WASHINGTON – U.S. Sens. Chuck Grassley (R-Iowa) and Orrin Hatch (R-Utah) today requested specific information from the Internal Revenue Service (IRS) regarding their oversight activities of nonprofit hospitals. The senators, in a letter, asked Acting IRS Commissioner David Kautter for details regarding the agency’s monitoring and enforcement practices of the entities.

“Hospitals are an integral part of their communities and we commend these entities for the work they perform to ensure access to high-quality, affordable care,” the senators wrote in a letter. “We also recognize that hospitals often use their resources for items not often accounted for in basic financial reports, such as reinvesting in new models of care and supporting medical research. Given the importance of these institutions to their communities, and the forgone federal revenue associated with their tax-exempt status, it is important that both Congress and the IRS conduct oversight to ensure their activities are in line with the benefits they enjoy under the Internal Revenue Code (IRC).”

Recent media reports brought forward questions about whether some nonprofit hospitals were meeting the criteria for tax-exempt status, serving their communities appropriately and serving individuals in need regardless of ability to pay.

This letter complements one sent by Hatch earlier this year examining how the credit union industry has evolved in ways that may potentially compromise the need for their tax-exempt status. It also expands on a Grassley-led investigation on hospitals, which resulted in the IRS implementing reforms aimed at increasing transparency.

Full text of the letter is available here

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