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IRS Tax Issues for Tax-Exempt Healthcare Organizations
A Special Thank

The Internal Revenue compensation >$1 million zations and their tax advisers waited for You to the January
Service (IRS) December • A 21% Federal excise further interpretation and guidance from
2017 Tax Cuts and Jobs tax on excess parachute pay- the IRS relating to these new tax rules. In
Act created a number of ments December of 2018, the IRS released the 2019 Host of the
new tax laws applicable • Unrelated business tax- following Notices:
to Internal Revenue able income (and potential • Notice 2019-09 relating to excise tax South Florida
Code Section 501(c)(3) 21% Federal tax) for certain on compensation >$1mllion and excess
tax-exempt organiza- types of qualified trans- parachute payments Healthcare
tions, including hospi- portation benefits and costs • Notice 2018-99 relating to parking
tals and medical centers, associated with certain types expenses and taxable fringe benefits
physician entities, nurs- of employee parking • Notice 2018-100 relating to under- Networking Group
ing homes and other tax- arrange ments payment relief
exempt healthcare enti- Any Federal excise taxes
ties. The effective date of BY SCOTT J. MARIANI, attributable to excess com- Withum Recommendation
these new tax laws is an JD pensation >$1million and/or Outlined above are only some of the
entity’s first year begin- excess parachute payments new tax rules and regulations and major
ning after December 31, 2017; for exam- are due to the IRS on or before the 15th highlights as a result of the 2017 Tax
ple as follows: day of the fifth month following the close Cuts and Jobs Act. All Internal Revenue BOCA RATON
• January 1, 2018 – December 31, of an organization’s year. The informa- Code Section 501(c)(3) tax-exempt
2018 for calendar year end entities; tion and taxes due will be reported annu- organizations should form an internal REGIONAL
• July 1, 2018 – June 30, 2019 for June ally on a Form 4720. working group, prepare a written time- HOSPITAL
30th fiscal year end entities; and Any unrelated business income taxes line and workplan and perform a gap
• October 1, 2018 – September 30, due attributable to qualified transporta- analysis for tax compliance purposes
2019 for September 30th fiscal year end tion benefits and/or parking are due to with these new rules and regulations. For information about
entities. the IRS on or before the 15th day of the Thereafter, remediation efforts and
An exception to the above relates to fifth month following the close of an changes should be implemented by tax- our next meeting of
qualified transportation benefits and organization’s year. The information and payers. SFHNG,
parking which is effective for all organi- taxes due will be reported annually on a
zations starting January 1, 2018. Form 990-T. Moreover, quarterly esti- For more information, contact Scott J. please email
A number of these new tax laws for mated tax payments may need to be Mariani, JD, Partner and Healthcare charles@
Internal Revenue Code Section made to the IRS prospectively in order to Practice Leader, WithumSmith+Brown,
501(c)(3) tax-exempt organizations eliminate any underpayment of estimat- CPAs, at (973) 868-8124 or southfloridahospitalnews.com
include the following: ed tax and interest being assessed. smariani@withum.com or
• A 21% Federal excise tax on excess Throughout 2018, tax-exempt organi- visit www.withum.com.

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South Florida Hospital News southfloridahospitalnews.com February 2019 5