Nonprofit Hospitals’ Community Benefits Come Under IRS Scrutiny

The IRS is getting granular in its look at whether tax-exempt hospitals are living up to their requirement to meet community benefit standards, examining whether nearly three dozen such institutions are providing a broad, loosely defined range of services.

The agency raised questions last month when it announced it will audit 35 tax-exempt hospitals this fiscal year as part of a stepped-up focus on the sector. The IRS has not historically gone after tax-exempt hospitals for their compliance of community benefit requirements. But after a $60 billion infusion from the Democrats’ 2022 tax-and-climate law, plus congressional pressure to apply greater ...