4. With the development of more ACOs, what is the outlook on further review and exemptions/waivers issued related to the current Stark, anti-kickback statutes and IRS requirements?
The IRS continues to be interested in joint ventures between tax-exempt hospitals and for-profit organizations, physician groups included. Form 990 asks about joint ventures and written policies or procedures relating to these joint ventures, and asks if there are revenue sharing arrangements with people or companies with ties to the filing organization. These issues received considerable scrutiny by the IRS back in the 1990s, and we anticipate that the IRS will be closely monitoring new developments and arrangements.
5. What are you hearing from the IRS about expected audit and enforcement activity in this area?
The IRS's 2011 Annual Report and 2012 Workplan released in April indicate that the Service will be reviewing community benefit activities of each hospital as mandated by the PPACA. These reviews are done by the Review of Operations group and do not involve contacting hospitals, but it's possible there will be some hospitals that are referred to other IRS departments for a closer look. Every hospital's return is expected to be reviewed over the 3-year period that began in March 2011.
As of August 15, the first extended due date for Forms 990, 990-EZ, and 990-PF for those with a year end of December 31, 2011 arrives. For those who haven't filed yet for 2011, it's time to do so.
For financial leaders, Form 990 and 990 Schedule H are tax regulations that must be closely watched, as they do impact tax status. Unfortunately the guidelines for this tax regulation are not yet set in stone and the IRS is refining subsections which can influence how an organization operates. CFOs should check periodically for updates on changes to Form 990 and 990 Schedule H by watching the IRS website.