The IRS on February 23 announced that certain tax-exempt hospitals will be granted an automatic three-month extension to file their 2010 Forms 990, Return of Organization Exempt from Income Tax (Announcement 2011-20). The automatic extension applies to Forms 990 with a due date before August 15, 2011; the IRS is also directing affected hospitals not to file before July 1, 2011. The delayed due date applies only to hospitals and not to any other tax-exempt organizations required to file Form 990.
The delay is designed to give the IRS time to make changes to its forms and systems because of additional requirements for charitable hospitals enacted by the Patient Protection and Affordable Care Act of 2010 (P.L. 111-148). That law requires tax-exempt hospitals to perform a community health needs assessment and adopt a strategy to meet community health needs identified by that assessment, to establish a financial assistance policy, and to meet certain requirements limiting its charges and billing and collection activities (Sec. 501(r)).
The filing delay announced by the IRS is automatic: Affected hospitals do not need to apply for an extension. However, the IRS is encouraging new organizations that did not file Form 990, Schedule H, Hospitals, for tax year 2009, and who think they qualify for an automatic extension, to file Form 8868, Application for Extension of Time to File an Exempt Organization Return, to reduce the chance that they will receive a penalty notice from the IRS.
No late-filing penalties will be assessed against a hospital if it files its Form 990 on or before the extended due date. Hospitals may also request a further three-month extension by filing Form 8868. Form 990 is normally due by the fifteenth day of the fifth month after the organization’s accounting period ends (May 15 for calendar-year organizations).