DC Tax Flash: IRS Provides CHNA Compliance Relief for Tax-Exempt Hospitals

Tax Alert

The Internal Revenue Service (IRS) today issued Notice 2020-56, which further postpones until the end of this year the deadline for certain hospitals performing any Community Health Needs Assessments (CHNA) requirements. Before today's action, the IRS had previously postponed this deadline until July 15, 2020 under Notice 2020-23.

"Tax-exempt hospital organizations filing Forms 990 must indicate on Schedule H if they have conducted a CHNA in the current taxable year or in either of the two immediately preceding taxable years and if they have adopted an implementation strategy to meet the significant health needs identified through the most recently completed CHNA," the IRS notes. The tax exempt status of these entities can hinge on these requirements, and a $50,000 penalty can be imposed for failing to meet them.

The IRS instructs hospitals that file Form 990 prior to Dec. 31, 2020 to "state in the narrative of Part V.C. of Schedule H (Form 990) that they are eligible for and are relying on the relief provided in the notice."

The five-page text of Notice 2020-56 is posted here

An IRS press release is posted here.

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