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As the IRS turns its focus from educating not-for-profit hospitals about Section 501(r) of the Internal Revenue Code (IRC) to enforcing compliance, hospitals can help avoid costly penalties, exam costs, and reputational damage by taking time to verify compliance and build processes to remain compliant over time.
Recent examinations have highlighted errors, omissions, and failures, which can lead to excise tax assessments or possible loss of tax exemption. With final regulations in effect since 2016, it's critical your company is aware of common exam findings so it can avoid similar issues.
Verifying your hospital's compliance isn't only about fixing current problems; it's also about making sure your organization has the internal controls and processes in place to monitor compliance over time - including coordination of different departments that contribute to Section 501(r) compliance.