In Announcement 2011-20 (the Announcement), the Internal Revenue Service (the IRS) announced that hospital organizations that are required to file Schedule H with their 2010 IRS Form 990 must not file the 2010 Form 990 before July 1, 2011, regardless of whether the hospital organization files an electronic return or a paper return. In addition, the IRS granted an automatic three-month extension of time to file the 2010 Form 990 to tax-exempt hospitals usually required to file their IRS Form 990 for the 2010 tax year before August 15, 2011. This automatic extension of the filing due date does not apply to any other tax-exempt organization required to file Form 990.
The filing delay results from the IRS’s need for more time to implement changes to forms and systems to take into account the new Section 501(r) requirements (including the new community health needs assessment, financial assistance policy, limitation on charges and billing, and collections provisions) enacted as part of the Patient Protection and Affordable Care Act of 2010.
The IRS granted automatic extensions only to tax-exempt organizations that attached Schedule H to their 2008 and/or 2009 Form 990 returns and had tax years ending in the months of December, January, or February (i.e., with Form 990 return due dates in May, June, and July, respectively). These hospital organizations are not required to file IRS Form 8868 (Application for Extension of Time To File an Exempt Organization Return) in order to take advantage of the automatic extension.
Importantly, however, recently formed hospital organizations that did not file Form 990 Schedule H for tax year 2008 or 2009 and that believe they are entitled to the extension of time under the Announcement are encouraged to file IRS Form 8868 (Application for Extension of Time To File an Exempt Organization Return) to reduce the risk that they may incorrectly receive a penalty notice from the IRS.
No late-filing penalties will apply to a tax year 2010 Form 990 (with Schedule H attached) filed by a hospital covered by the Announcement on or before the three-month extended due date. A hospital organization that later determines that it needs additional time beyond the automatic three-month extension period to file its 2010 Form 990 may request an additional three-month extension of time by filing IRS Form 8868, Part II. A hospital organization covered by the Announcement may receive no more than a six-month extension of time to file for its 2010 tax year.
The IRS Announcement is available by clicking here. The FAQs about the Announcement are available by clicking here.