As we have previously reported, the 2010 Health Care Reform Act imposed new, specific requirements for hospitals to maintain their Section 501(c)(3) tax-exempt status.
IRS Advisory Committee on Tax Exempt and Government Entities Recommends Significant Changes
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Last week, the IRS Advisory Committee on Tax Exempt and Government Entities (“ACT”) held a public meeting at which the panel submitted its latest round of recommendations to senior IRS executives. At the meeting, the ACT’s Exempt Organizations project team presented a report containing several recommendations intended to improve the…
Proposed Regulations Limit Executive Compensation and Administrative Costs of New York State-funded Entities
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On May 30, 2012, the public comment period began for proposed regulations issued by thirteen New York State agencies (including the Department of Health, the Office of Mental Health, and the Office of Children and Family Services) seeking to limit the executive compensation paid by, and…
House Ways and Means Oversight Subcommittee Holds Hearing to Review Compliance and Reporting Issues of Tax-Exempt Organizations
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On May 16, 2012, the Oversight Subcommittee of the House of Representatives Committee on Ways and Means, led by Congressman Charles W. Boustany Jr., MD (R-LA), heard testimony from representatives of tax-exempt hospitals, universities and charitable institutions on the current state of compliance and reporting requirements for tax-exempt organizations. …
New York Legislature Rejects Proposal to Grant Health Commissioner Authority to Appoint Board Members and Operators of Not-for-Profit Health Care Facilities
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Earlier this year, Governor Andrew Cuomo proposed changes to the New York Public Health Law which would have given the Commissioner of the Department of Health the power to remove managers of hospitals, diagnostic and treatment centers, and adult care facilities. The Commissioner would have also had the authority to…
Proposed Regulations provide helpful new examples of “program-related investments”
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As repeatedly promised in its work plan, the IRS recently issued Proposed Regulations containing several new examples of investments that qualify as a “program-related investment” (a “PRI”) for purposes of avoiding potential characterization as a “jeopardizing investment,” which could result in the imposition of excise taxes on a private…
New Streamlined IRS Online Search Tool Makes it Easier to Find Information about Tax-Exempt Organizations, Including Whether an Organization Has Ever Been Subject to Automatic Revocation of its Tax-Exempt Status
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The IRS recently unveiled its new streamlined online search tool, Exempt Organizations Select Check (“EO Select Check”), which provides one place where taxpayers can go to find out: (1) whether an organization is eligible to receive tax-deductible contributions; (2) whether the organization has ever been subject to automatic revocation of its tax-exempt status for failing to file a required Form 990, Form 990-EZ or Form 990-N (aka, the “e-Postcard”) for three consecutive years; and (3) whether a small organization has filed the e-Postcard. Previously, taxpayers had to utilize three separate online search sites to find this information (the electronic version of Publication 78 (i.e., the list of exempt organizations eligible to receive tax-deductible contributions), the online Auto-Revocation List and the e-Postcard database).…
New York Attorney General Announces Plan to “Unlock the Full Potential” of Not-For-Profit Organizations
By Yafang Deng on
February 16, 2012 – Attorney General Eric Schneiderman has announced a new reform plan to reduce the regulatory burden on New York not-for-profit organizations while strengthening their governance and accountability.
The Attorney General’s comprehensive plan distinguishes itself from recent proposals to cap not-for-profit executive compensation, emphasizing that improper compensation is not representative of the New York not-for-profit sector as a whole. Instead, the Attorney General seeks a practical approach to assisting not-for-profits in reducing financial strains while maintaining governance best practices.
The plan takes a three prong approach to reform: (1) The Nonprofit Revitalization Act, (2) the “New York on BOARD” initiative, and (3) the “Directors U” initiative.
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Stealth Can Be Good: New Procedure Allows Governmental Entities to Relinquish Section 501(c)(3) Tax-exempt Status
By Elizabeth M. Mills on
A new provision which was slipped in to the annual announcement of procedures for exempt organization determinations and letter rulings provides a way for governmental entities to voluntarily terminate their Section 501(c)(3) status. This is important for governmental hospitals that otherwise could be faced with new exemption requirements and penalties.
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IRS Extends Filing Deadline for Certain Tax-Exempt Organizations
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The IRS has granted an automatic extension for certain tax-exempt organizations to file their annual returns electronically. The extension is being provided because the IRS’s electronic filing system (the “Modernized eFile system” or “MeF”) will not be available for filing Forms 990, 990-EZ, 990-PF, and 1120-POL from January 1, 2012 through February 29, 2012 (the “Suspension Period”). The extension is only available for organizations with filing due dates (whether original or extended) during the Suspension Period (“Affected Organizations”). Ordinarily, organizations with a fiscal year ending August 31 or September 30 would have filing deadlines during the Suspension Period. Under Notice 2012-4, Affected Organizations will automatically be granted an extension of time to file electronically to March 30, 2012.
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