He noted that the groups empathize with the new responsibilities placed on the IRS, and said the agency has been receptive to their suggestions.
The groups outlined their concerns in a previous letter, in which they called the requirements “onerous and redundant” and out of step with President Barack Obama's call to eliminate unnecessary regulations.
The letter also takes issue with a revised section on the form that the groups say has unfairly increased the burden of reporting information “that had no clear relationship to any requirement in the law or that was clearly useful to the public,” referring to a requested accounting of facilities by size and revenue from largest to smallest.
The AHA, HFMA and VHA met with IRS officials earlier this year to share their concerns. The IRS then asked the organizations to share their suggestions to improve the form. Officials from 300 hospitals provided input for the suggestions.
An IRS spokeswoman confirmed receipt of the letter and said officials would “continue to work with stakeholders throughout the process.”
The new law also requires that tax-exempt hospitals conduct and report community health-needs assessments, but not until taxable years starting in 2012. The deadline to submit comment to the IRS is Sept. 23.