Chapter 9.B.2: Charitable Tax Exemption

For analysis and critique of the federal position on hospital tax exemption, see Mark Hall & John Colombo, The Charitable Status of Nonprofit Hospitals: Toward a Donative Theory of Tax Exemption, 66 Wash. L. Rev. 307 (1991); Jack E. Karns, Justifying the Nonprofit Hospital Tax Exemption in a Competitive Market Environment, 13 Widener L. J. 383 (2004); Comment, 20 Rev. Litig. 709 (2001); Symposium, 15 Health Matrix 5 (2005); Symposium, 25(4) Health Aff. w287 (Aug. 2006). 

For a good practical overview of federal requirements for hospitals and clinics, including a discussion of joint ventures, see the IRS document Health Care Provider Reference Guide. 

On community benefits, see John Colombo, The Role of Access in Charitable Tax Exemption, 82 Wash. U. L.Q. 343 (2004); Jessica Berg, Putting the Community Back into the “Community Benefit” Standard, 44 Ga. L. Rev. 375 (2010); Michael J. DeBoer, Religious Hospitals and the Federal Community Benefit Standard, 42 Seton Hall L. Rev. 1549 (2012); Mary Crossley, Health and Taxes: Hospitals, Community Health and the IRS, 16 Yale J. Health Pol’y L. 51 (2016); Dan Diamond, How Hospitals Got Richer off Obamacare, Politico, July 17, 2017.

On charity care, see Sayeh Nikpay & John Ayanian, Hospital Charity Care: Effects of New Community-Benefit Requirements, 373 New Eng. J. Med. 1687 (2015); Nancy M. Kane & William Wubbenhorst, Alternative Funding Policies for the Uninsured: Exploring the Value of Hospital Tax Exemption, 78 Milbank Q. 185 (2000); John Colombo, Federal and State Tax Exemption Policy, Medical Debt and Healthcare for the Poor, 51 St. Louis U. L. J. 433 (2007).

Regarding whether nonprofits are superior, see Horowitz, supra, 50 UCLA L. Rev. 1345 (2003); Daniel Fox, Policy Commercializing Nonprofits in Health: The History of a Paradox, 93 Milbank Q. 179 (2015); Kathleen Boozang & Tim Greaney, Mission, Margin and Trust in the Nonprofit Healthcare Enterprise, 5 Yale J. Health Pol’y L. & Ethics 1 (2005); Eleanor D. Kinney, For Profit Enterprise in Health care: Can it Contribute to Health Reform?, 36 Am. J. L. & Med. 405 (2010); George Nation, Non-Profit Charitable Tax-Exempt Hospitals: Wolves in Sheep’s Clothing, 42 Rutgers L. Rev. 141 (2010); David Cutler ed., The Changing Hospital Industry (2000).

On exemption for physicians, see John Colombo, Are Associations of Doctors Tax Exempt? Analyzing Inconsistencies in the Tax Exemption of Health Care Providers, 9 Va. Tax Rev. 469 (1990); Kenneth Levine, Obtaining 501(c)(3) Status for Professional Medical Corporations, 2 DePaul J. Health Care L. 231 (1998).

The following books cover health care tax exemption generally under both federal and state law: John D. Colombo et al., Charity Care for Nonprofit Hospitals (2010); T. Hyatt & B. Hopkins, The Law of Tax-Exempt Healthcare Organizations (2d ed. 2004); Douglas Mancino, Taxation of Hospitals and Health Care Organizations (2d ed. 2005). Federal tax law is further discussed in the sources cited throughout these notes. A very good general treatise is F. Hill & D. Mancino, Taxation of Exempt Organizations (2002). The best practitioner journal is the Exempt Organization Tax Review. For a broad overview of multiple issues, see David Studdert et al., Regulatory and Judicial Oversight of Nonprofit Hospitals, 356 New Eng. J. Med. 625 (2007).