Episode 6: IRS exams of tax-exempt hospital UBTI losses

Today’s podcast episode explores recent IRS scrutiny around UBTI losses for tax-exempt hospital systems and recommendations for hospitals who begin to get questions from the IRS about their allocation of expenses between related and unrelated business activities or their profit motive in carrying out the unrelated activities.

Topics addressed include:

• Current state of IRS guidance on how expenses are allocated between related and unrelated business activities for purposes of calculating UBTI losses.
• Recent IRS enforcement activities surrounding hospital net operating losses.
• Recommendations for hospitals systems that begin to get questions from the IRS regarding their allocation methods or profit motive.

To read the Bloomberg Tax article on how the IRS is undertaking a compliance strategy for hospitals with unrelated business income, please click here.