Regulations - How to report, remit payment of CHNA excise tax 

August 14:  The Treasury Department and IRS today released for publication in the Federal Register temporary regulations (T.D. 9629) and, by cross-reference, proposed regulations (REG-115300-13) to clarify that a charitable hospital organization that is liable for the section 4959 excise tax imposed with respect to the hospital’s failure to comply with the community health needs assessment (CHNA) requirements must file Form 4720, Return of Certain Excise Taxes under Chapters 41 and 42 of the Internal Revenue Code, to report its excise tax liability and to accompany payment of the excise tax under section 501(r)(3).

The temporary regulations [PDF 19 KB] also state that the Form 4720 must be filed by the hospital organization liable for the section 4959 excise tax by the 15th day of the fifth month after the end of the organization’s tax year during which the liability under section 4959 was incurred.

Thus, for example, a hospital organization reporting on a calendar year basis and that fails to meet the requirements of section 501(r)(3) by December 31, 2013, must file a Form 4720 and pay the section 4959 tax due by May 15, 2014.

The IRS also today released a draft Form 4720 [PDF 302 KB] for comments. Schedule M on this draft version of Form 4720 concerns the section 501(r)(3) excise tax reporting requirements by hospital organizations


Regulations were proposed in early April 2013 to address the requirement under section 501(r)(3) that charitable hospitals conduct community health needs assessments (CHNAs) and adopt implementation strategies at least once every three years.

The April 2013 proposed regulations [PDF 382 KB] also address certain significant issues relating to section 501(r) generally—including the consequences for failure to satisfy any of the requirements of this section of the Code.

The April 2013 proposed regulations, however, did not include provisions regarding the return that hospitals were to file with their remittance of the excise tax under section 4959 or regarding the due date for filing such a return.

Read an April 2013 report [PDF 129 KB] describing the April 2013 proposed regulations and prepared by the tax professionals with the Exempt Organization practice of KPMG’s Washington National Tax: Proposed regulations address more than community health needs assessments

Comments, request for hearing

Today’s proposed regulations [PDF 61 KB] provide that written comments and/or requests for a public hearing concerning today’s regulations are due by a date that is 90 days after publication in the Federal Register—scheduled for August 15, 2013.

For more information, contact:

Rick Speizman, Partner-in-Charge of KPMG's Washington National Tax Exempt Organizations Tax group

+1 (202) 533-3084

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