Special report on taxation. Prepare for impending legislation that could threaten your tax-exempt status!

With impending federal action, and the likelihood of "copycat" legislation at the state and local levels if a federal statue is adopted, nonprofit hospitals need to ensure that they will be in compliance if a mandatory charity care bill were to become law. Such facilities should take the initiative now, by clearly articulating their charity care policies and by describing their other undercompensated or uncompensated activities that are maintained in order to benefit their communities. They should also ensure that all of their activities that could be counted as charity care or community benefit are fully documented and quantified. Financial consultants and counsel may be helpful in this process. Exempt facilities also should, of course, closely monitor the progress of the bills discussed above. Most importantly, they should continue to test their charity care and community benefit statistics on a regular basis to determine if their facilities meet the thresholds specified in the bills as they proceed through Congress.