Vague and Outdated Guidance Creates Challenges for Tax-Exempt Hospital Oversight

Date Issued

Thursday, May 15, 2025

Submitting OIG

Treasury Inspector General for Tax Administration

Agencies Reviewed/Investigated

Internal Revenue Service

Report Number

2025-100-019

Report Type

Audit

Agency Wide

Yes

Number of Recommendations

Questioned Costs

Funds for Better Use

Report updated under NDAA 5274

Open Recommendations

This report has 4 open recommendations.

Recommendation Number	Significant Recommendation	Recommended Questioned Costs	Recommended Funds for Better Use
1	No	$0	$0
The Commissioner, TE/GE Division, should share this report and recommendation with the Department of the Treasury Office of Tax Policy to consider a legislative proposal to amend I.R.C. § 501 and any other required provisions of law to clearly and specifically define community benefit, including the level of services and activities that are sufficient to meet the community benefit standard in the current industry.
3	No	$0	$0
The Commissioner, TE/GE Division, should update processes to ensure the proper identification and review of all tax-exempt hospitals subject to a CBAR.
2	No	$0	$0
The Commissioner, TE/GE Division, should share this report and recommendation with the Department of the Treasury Office of Tax Policy to consider a legislative proposal to amend I.R.C. § 501 and any other required provisions of law to establish baseline criteria for tax-exempt hospital FAP eligibility.
4	No	$0	$0
The Commissioner, TE/GE Division, should update guidance to include reasons for excluding dual status governmental unit and certain church-affiliated hospitals from the CBARs because they are statutorily mandated.