This session will outline current Federal and state tax topics, best practices and practical recommendations for integrated healthcare delivery systems, hospitals and other healthcare organizations. Learning Objectives • Describe: o Internal Revenue Service updates o An overview of IRS Code Section 501(r) financial assistance policy and non-compliance issues o Electronic medical records and associated tax issues • Identify Employment Tax matters, including: o W-2 and 1099 updates o Employee retention tax credit update o Compensation and FMV considerations, and Code Section 4960 excise tax >$1M • Interpret Corporate structure planning from a tax perspective o For-profit consolidations o Joint ventures o Limited liability companies o Group exemptions o State sales/use tax considerations • Explain Form 990 community benefit tax-exempt hospital Schedule H updates

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2022 Healthcare Industry
Tax Update

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Presenters
2
Scott Mariani, JD
Partner, Healthcare Practice Leader
smariani@withum.com
973-532-8835
Hayley Shulman, CPA
Senior Manager
hshulman@withum.com
(973) 532-8885
John Smith
Supervisor
jsmith@withum.com
(973) 532-8875

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Agenda
1. Corporate Structure – Tax Considerations
2. Employment Tax
3. IRS Code Section 501(r)
4. Electronic Medical Records
5. IRS Code Section 4960 Excise Tax Remuneration >$1M
6. Community Benefit
Appendix - IRS & TE/GE Update
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PART 1
CORPORATE STRUCTURE
TAX CONSIDERATIONS

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Identification of types of entities within the corporate structure are essential for
both Federal and state tax purposes and for prospective planning!
1. Tax-exempt corporations
2. Taxable corporations
3. Partnerships
4. Limited liability companies
A. Single member LLC – disregarded entity
B. One or more members – taxed as a partnership
C. Sole proprietor
5. S corporations – a tax-exempt Code Section 501c3 corporation should
never utilize in a JV
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Healthcare Entities

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Partnerships are flow through entities and pay no corporate income tax!
We should not be stating things like “the entity is structured as a for-profit” when (1)
your member that is participating in the LLC is a Code Section 501c3 tax-exempt
corporation or (2) both members are Code Section 501c3 tax-exempt corporations.
The IRS takes the position that since the LLC is a flow through entity the members of
the LLC “step into the shoes” of the LLC meaning that the Code Section 501c3 tax-
exempt entities are performing the activity themselves for tax purposes.
As a result, FMV tax-exemption and unrelated business income issues arise.
UBI consideration # 1 - the underlying activity could be unrelated.
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LLC’s Taxed As A Partnership

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Revenue Ruling 98-15; Ancillary healthcare joint ventures between a tax-exempt and
taxable entity.
UBI consideration # 2 - the tax-exempt entity must control the joint venture or UBI
when a FP entity is a member in the partnership or LLC taxed as a partnership.
IRS defines control as either of the following:
1. The tax-exempt entity owns at least 50.1% of the JV.
2. The JV operating agreement contains safeguards which ensure the JV will be
operated in a manner that furthers the tax-exempt charitable purposes of the
tax-exempt entity.
3. Form 990, Part VI, questions 16a and b.
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Joint Ventures

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1. Two unrelated Code Section 501c3 tax-exempt entities that are forming a JV
structure should consider a Code Section 501c3 tax-exempt entity.
2. IRS Notice 2021-56.
3. Members are either Code Section 501c3 tax-exempt entities or governmental
agencies, etc.
4. An acceptable contingency plan if a member is no longer a Code Section 501c3
tax-exempt exempt.
5. Express charitable purposes and charitable dissolution provisions.
6. A better corporate structure for Federal and state tax purposes then a LLC taxed as
a partnership.
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LLCs and Tax-Exemption

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1. States taxes deduction on Form 1040 Schedule A itemized deductions are
limited to a total of $10K.
2. Concept is to elect a business alternative income tax for state tax purposes
which when paid to the state reduces Federal taxable income in the flow
through entity (e.g. LLC taxed as a partnership).
3. The tax remitted to the state is shown on the member’s state K-1 and each
member is entitled to a credit on their respective state income tax return.
This is similar to the member making a quarterly estimated individual
income tax state payment.
4. If a member in the LLC is a Code Section 501c3 tax-exempt entity it receives
a refund from the state jurisdiction.
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Pass Through Entity Tax
also known as SALT Workaround

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1. Assume a surgery center LLC taxed as a partnership with 10 members each are physicians
and the LLC has taxable income of $12M or $1.2M per member.
2. The LLC elects NJ BAIT; the NJ BAIT tax on $12M is approximately $1.2M. The NJ BAIT
payment made by the LLC to NJ reduces Federal taxable income to approximately
$10.8M and each member Federal K-1 is now approximately $1.08M rather than $1.2M.
3. Total Federal income tax savings of approximately $440K (.37% X $1.2M).
4. The NJ BAIT payment is shown on the NJ member tax reporting forms issued by the LLC
and the members take a pro rata credit on their NJ Form 1040 for their portion of the NJ
BAIT tax payment (approximately $120K in this example).
5. In this situation neither the LLC nor the members are “out any cash” as a result of the NJ
BAIT payment.
6. If a tax-exempt hospital was one of the 10 members it would simply receive a refund of
its pro rata share of the NJ BAIT payment (approximately $120K in this example).
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NJ BAIT Example

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Another NJ Pass Through Entity Tax Example
Assumptions:
S Corporation
10 Shareholders; Total comp $3.4M per Shh
Comp is $2.2M per W-2 and $1.2M per K-1
All Shareholders in 37% marginal federal tax bracket
100% Shh $1.2M each per K-1
Compensation Shh Comp
Shareholder Comp 34,000,000 22,000,000
W-2 Wages Reclassifiedto K-1 Income 12,000,000
NJ "BAIT" Payment 1,190,888
Federal Taxable Income 10,809,113
Total Shareholders Federal Tax Savings at 37% times NJ bait tax
Total Shh Savings
440,628
Medicare Tax Savings (EE 2.35%) wages reclassifiedabove
Total Shh Savings
282,000
Medicare Tax Savings (ER 1.45%) wages reclassifiedabove Employer Savings 174,000 Total 2021 Tax Savings
Total Shareholders Federal Tax Savings 722,628
174,000
896,628
Federal Tax Savings Per Shareholder (10 Shareholders) 72,263
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NJ BAIT Example

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Other Structure Considerations
1. Corporate practice of medicine states and tax-exempt PC’s
A. We call these “hybrid” entities
B. Corporate income tax issues
C. Sales and use tax issues
2. Corporate practice of medicine states, taxable PC’s and MSO’s
3. Single member LLC’s
A. Default to disregarded entity treatment
B. Generally treated as a division of its sole member for tax purposes
C. Sales and use tax issues?
i. Depends on the state jurisdiction, e.g. New Jersey
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Choice of Entity Considerations
1. Entity classifications and corporate structures are essential to identify and
understand for tax purposes particularly new entities and business
arrangements.
A. Tax-exempt entity
B. C corporation
C. LLC
2. Federal and state corporate income tax rates and other areas.
3. State sales/use tax considerations.
4. Property / municipality considerations.
5. Pass thru entity opportunity in certain JV arrangements.
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IRS Group Exemption Rulings
1. Generally, allows a group of affiliated tax-exempt organizations to file a
consolidated Form 990. The parent organization (central organization) still files is
own separate Form 990 and its affiliates (subordinate organizations) file a
consolidated Form 990.
2. Advantages include newly formed entities do not have to file a Form 1023
Application For Tax-Exemption but can be added to the group.
3. Disadvantages include each separate organization gives up its own separate tax-
exemption and a group exemption ruling is issued.
4. Schedule H is filed on a consolidated basis.
5. Reduces highest compensated employees to just 5 employees total for all
subordinates; after paid officers and key employees of each organization.
6. Form 990 Appendix E for more reporting requirements.
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IRS Group Exemption Rulings – Notice 2020-36
1. Central organizations would need to meet generally-in order to obtain and
maintain a group exemption: (1) have at least five subordinate organizations to
obtain a group exemption and at least one subordinate organization thereafter;
and (2) maintain only one group exemption.
2. Outlines what constitutes general supervision and control requirement.
3. Additional information must now be submitted to the IRS by the central
organization when it adds a subordinate to the group ruling.
4. Generally, all subordinates in a group exemption must adopt a uniform governing
instrument.
5. Supplemental group ruling information (SGRI) a/k/a annual update letter; that
describes any changes in its subordinates' identities, purposes, or activities at
least 30 days before the close of its accounting period rather than 90 days.
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IRS Group Exemption Rulings Guidance
1. IRS “actively working” on final revenue procedure.
2. Seth J. Groman, attorney in the IRS Office of Chief Counsel stated that the
IRS can’t give a date as to when the final revenue procedure will be issued.
3. Comments received from stakeholders about provisions in the proposed
guidance on transition rules.
4. IRS is in process of reviewing comments and taking into consideration while
finalizing the revenue procedure.
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PART 2
EMPLOYMENT TAX

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CARES Act - Employee Retention Tax Credit
1. Operations are fully or partially suspended during a calendar quarter due to
"orders from an appropriate governmental authority limiting commerce,
travel, or group meetings (for commercial, social, religious, or other
purposes)" due to COVID-19 or (2) significant decline in gross receipts.
2. Qualified wages paid after March 12, 2020, and before January 1, 2021
during the shutdown period (including certain health plan costs).
3. 2020 ERTC maximum of $5,000 per employee.
4. Reported on Form 941-X.
5. Notice 2021-20 replaced FAQ guidance. https://www.irs.gov/pub/irs-
drop/n-21-20.pdf
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CARES Act - Employee Retention Tax Credit
1. Government shutdown orders on a state-by-state basis.
2. Employee furloughs
3. COVID-19 pay code
4. Revenue producing clinical departments
5. Physician offices and other outpatient facilities
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Employment Tax Update
1. The IRS loves audit examinations in this area!
2. IRS focus on worker reclassification
3. Taxability of fringe benefits
4. Audits of the Form 1099-NEC
5. State focus on remote workers
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Form W-9

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IRS Tax Tip 2021-140 (September 2021)
1. Independent contractor vs. employee
 Behavioral control
 Financial control
 Relationship of the parties
2. Voluntary Classification Settlement Program
 An optional program that provides taxpayers with an opportunity to reclassify their
workers as employees for future employment tax purposes.
 The program offers partial relief from federal employment taxes for eligible
taxpayers who agree to prospectively treat their workers as employees.
 Taxpayers must meet certain eligibility requirements and apply by filing Form 8952,
Application for Voluntary Classification Settlement Program, and enter into a
closing agreement with the IRS.
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1099-MISC vs 1099-NEC
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Employment Tax Audits
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1. Are all workers in the same position being treated the same for tax purposes?
2. Department Chairs
3. On-call
4. Form W-2 and 1099 to the same individual
A. An employee “retired” during the year but has “stayed on” part time
B. The cardiologist who cuts the lawn at the hospital on the weekends
5. Stipends during residency before employment
A. W-2
B. 1099
C. Loan – with forgiveness provisions
D. Other physician recruitment and retention agreements

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Best Practices For Limiting 1099 Exposure
1. Form 1099-NEC audits!!!
2. Planning between Form 1099-MISC, Box 6 vs 1099-NEC, Box 1
3. Obtain Form W-9 from all accounts payable payees
4. IRS TIN matching program
5. Annual review of non-1099 required vendors
6. Annual review of both payroll and accounts payable to determine if any
individuals were issued both a Form W-2 and Form 1099-MISC/1099-NEC
7. Maintain/update internal Form 1099-MISC/NEC policy
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- State rules/regulations are changing
- Most states require that employers
should resume sourcing income
based on where the service or
employment is performed.
- Employer considerations:
- Registration: Secretary of state
and/or Division of Taxation
- Reciprocity
- Withholding tax implications
- Unemployment insurance
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Remote Workers

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PART 3
IRS CODE SECTION 501(R);
TAX-EXEMPT HOSPITALS

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IRC Section 501(r)
Continues to be a Focus of the IRS
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1. Compliance Checks/IRS Examinations
2. Senator Grassley – Senate Finance Committee
3. Tax-Exempt Hospitals “Bad Press”

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In the News
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Click here to read the full article.

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In the News
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Click here to read the full article.

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In the News
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Click here to read the full article.

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IRS Enforcement Code Section 501(r)
1. For IRS FY21:
 IRS completed 1,019 501(r) reviews;
 Referred 71 hospitals for examination for possible non-compliance
2. Focus on lack of CHNA and financial assistance policies
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US Nonprofit Hospitals’ Community Health Needs Assessments
and Implementation Strategies in the Era of the Patient Protection
and Affordable Care Act
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1. June 2021 Research letter; JAMA
2. The Study randomly selected 500 of 1,662 non-profit hospitals in the US
3. Reviewed hospitals 990s, downloaded CHNA & IS from hospital websites
4. Results
 412 (84%) CHNAs were identified on the hospital’s website
 331 (75%) Implementation Strategies were identified on the hospital’s website
 229 (60%) has both a CHNA and IS on the hospital’s website
 Mean quality score of 3.2 out of 5 (due to missing required information)

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IRC 501(r) Most Common Mistakes
IRC 501(r)(3)
1. Current and prior CHNA not posted on hospital
website
2. CHNA’s that do not address the impact of actions
taken since prior CHNA
3. Implementation strategy not posted on hospital
website (not required; industry best practice
recommendation)
IRC 501(r)(4)(5) & (6)
1. No reference to AGB/AGB not updated
2. Lack of LEP translations/all required documents
not translated into LEP languages
3. Missing provider listing/provider listing not
updated
4. No reference to billing & collection policy
5. Reference to appendix/exhibits that do not exist
6. Broken website links
7. FAP information not easily found within website
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PART 4
ELECTRONIC MEDICAL
RECORDS

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EMR Financial Assistance to Physicians
1. IRS Memorandum 5/11/2007
2. Consistency between DHHS and IRS regulations
A. Federal anti-kickback law
B. Physician self-referral law
C. Tax-exemption
i. Private inurement
ii. Private benefit
iii. Intermediate sanctions and excise taxes
D. Other tax issues
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IRS Memorandum 5/11/2007
1. Compliance with HHS EHR Regulations on a continuing basis.
2. The Hospital must have access to the EMR created by a physician using the
Health IT Items and Services subsidized by the hospital.
3. The hospital must ensure that the Health IT items and services are available
to all its medical staff physicians.
4. Same level of subsidy to all its medical staff physicians or varies the level of
subsidy by applying criteria related to meeting the healthcare needs of the
community.
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EMR – Other Tax Issues
1. Form 1099 and tax reporting to the physician practice
A. Determining the value of the benefit of the EMR subsidy
B. Total value received vs. the discount (e.g. 85% discount)
2. State sales and use tax issues
A. Hardware
B. Software
C. Technical support
D. Training
E. Installation
F. Troubleshooting
3. Type of entity - C corps, taxable PCs for state purposes; single member LLCs
4. Beware – all states rules and regulations are different!
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In the News
Click here to read the full article.

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1. Advance a charitable purpose;
2. Operate entirely free from private profit motive;
3. Donate or render gratuitously a substantial portion of its services
4. Benefit a substantial and indefinite class of persons who are legitimate
subjects of charity; and
5. Relieve the government of some of its burden.
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Pennsylvania Institutions of Purely Public Charity
Hospital Utilization Project v. Commonwealth, 507 PA 1 (1985) – “HUP test”

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1. Generally, PA REV-72 do not expire; however, charitable, educational, or religious
institutions may need to be renewed every five years.
2. Revenue Ruling 69-545.
3. Form 990 coordination of information and disclosures
A. Compensation and benefits are reasonable and FMV; process and procedures
B. Community benefit narrative information.
C. Schedule H costs information – stand alone v. entire system.
4. Type of entity and what is that entity’s charitable purposes and amount of community
benefit it provides.
A. Hospital
B. Parent entity
C. Affiliate Code Section 501(c)(3)
i. Long term care/assisted living
ii. Supporting organization of another tax-exempt
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HUP Considerations

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PART 5
CODE SECTION 4960
EXCISE TAX
REMUNERATION>$1M

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In The News
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Tax-Exemption and FMV Compensation
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1. What categories of employees receive more than $1 million in
compensation each year?
2. What factors and criteria are utilized to determine the size and scope of the
compensation packages? Who must approve these compensation packages?
3. What non-cash compensation is paid such as health benefits, life and other
forms of insurance and in-kind property?
4. What is the total compensation paid to former employees as part of buyout
agreements?

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Rebuttable Presumption of Reasonableness
1. The arrangement was approved by the organization’s governing body, or a
committee of the governing body composed entirely of individuals who do
not have a conflict of interest with respect to the arrangement;
2. The governing body or committee obtained and relied on appropriate data
as to comparability (internally or externally developed); and
3. The governing body or committee adequately documented the basis for its
determination by the later of the next meeting of the authorized body or 60
days after final approval by the authorized body.

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Code Section 4960 Excise Tax Remuneration >$1M
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IRS Form 4720 – Compliance Check
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1. IRS is checking compliance with Code Section 4960.
2. Issuing Letter 4204; Compliance Check Information Request.
3. Organization reported at least one employee who received remuneration of
$1 million.
4. Necessary actions required to comply.
A. Provide signed copy of Form 4720
B. Reason if filing is not required.
5. Refer case for examination if no response.
6. Compliance Check Information Request also typically includes other items (if
non-compliant): Forms 990-T, 720, 941, etc.

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Withum Best Practices
1. Carefully review and consider Form 990 Part VII listings; officers and key
employees and next 5 highest paid employees
2. What individuals are listed on your website and titles?
3. Senior leadership on an entity-by-entity basis
4. Review direct reports; employee organization chart
5. Transfers of employees from affiliate to corporate positions
6. Employment agreements; what services, job duties and responsibilities and with
what entity
7. Deferred compensation vesting’s schedule by individual by amount by year
8. Include a narrative in Form 990 Schedule O for anyone compensated over $1M in
Part VII for which excise tax has been paid by another entity. Also, exceptions such
as clinical services provided by licensed medical professionals.
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Withum Considerations
1. Vested remuneration, including vested but unpaid earnings accrued on
deferred amounts that is treated as paid before 1/1/2018 is not subject to
excise tax.
2. Split-Dollar life insurance loan arrangement.
A. Employer makes loans to employee to pay the premium on a cash value
life insurance policy owned by employee.
B. Not considered wages and not subject to excise tax.
C. Treated as loans with interested employees; require reporting in Form
990 Schedule L; Part II.
D. Planning potential; conversions of other types of deferred
compensation.
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PART 6
COMMUNITY BENEFIT

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Why is community benefit important?
1. Supports Federal, state and local tax-exempt status.
2. Federal – exempt from income tax; FUTA, issue tax-exempt debt and receive
charitable contributions and grants.
3. State – exempt from income tax and sales/use tax.
4. Local – exempt from property (real estate) taxes.
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Community Benefit

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In the News
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Click here to read the full article.

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In the News
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In the News
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Click here to read the full article.

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1. Revenue Ruling 56-185 – “Charity Care Standard”.
2. Revenue Ruling 69-545 - “Community Benefit Standard” which replaced the
charity care standard.
3. Hospitals are judged on whether they promote the health of a broad class of
individuals in the community.
4. Broad class of individuals in the community and Schedule H categories.
5. There are no numerical thresholds for minimum amount of free or discounted
care for a hospital to receive Federal tax-exempt status.
6. Senate Finance Committee proposed a 5% minimum threshold regarding Form
990 Schedule H, Part I. Did not pass, however, it would have applied a community
benefit analysis; not a charity care analysis.
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Hospitals - Basis for Federal Tax-Exemption

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1. Operates a full-time emergency room and no one requiring emergency care
is denied treatment;
2. Uses surplus funds to improve the quality of patient care, expand its
facilities, and advance its medical training, education, and research
programs;
3. Control of the hospital rests with its board of trustees, which is composed of
independent civic leaders; and
4. Maintains an open medical staff, with privileges available to all qualified
physicians.
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Community Benefit Standard
Rev. Rul. 69-545

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Schedule H - Community Benefit Benchmarking
AHA Report 2018 Forms 990
Hospital Category All Filed 2018 Schedule
Hs[1]
Financial Assistance, Unreimbursed Medicaid,
Unreimbursed Costs From Means-Tested
Government Programs
6.40%
Health Professions Education 1.60%
Medical Research 0.50%
Cash and In-Kind Contributions to Community
Groups
0.30%
Other [2] 1.50%
Total Financial Assistance and Other Community
Benefits
10.30%
[1] National Benchmark Comparative
[2] Includes Subsidized Health Services
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Schedule H – Total Benefits to the Community
AHA Report 2018 Forms 990
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Hospital Category All Filed 2018
Schedule Hs
Financial Assistance And Certain Other
Community Benefits
10.3%
Community Building Activity 0.1%
Medicare Shortfall 3.3%
Bad Debt Expense Attributable to
Financial Assistance
0.4%
Total Benefits To The Community 13.9%

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Schedule H Planning Areas
1. Review of bad debt accounts / revenue cycle review
 What does your Financial Assistance Policy say
2. EMR
3. Telehealth
4. Subsidized Health Services
5. Social Determinants of Health
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1. Economic Stability — Poverty, Employment, Food Security, Housing Stability
2. Education — High School Graduation, Enrollment in Higher Education,
Language and Literacy, Early Childhood Education and Development
3. Social and Community Context — Social Cohesion, Civic Participation,
Discrimination, Incarceration
4. Health and Health Care — Access to Health Care, Access to Primary Care,
Health Literacy
5. Neighborhood and Built Environment — Access to Healthy Foods, Quality of
Housing, Crime and Violence, Environmental Conditions
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Social Determinants of Health

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Increased Focus on Value of Community Benefit &
Tax-Exemption
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States Are Getting Involved In Community Benefit
1. States implementing
mandatory community
benefit reporting.
2. Mandatory minimum
community benefit
spending.
3. Required reports to be
posted on organization’s
website.
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Click here to see Community Benefit Requirements by State.

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Withum Community Benefit Best Practices
1. IRS / CHA community benefit percentage benchmarking.
2. AHA total benefits to the community benchmarking.
3. Utilize a written community benefit statement for other information
A. COVID pandemic
B. Other assessments not included in schedule H e.g. bed tax
C. Real estate taxes, PILOTS and other
D. Utilize NJHA / HAP other similar information
4. Review your community health needs assessment and identify programs,
activities and initiatives and related costs.
5. Quantify the value of your tax-exemption vs. community benefit costs.
6. Board and/or committee involvement.
7. Remember - Federal v state requirements!
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APPENDIX
IRS &TE/GE UPDATE

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What’s
going on at
the IRS?

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IRS Establishes Taxpayer Experience Office
1. Established as part of the effort envisioned in the Taxpayer First Act Report
2. Focus on improving taxpayer service and transactions with the IRS
3. Key activities the IRS will be focusing on include:
 Identifying changing taxpayer expectations and industry trends
 Customer service best practices including:
• Expanding customer callback, expanded payment options, secure two-way messaging and more services for
multilingual customers.
 Promoting a consistent voice and experience across all taxpayer segments
4. Adding staff in the coming months to help support the effort
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National Taxpayer Advocate Report to Congress
FY 21
Processing Backlogs Led to Long Refund Delays
- IRS backlog of 6M unprocessed individual returns (1040); 2.3M
unprocessed amended individual returns (1040-X); over 2M
unprocessed employer quarterly tax returns (941 & 941-X); and
approx. 5M pieces of unprocessed taxpayer correspondence
Telephone Service Was the Worst It Has Ever Been
- Customer service representatives only answered 11% of calls received
The IRS Took Months to Process Taxpayer Responses to Its Notices,
Further Delaying Refunds and in Some Cases Leading to Premature
Collection Notices
- IRS automated systems moved cases in the next step of the
compliance process before correspondence received was able to be
reviewed
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“CY 2021 is the
most challenging
year taxpayers
and tax
professionals
have ever
experienced”

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IRS Rushes to Hire New Employees
1. IRS plans to hire in a push to cut its backlog of tax returns.
2. Entry-level clerical workers to advanced engineers and tax attorneys.
3. Recruiting for high-skill technology professionals to modernize its outdated
infrastructure.
4. Continue audit of partnerships and LLC’s taxed as partnerships.
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IRS Tax-Exempt/Government Entities (TE/GE)
In FY21 hired 120 new employees
a. 75 revenue agents
b. 17 tax examiners
c. 13 analysts
d. 15 other staff
e. Total employees = 1,521
f. 5.1% loss from end of FY20
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Examinations
TE/GE proposed revocations (agreed and unagreed without protest) for 94 tax-
exempt entities as a result of these examinations (up from 36 in the PY)
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TE/GE Compliance Checks
1. Discrepancies between Form W-2, Wage and Tax Statement, and either Form 941, Employer’s
Quarterly Federal Tax Return, or Form 944, Employer’s Annual Federal Tax Return
2. Tax-Exempt Organizations that failed to file:
• Form 940, Employer’s Annual Federal Unemployment Tax Return.
• Form 1041, U.S. Income Tax Return for Estates and Trusts under IRC Section 4947(a)(1).
• Form 990-T, Exempt Organization Business Income Tax Return.
• Form 4720, Return of Certain Excise Taxes under Chapters 41 and 42 of the Internal Revenue
Code, to report and pay excise tax under IRC 4960.
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Tax Exempt
&
Government
Entities
Compliance
Program and
Priorities
https://www.irs.gov/government-entities/tax-exempt-government-
entities-compliance-program-and-priorities#cs
Compliance Strategies:
 Excise Tax on Excess Compensation
 Form W-2 and 1099 to same Payee/Worker Classification
 Form 990-N Filers/Gross Receipts Model
Other Areas of Focus:
 Hospital Organizations with unrelated business income
 Previous for-profit organizations
 Private benefit and inurement
 501(r) Compliance
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