On November 26, 2008, the IRS Exempt Organizations program (EO) released its Annual Report and 2009 Work Plan. The document describes the EO’s accomplishments and the initiatives and projects to be undertaken in the coming year.
The 2009 Work Plan contains several items relevant to tax-exempt hospitals:
- Form 990. The Work Plan notes the accomplishment of the revised Form 990 and states that the EO will work with the members of the nonprofit sector to prepare them for their new filing requirements. The EO explains that as it receives new 990 filings, it will “begin to evaluate the information reported; interact with the regulated community to obtain feedback of any challenges encountered; and assess whether the form is serving its intended purpose.” The Work Plan also indicates that regulations implementing the Form 990 revisions (which were published in September 2008) will be finalized in 2009.
- Hospital Compliance Initiative. This is an on-going compliance initiative. In FY 2007, the EO released an interim report on its nonprofit hospital project that discussed the initial results of a compliance check questionnaire regarding the community benefit issue. The EO notes that the report recommended that it further evaluate the results by obtaining additional research and analyze the differences in community benefit expenditure amounts and types to take into account varying demographics, such as rural and urban communities and hospitals. The Work Plan announces that in FY 2009, the EO will issue a follow-up report discussing the results of its analysis on the community benefit issue, as well as the results of the executive compensation examinations conducted in this project.
- Charitable Spending Initiative. The Work Plan announces a new 2009 initiative regarding charitable spending. In this initiative the EO will begin a long-range study to learn more about sources and uses of funds in the charitable sector and their impact on the accomplishment of charitable purposes. The EO intends to look at fundraising, public contributions, grants, and revenues from related or unrelated trades or businesses, types and amounts of direct and indirect unrelated business income expenses, officer compensation, fundraising expenses, program service activities and the effect each has on funds available for charitable spending. The EO states that the first stage of this initiative will focus on organizations with unusual fundraising levels and organizations that report unrelated trade or business activity and relatively low levels of program service expenditures.