irb 2013-21 (rev. may 20, 2013)may 20, 2013 highlights of this issue these synopses are intended...

Bulletin No. 2013-21May 20, 2013

HIGHLIGHTSOF THIS ISSUEThese synopses are intended only as aids to the reader inidentifying the subject matter covered. They may not berelied upon as authoritative interpretations.

INCOME TAX

Notice 2013–30, page 1099.This notice provides a 3-month extension of time to file andpay tax under sections 6081 and 6161 of the Code for thoseindividuals affected by the Boston Marathon explosions.

Notice 2013–31, page 1099.This notice provides adjustments to the limitation on housingexpenses for purposes of section 911 of the Code for specificlocations for 2013. These adjustments are made on the basisof geographic differences in housing costs relative to hous-ing costs in the United States. Notices 2006–87, 2007–25,2007–77, 2008–107, 2010–27, 2011–8, and 2012–19 su-perseded.

Rev. Proc. 2013–25, page 1110.This revenue procedure provides the 2014 inflation adjustedamounts for Health Savings Accounts (HSAs) under section223 of the Code.

EXEMPT ORGANIZATIONS

REG–106499–12, page 1111.These proposed regulations provide guidance to charitablehospital organizations on the community health needs as-sessment requirements, and related excise tax and reportingobligations, enacted as part of the Patient Protection andAffordable Care Act of 2010. These proposed regulations alsoclarify the consequences for failing to meet these and otherrequirements for charitable hospital organizations. Notice2011–52 is obsolete after October 5, 2013.

Announcement 2013–31, page 1135.The IRS has revoked its determination that 21st Century AnimalResource & Education Services of Dolan Springs, AZ, Books forPeople of Yuma, AZ, California Nairobi International ChildrensOrganization of Fresno, CA, Cape Verdean Club of FalmouthInc. of Teaticket, MA, Congressional District Programs, Inc. ofFalls Church, VA, Dr. R.C. Samanta Roy Institute of Science andTechnology, Inc. of Green Bay, WI, Eko Club, Inc. of Houston,TX, Everything Must Change, Inc. of Philadelphia, PA, ExcaliburFoundation of Sparks, NV, Functional Social Solutions, Inc. ofLong Beach, CA, Gateway Educational Services of Honolulu,HI, Good Housing, Inc. of Merrick, NY, Holland Peck CharitableFoundation of Carefree, AZ, Kona University, Inc. of Honolulu,HI, Lakeland-Winter Haven Kennel Club, Inc. of Lakeland, FL,Life Changes Ministries International Inc. of Fort Mill, SC, Mar-ley Fund of Greenville, NC, and Needham Community Theatre,Inc. of Needham, MA, qualify as organizations described insections 501(c)(3) and 170(c)(2) of the Code.

ADMINISTRATIVE

Announcement 2013–30, page 1134.This announcement provides that for payments due in 2013, a2012-2013 fiscal year partnership should pay withholding taxunder section 1446 on effectively connected taxable incomeallocable to foreign individual partners at the rates in effect in2012.

Finding Lists begin on page ii.

The IRS MissionProvide America’s taxpayers top-quality service by helpingthem understand and meet their tax responsibilities and en-

force the law with integrity and fairness to all.

IntroductionThe Internal Revenue Bulletin is the authoritative instrument ofthe Commissioner of Internal Revenue for announcing officialrulings and procedures of the Internal Revenue Service and forpublishing Treasury Decisions, Executive Orders, Tax Conven-tions, legislation, court decisions, and other items of generalinterest. It is published weekly.

It is the policy of the Service to publish in the Bulletin all sub-stantive rulings necessary to promote a uniform application ofthe tax laws, including all rulings that supersede, revoke, mod-ify, or amend any of those previously published in the Bulletin.All published rulings apply retroactively unless otherwise indi-cated. Procedures relating solely to matters of internal man-agement are not published; however, statements of internalpractices and procedures that affect the rights and duties oftaxpayers are published.

Revenue rulings represent the conclusions of the Service on theapplication of the law to the pivotal facts stated in the revenueruling. In those based on positions taken in rulings to taxpayersor technical advice to Service field offices, identifying detailsand information of a confidential nature are deleted to preventunwarranted invasions of privacy and to comply with statutoryrequirements.

Rulings and procedures reported in the Bulletin do not have theforce and effect of Treasury Department Regulations, but theymay be used as precedents. Unpublished rulings will not berelied on, used, or cited as precedents by Service personnel inthe disposition of other cases. In applying published rulings andprocedures, the effect of subsequent legislation, regulations,court decisions, rulings, and procedures must be considered,

and Service personnel and others concerned are cautionedagainst reaching the same conclusions in other cases unlessthe facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

Part I.—1986 Code.This part includes rulings and decisions based on provisions ofthe Internal Revenue Code of 1986.

Part II.—Treaties and Tax Legislation.This part is divided into two subparts as follows: Subpart A,Tax Conventions and Other Related Items, and Subpart B, Leg-islation and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous.To the extent practicable, pertinent cross references to thesesubjects are contained in the other Parts and Subparts. Alsoincluded in this part are Bank Secrecy Act Administrative Rul-ings. Bank Secrecy Act Administrative Rulings are issued bythe Department of the Treasury’s Office of the Assistant Secre-tary (Enforcement).

Part IV.—Items of General Interest.This part includes notices of proposed rulemakings, disbar-ment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative indexfor the matters published during the preceding months. Thesemonthly indexes are cumulated on a semiannual basis, and arepublished in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

May 20, 2013 2013–21 I.R.B.

Part III. Administrative, Procedural, and MiscellaneousFiling and Payment Extensionfor Those Affected by theBoston Marathon Explosions

Notice 2013–30

This notice provides a 3-month exten-sion of time to file and pay tax under sec-tions 6081 and 6161 of the Code (Code) forthose individuals affected by the BostonMarathon explosions.

BACKGROUND

Generally, the Code requires individu-als to file their individual income tax re-turns and pay tax on or before April 15th

(or the next succeeding day that is not aSaturday, Sunday, or legal holiday). Secs.6072(a), 6151(a) and 7503. Section 6651of the Code imposes an addition to taxwhen a taxpayer does not file a return orpay the tax shown on the return by the ex-tended due date for filing a return or pay-ment of tax.

Section 6081(a) of the Code authorizesthe Secretary to grant an extension of timeto file any return. Such extension may notexceed 6 months. Section 6161(a) of theCode authorizes the Secretary to extendthe time to pay tax. Such extension gen-erally may not exceed 6 months. Interest,however, will apply on any amounts paidafter the date that the tax was due withoutregard to the extension. Sec. 6601(b).

On April 15, 2013, two explosivedevices were detonated in Boston, Massa-chusetts near the finish line of the BostonMarathon (the Boston Marathon explo-sions). The resulting explosions injuredhundreds of individuals, some fatally,who were participating in, or watching,the Boston Marathon or who were in thegeneral vicinity of the race’s finish line.Several streets and offices in the Bostonarea remained closed after the explosionsfor law enforcement to investigate the ex-plosions and pursue suspects, disruptingbusiness activity in the area and poten-tially the ability of some taxpayers andreturn preparers to access their files.

RELIEF FOR THOSE AFFECTEDBY THE BOSTON MARATHONEXPLOSIONS

The Internal Revenue Service (Service)is granting an extension of time to file 2012tax returns and pay any tax due on those re-turns until July 15, 2013, to those affectedby the Boston Marathon explosions. TheService will not impose an addition to taxfor late filing or payment on these individ-uals provided they file their tax returns andpay any tax due by July 15, 2013, regard-less of whether the individual requested anextension of time to file on or before April15, 2013. By law, however, interest willapply to any payments made after the Aprildue date for payment.

This relief applies to all individuals wholive in Suffolk County, Massachusetts, in-cluding the city of Boston, victims of theexplosions, their families, first responders,others impacted by the tragedy who liveoutside of Suffolk County, and taxpayerswhose tax return preparers were adverselyaffected. The Service will automaticallyprovide this relief to any individual livingin Suffolk County. Eligible taxpayers liv-ing outside Suffolk County can claim thisrelief by calling 1–866–562–5227 startingTuesday, April 23, and identifying them-selves to the Service before filing a re-turn or making a payment. Eligible tax-payers who receive notices requesting thepayment of additions to tax for late fil-ing or payment from the Service can callthis number to have these additions to taxabated. Taxpayers affected by the eventssurrounding the Boston Marathon explo-sion with a filing or payment requirementother than an individual income tax re-quirement (Form 1040 series requirement)from April 15, 2013 to April 19, 2013,inclusive, also may receive relief. Thesetaxpayers should call 1–866–562–5227 ifthey receive a notice requesting the pay-ment of additions to tax for late filing orpayment to have these additions abated.

Individual taxpayers eligible for this re-lief who need more time to file their re-turns may receive an additional extensionof time to file their returns to October 15,2013, by filing Form 4868, Application forAutomatic Extension of Time to File U.S.Individual Income Tax Return, by July 15,2013. This additional extension of time to

file will not further extend the time for pay-ment of tax. Forms, instructions, and othertax assistance are available on IRS.gov.The IRS toll-free number for general taxquestions is 1–800–829–1040.

CONTACT INFORMATION

The principal author of this no-tice is Mary E. Keys of the Office ofAssociate Chief Counsel (Procedure &Administration). For further informationregarding this notice, contact Ms. Keys at(202) 622–4570 (not a toll-free call).

Determination of Housing CostAmount Eligible for Exclusionor Deduction for 2013

Notice 2013–31

SECTION 1. PURPOSE

This notice provides adjustments to thelimitation on housing expenses for pur-poses of section 911 of the Internal Rev-enue Code (Code) for specific locations for2013. These adjustments are made on thebasis of geographic differences in housingcosts relative to housing costs in the UnitedStates.

SECTION 2. BACKGROUND

Section 911(a) of the Code allows aqualified individual to elect to excludefrom gross income the foreign earned in-come and housing cost amount of suchindividual. Section 911(c)(1) defines theterm “housing cost amount” as an amountequal to the excess of (A) the housingexpenses of an individual for the taxableyear to the extent such expenses do notexceed the amount determined under sec-tion 911(c)(2), over (B) 16 percent of theexclusion amount (computed on a dailybasis) in effect under section 911(b)(2)(D)for the calendar year in which such taxableyear begins ($267.40 per day for 2013, or$97,600 for the full year), multiplied bythe number of days of that taxable yearwithin the applicable period described insection 911(d)(1). The applicable periodis the period during which the individualmeets the tax home requirement of section

2013–21 I.R.B. 1099 May 20, 2013

911(d)(1) and either the bona fide resi-dence requirement of section 911(d)(1)(A)or the physical presence requirement ofsection 911(d)(1)(B). Assuming that theentire taxable year of a qualified individ-ual is within the applicable period, thesection 911(c)(1)(B) amount for 2013 is$15,616 ($97,600 x .16).

Section 911(c)(2)(A) of the Code lim-its the housing expenses taken into accountin section 911(c)(1)(A) to an amount equalto (i) 30 percent (adjusted as may be pro-vided under the Secretary’s authority un-der section 911(c)(2)(B)) of the amount(computed on a daily basis) in effect un-der section 911(b)(2)(D) for the calendaryear in which the taxable year of the indi-vidual begins, multiplied by (ii) the num-ber of days of that taxable year within the

applicable period described in section 911(d)(1). Thus, under this general limita-tion, a qualified individual whose entiretaxable year is within the applicable periodis limited to maximum housing expensesof $29,280 ($97,600 x .30) in 2013.

Section 911(c)(2)(B) of the Code au-thorizes the Secretary to issue regulationsor other guidance to adjust the percentageunder section 911(c)(2)(A)(i) based ongeographic differences in housing costsrelative to housing costs in the UnitedStates. Pursuant to this authority, theInternal Revenue Service (IRS) and theTreasury Department published Notice2006–87, 2006–2 C.B. 766, and Notice2007–25, 2007–1 C.B. 760, for 2006; No-tice 2007–77, 2007–2 C.B. 735, for 2007;Notice 2008–107, 2008–2 C.B. 1266, for

2008 and 2009; Notice 2010–27, 2010–15I.R.B. 531, for 2009 and 2010; Notice2011–8, 2011–8 I.R.B. 503, for 2010and 2011; and Notice 2012–19, 2012–10I.R.B. 440, for 2012 and 2013 to provideadjustments to the limitation on housingexpenses for qualified individuals incur-ring housing expenses in countries withhigh housing costs relative to housingcosts in the United States.

SECTION 3. TABLE OF ADJUSTEDLIMITATIONS FOR 2013

The following table provides adjustedlimitations on housing expenses (in lieuof the otherwise applicable limitation of$29,280) for 2013.

Country Location

Limitation onHousing Expenses

(daily)


(full year)

Angola Luanda 230.14 84,000

Argentina Buenos Aires 154.79 56,500

Australia Adelaide 96.44 35,200

Australia Brisbane 95.34 34,800

Australia Canberra 83.84 30,600

Australia Darwin, Northern Country 83.84 30,600

Australia Gold Coast 95.34 34,800

Australia Melbourne 122.19 44,600

Australia Oakey 95.34 34,800

Australia Perth 130.68 47,700

Australia Sydney 89.81 32,782

Australia Toowoomba 95.34 34,800

Austria Vienna 96.99 35,400

Bahamas, The Grand Bahama Island 84.66 30,900

Bahamas, The Nassau 136.16 49,700

Bahrain Bahrain 120.55 44,000

Barbados Barbados 103.29 37,700

Belgium Antwerp 96.16 35,100

Belgium Brussels 128.77 47,000

Belgium Gosselies 115.34 42,100

Belgium Hoogbuul 96.16 35,100

Belgium Mons 115.34 42,100

Belgium SHAPE/Chievres 115.34 42,100

Bermuda Bermuda 246.58 90,000

May 20, 2013 1100 2013–21 I.R.B.

Country Location


(daily)


(full year)

Bosnia-Herzegovina Sarajevo 82.19 30,000

Brazil Brasilia 126.03 46,000

Brazil Rio de Janeiro 96.16 35,100

Brazil Sao Paulo 155.07 56,600

Canada Calgary 129.86 47,400

Canada Dartmouth 107.95 39,400

Canada Edmonton 103.29 37,700

Canada Halifax 107.95 39,400

Canada London, Ontario 88.22 32,200

Canada Montreal 166.03 60,600

Canada Ottawa 148.49 54,200

Canada Quebec 126.03 46,000

Canada Toronto 153.97 56,200

Canada Vancouver 136.71 49,900

Canada Victoria 97.53 35,600

Canada Winnipeg 93.15 34,000

Cayman Islands Grand Cayman 131.51 48,000

Chile Santiago 153.70 56,100

China Beijing 195.07 71,200

China Hong Kong 313.15 114,300

China Shanghai 156.17 57,001

Colombia Bogota 160.82 58,700

Colombia All cities other than Bogota 135.34 49,400

Costa Rica San Jose 87.67 32,000

Denmark Copenhagen 119.74 43,704

Dominican Republic Santo Domingo 124.66 45,500

Ecuador Guayaquil 84.38 30,800

Ecuador Quito 89.32 32,600

Estonia Tallinn 127.67 46,600

France Garches 226.03 82,500

France Le Havre 91.23 33,300

France Lyon 127.12 46,400

France Marseille 121.92 44,500

France Montpellier 102.47 37,400

France Paris 226.03 82,500

France Sevres 226.03 82,500

France Suresnes 226.03 82,500

France Versailles 226.03 82,500

2013–21 I.R.B. 1101 May 20, 2013

Country Location


(daily)


(full year)

Germany Babenhausen 110.96 40,500

Germany Bad Aibling 94.52 34,500

Germany Bad Nauheim 88.77 32,400

Germany Baumholder 107.40 39,200

Germany Berlin 135.34 49,400

Germany Birkenfeld 107.40 39,200

Germany Boeblingen 134.52 49,100

Germany Bonn 115.07 42,000

Germany Butzbach 86.58 31,600

Germany Cologne 153.97 56,200

Germany Darmstadt 110.96 40,500

Germany Frankfurt am Main 115.62 42,200

Germany Friedberg 88.77 32,400

Germany Garmisch-Partenkirchen 102.47 37,400

Germany Gelnhausen 139.73 51,000

Germany Germersheim 83.84 30,600

Germany Giebelstadt 95.89 35,000

Germany Giessen 98.63 36,000

Germany Grafenwoehr 110.41 40,300

Germany Hanau 139.73 51,000

Germany Hannover 82.74 30,200

Germany Heidelberg 103.56 37,800

Germany Idar-Oberstein 107.40 39,200

Germany Ingolstadt 156.16 57,000

Germany Kaiserslautern, Landkreis 133.70 48,800

Germany Kitzingen 95.89 35,000

Germany Leimen 103.56 37,800

Germany Ludwigsburg 134.52 49,100

Germany Mainz 149.86 54,700

Germany Mannheim 103.56 37,800

Germany Munich 156.16 57,000

Germany Nellingen 134.52 49,100

Germany Neubruecke 107.40 39,200

Germany Ober Ramstadt 110.96 40,500

Germany Oberammergau 102.47 37,400

Germany Pirmasens 133.70 48,800

Germany Rheinau 103.56 37,800

Germany Schwetzingen 103.56 37,800

May 20, 2013 1102 2013–21 I.R.B.

Country Location


(daily)


(full year)

Germany Seckenheim 103.56 37,800

Germany Sembach 133.70 48,800

Germany Stuttgart 134.52 49,100

Germany Vilseck 110.41 40,300

Germany Wahn 115.07 42,000

Germany Wertheim 95.89 35,000

Germany Wiesbaden 149.86 54,700

Germany Wuerzburg 95.89 35,000

Germany Zweibrueken 133.70 48,800

Germany All cities other than Augsburg,Babenhausen, Bad Aibling, Bad Kreuznach,Bad Nauheim, Baumholder, Berchtesgaden,Berlin, Birkenfeld, Boeblingen, Bonn,Bremen, Bremerhaven, Butzbach, Cologne,Darmstadt, Delmenhorst, Duesseldorf,Erlangen, Flensburg, Frankfurt amMain, Friedberg, Fuerth, Garlstedt,Garmisch-Partenkirchen, Geilenkirchen,Gelnhausen, Germersheim, Giebelstadt,Giessen, Grafenwoehr, Grefrath, Greven,Gruenstadt, Hamburg, Hanau, Handorf,Hannover, Heidelberg, Heilbronn,Herongen, Idar-Oberstein, Ingolstadt,Kaiserslautern, Landkreis, Kalkar,Karlsruhe, Kerpen, Kitzingen, Koblenz,Leimen, Leipzig, Ludwigsburg, Mainz,Mannheim, Mayen, Moenchen-Gladbach,Muenster, Munich, Nellingen, Neubruecke,Noervenich, Nuernberg, Ober Ramstadt,Oberammergau, Osterholz-Scharmbeck,Pirmasens, Rheinau, Rheinberg,Schwabach, Schwetzingen, Seckenheim,Sembach, Stuttgart, Twisteden, Vilseck,Wahn, Wertheim, Wiesbaden, Worms,Wuerzburg, Zirndorf and Zweibrueken

108.77 39,700

Ghana Accra 98.63 36,000

Greece Argyroupolis 86.30 31,500

Greece Athens 110.68 40,400

Greece Elefsis 110.68 40,400

Greece Ellinikon 110.68 40,400

Greece Mt. Hortiatis 86.30 31,500

Greece Mt. Parnis 110.68 40,400

Greece Mt. Pateras 110.68 40,400

Greece Nea Makri 110.68 40,400

Greece Perivolaki 86.30 31,500

Greece Piraeus 110.68 40,400

2013–21 I.R.B. 1103 May 20, 2013

Country Location


(daily)


(full year)

Greece Tanagra 110.68 40,400

Greece Thessaloniki 86.30 31,500

Guatemala Guatemala City 113.70 41,500

Guyana Georgetown 95.89 35,000

Holy See, The Holy See, The 150.41 54,900

Hungary Budapest 89.04 32,500

Hungary Papá 121.92 44,500

India Mumbai 186.08 67,920

India New Delhi 82.88 30,252

Indonesia Jakarta 103.50 37,776

Ireland Dublin 130.96 47,800

Ireland Shannon Area 103.56 37,800

Israel Tel Aviv 139.18 50,800

Italy Catania 88.22 32,200

Italy Genoa 114.52 41,800

Italy Gioia Tauro 85.48 31,200

Italy La Spezia 110.68 40,400

Italy Leghorn 94.25 34,400

Italy Milan 224.93 82,100

Italy Naples 143.01 52,200

Italy Parma 114.25 41,700

Italy Pisa 94.25 34,400

Italy Pordenone-Aviano 114.25 41,700

Italy Rome 150.41 54,900

Italy Sigonella 88.22 32,200

Italy Turin 112.60 41,100

Italy Vicenza 115.34 42,100

Italy All cities other than Avellino, Brindisi,Catania, Florence, Gaeta, Genoa, GioiaTauro, La Spezia, Leghorn, Milan, MountVergine, Naples, Nettuno, Parma, Pisa,Pordenone-Aviano, Rome, Sardinia,Sigonella, Turin, Verona, and Vicenza.

92.05 33,600

Jamaica Kingston 112.88 41,200

Japan Akashi 107.12 39,100

Japan Akizuki 94.25 34,400

Japan Atsugi 139.73 51,000

Japan Camp Zama 139.73 51,000

Japan Chiba-Ken 150.96 55,100

Japan Fussa 139.73 51,000

May 20, 2013 1104 2013–21 I.R.B.

Country Location


(daily)


(full year)

Japan Gifu 203.56 74,300

Japan Gotemba 102.19 37,300

Japan Haneda 139.73 51,000

Japan Iwakuni 107.95 39,400

Japan Kanagawa-Ken 139.73 51,000

Japan Komaki 203.56 74,300

Japan Machidi-Shi 139.73 51,000

Japan Misawa 116.16 42,400

Japan Nagoya 203.56 74,300

Japan Okinawa Prefecture 188.22 68,700

Japan Osaka-Kobe 248.39 90,664

Japan Sagamihara 139.73 51,000

Japan Saitama-Ken 139.73 51,000

Japan Sasebo 115.89 42,300

Japan Tachikawa 139.73 51,000

Japan Tokyo 320.82 117,100

Japan Tokyo-to 139.73 51,000

Japan Yokohama 175.89 64,200

Japan Yokosuka 163.01 59,500

Japan Yokota 139.73 51,000

Kazakhstan Almaty 131.51 48,000

Korea Ammo Depot #9 81.10 29,600

Korea Camp Carroll 88.77 32,400

Korea Camp Colbern 153.42 56,000

Korea Camp Market 153.42 56,000

Korea Camp Mercer 153.42 56,000

Korea Chinhae 82.19 30,000

Korea K–16 153.42 56,000

Korea Kimhae 83.84 30,600

Korea Kimpo Airfield 153.42 56,000

Korea Munsan 94.25 34,400

Korea Osan AB 96.71 35,300

Korea Pusan 83.84 30,600

Korea Pyongtaek 96.16 35,100

Korea Seoul 153.42 56,000

Korea Suwon 153.42 56,000

Korea Taegu 92.05 33,600

Korea Tongduchon 87.40 31,900

2013–21 I.R.B. 1105 May 20, 2013

Country Location


(daily)


(full year)

Korea Uijongbu 90.96 33,200

Korea Waegwan 88.77 32,400

Korea All cities other than Ammo Depot #9, CampCarroll, Camp Colbern, Camp Market,Camp Mercer, Changwon, Chinhae,Chunchon, K–16, Kimhae, Kimpo Airfield,Kunsun, Kwangju, Munsan, Osan AB,Pusan, Pyongtaek, Seoul, Suwon, Taegu,Tongduchon, Uijongbu, and Waegwan

88.77 32,400

Kuwait Kuwait City 176.44 64,400

Kuwait All cities other than Kuwait City 158.08 57,700

Luxembourg Luxembourg 123.56 45,100

Macedonia Skopje 96.99 35,400

Malaysia Kuala Lumpur 126.58 46,200

Malaysia All cities other than Kuala Lumpur 92.33 33,700

Mexico Malta 138.36 50,500

Mexico Mazatlan 84.93 31,000

Mexico Merida 103.84 37,900

Mexico Mexico City 131.23 47,900

Mexico Monterrey 90.96 33,200

Mexico All cities other than Ciudad Juarez,Cuernavaca, Guadalajara, Hermosillo,Matamoros, Mazatlan, Merida, Metapa,Mexico City, Monterrey, Nogales, NuevoLaredo, Reynosa, Tapachula, Tijuana,Tuxtla Gutierrez, and Veracruz

107.95 39,400

Mozambique Maputo 108.22 39,500

Namibia Windhoek 87.95 32,100

Netherlands Amsterdam 144.93 52,900

Netherlands Aruba 98.63 36,000

Netherlands Brunssum 106.30 38,800

Netherlands Eygelshoven 106.30 38,800

Netherlands Hague, The 179.45 65,500

Netherlands Heerlen 106.30 38,800

Netherlands Hoensbroek 106.30 38,800

Netherlands Hulsberg 106.30 38,800

Netherlands Kerkrade 106.30 38,800

Netherlands Landgraaf 106.30 38,800

Netherlands Maastricht 106.30 38,800

Netherlands Papendrecht 108.22 39,500

Netherlands Rotterdam 108.22 39,500

Netherlands Schaesburg 106.30 38,800

May 20, 2013 1106 2013–21 I.R.B.

Country Location


(daily)


(full year)

Netherlands Schinnen 106.30 38,800

Netherlands Schiphol 144.93 52,900

Netherlands Ypenburg 179.45 65,500

Netherlands All cities other than Amsterdam, Aruba,Brunssum, Coevorden, Eygelshoven,The Hague, Heerlen, Hoensbroek,Hulsberg, Kerkrade, Landgraaf, Maastricht,Margraten, Papendrecht, Rotterdam,Schaesburg, Schinnen, Schiphol, andYpenburg.

108.22 39,500

Netherlands Antilles Curacao 125.48 45,800

New Zealand Auckland 97.81 35,700

New Zealand Christchurch 87.95 32,100

New Zealand Wellington 92.60 33,800

Nicaragua Managua 87.12 31,800

Nigeria Abuja 98.63 36,000

Norway Oslo 147.40 53,800

Norway Stavanger 125.21 45,700

Norway All cities other than Oslo and Stavanger. 103.29 37,700

Panama Panama City 97.26 35,500

Peru Lima 107.12 39,100

Philippines Cavite 106.85 39,000

Philippines Manila 106.85 39,000

Poland Poland 80.55 29,400

Portugal Alverca 137.81 50,300

Portugal Lisbon 137.81 50,300

Qatar Doha 99.35 36,264

Qatar All cities other than Doha 88.77 32,400

Russia Moscow 295.89 108,000

Russia Saint Petersburg 164.38 60,000

Russia Sakhalin Island 212.33 77,500

Russia Vladivostok 212.33 77,500

Russia Yekaterinburg 129.86 47,400

Rwanda Kigali 86.30 31,500

Saudi Arabia Jeddah 84.02 30,667

Saudi Arabia Riyadh 109.59 40,000

Singapore Singapore 246.03 89,800

South Africa Pretoria 107.67 39,300

Spain Barcelona 111.23 40,600

Spain Madrid 183.56 67,000

2013–21 I.R.B. 1107 May 20, 2013

Country Location


(daily)


(full year)

Spain Rota 112.05 40,900

Spain Valencia 105.48 38,500

Suriname Paramaribo 90.41 33,000

Switzerland Bern 193.70 70,700

Switzerland Geneva 269.32 98,300

Switzerland Zurich 107.45 39,219

Switzerland All cities other than Bern, Geneva andZurich

90.14 32,900

Taiwan Taipei 126.54 46,188

Tanzania Dar Es Salaam 120.55 44,000

Thailand Bangkok 161.64 59,000

Trinidad and Tobago Port of Spain 149.32 54,500

Turkey Izmir-Cigli 86.58 31,600

Turkey Yamanlar 86.58 31,600

Ukraine Kiev 197.26 72,000

United Arab Emirates Abu Dhabi 136.13 49,687

United Arab Emirates Dubai 156.64 57,174

United Kingdom Basingstoke 112.60 41,099

United Kingdom Bath 112.33 41,000

United Kingdom Bracknell 170.14 62,100

United Kingdom Bristol 106.03 38,700

United Kingdom Brookwood 120.55 44,000

United Kingdom Cambridge 117.81 43,000

United Kingdom Caversham 202.19 73,800

United Kingdom Cheltenham 146.03 53,300

United Kingdom Croughton 122.74 44,800

United Kingdom Fairford 122.74 44,800

United Kingdom Farnborough 149.86 54,700

United Kingdom Felixstowe 115.62 42,200

United Kingdom Gibraltar 122.24 44,616

United Kingdom Harrogate 129.04 47,100

United Kingdom High Wycombe 170.14 62,100

United Kingdom Kemble 122.74 44,800

United Kingdom Lakenheath 152.05 55,500

United Kingdom Liverpool 106.30 38,800

United Kingdom London 241.64 88,200

United Kingdom Loudwater 173.97 63,500

United Kingdom Menwith Hill 129.04 47,100

United Kingdom Mildenhall 152.05 55,500

May 20, 2013 1108 2013–21 I.R.B.

Country Location


(daily)


(full year)

United Kingdom Oxfordshire 119.45 43,600

United Kingdom Plymouth 119.45 43,600

United Kingdom Portsmouth 119.45 43,600

United Kingdom Reading 170.14 62,100

United Kingdom Rochester 124.66 45,500

United Kingdom Samlesbury 120.55 44,000

United Kingdom Southampton 121.10 44,200

United Kingdom Surrey 132.61 48,402

United Kingdom Waterbeach 124.11 45,300

United Kingdom Wiltshire 113.97 41,600

United Kingdom All cities other than Basingstoke,Bath, Belfast, Birmingham, Bracknell,Bristol, Brookwood, Brough, Cambridge,Caversham, Chelmsford, Cheltenham,Chicksands, Croughton, Dunstable,Edinburgh, Edzell, Fairford, Farnborough,Felixstowe, Ft. Halstead, Gibraltar,Glenrothes, Greenham Common,Harrogate, High Wycombe, Hythe,Kemble, Lakenheath, Liverpool, London,Loudwater, Menwith Hill, Mildenhall,Nottingham, Oxfordshire, Plymouth,Portsmouth, Reading, Rochester,Samlesbury, Southampton, Surrey,Waterbeach, Welford, West Byfleet, andWiltshire.

120.55 44,000

Venezuela Caracas 156.16 57,000

Vietnam Hanoi 128.22 46,800

Vietnam Ho Chi Minh City 115.07 42,000

SECTION 4. ELECTION TO APPLY2013 ADJUSTED LIMITATIONS TO2012 TAXABLE YEAR

For some locations, the limitation onhousing expenses provided in section 3 ofthis notice may be higher than the limita-tion on housing expenses provided in the“Table of Adjusted Limitations for 2012”in Notice 2012–19. A qualified individ-ual incurring housing expenses in such alocation during 2012 may apply the ad-justed limitation on housing expenses pro-vided in section 3 of this notice in lieuof the amounts provided in the “Table ofAdjusted Limitations for 2012” in Notice2012–19 (and as set forth in the Instruc-tions to Form 2555 (2012)).

The IRS and the Treasury Departmentanticipate that future annual notices pro-viding adjustments to housing expenselimitations will make a similar electionavailable to qualified individuals that incurhousing expenses in the immediately pre-ceding year. For example, when adjustedhousing expense limitations for 2014 areissued, it is expected that taxpayers willbe permitted to apply those adjusted limi-tations to the 2013 taxable year.

SECTION 5. EFFECT ON OTHERDOCUMENTS

This notice supersedes Notice 2006–87,2006–2 C.B. 766; Notice 2007–25,2007–1 C.B. 760; Notice 2007–77;2007–2 C.B. 735; Notice 2008–107,

2008–2 C.B. 1266; Notice 2010–27,2010–15 I.R.B. 531; Notice 2011–8,2011–8 I.R.B. 503; and Notice 2012–19,2012–10 I.R.B. 440.

SECTION 6. EFFECTIVE DATE

This notice is effective for taxable yearsbeginning on or after January 1, 2013.However, as provided in section 4, a tax-payer may elect to apply the 2013 adjustedhousing limitations contained in section 3of this notice to his or her taxable year be-ginning in 2012.

DRAFTING INFORMATION

The principal author of this notice isSusan E. Massey of the Office of AssociateChief Counsel (International). For further

2013–21 I.R.B. 1109 May 20, 2013

information regarding this notice contactMs. Massey at (202) 622–3840 (not atoll-free call).

26 CFR 601.602: Tax forms and instructions.(Also: Part 1, §§ 1, 223.)

Rev. Proc. 2013–25

SECTION 1. PURPOSE

This revenue procedure provides the2014 inflation adjusted amounts for HealthSavings Accounts (HSAs) as determinedunder § 223 of the Internal Revenue Code.

SECTION 2. 2014 INFLATIONADJUSTED ITEMS

Annual contribution limitation. For cal-endar year 2014, the annual limitation on

deductions under § 223(b)(2)(A) for an in-dividual with self-only coverage under ahigh deductible health plan is $3,300. Forcalendar year 2014, the annual limitationon deductions under § 223(b)(2)(B) for anindividual with family coverage under ahigh deductible health plan is $6,550.

High deductible health plan. For cal-endar year 2014, a “high deductible healthplan” is defined under § 223(c)(2)(A) asa health plan with an annual deductiblethat is not less than $1,250 for self-onlycoverage or $2,500 for family coverage,and the annual out-of-pocket expenses(deductibles, co-payments, and otheramounts, but not premiums) do not exceed$6,350 for self-only coverage or $12,700for family coverage.

SECTION 3. EFFECTIVE DATE

This revenue procedure is effective forcalendar year 2014.

SECTION 4. DRAFTINGINFORMATION

The principal author of this revenueprocedure is Bill Ruane of the Office ofAssociate Chief Counsel (Income Tax& Accounting). For further informationregarding § 223 and HSAs, contactKaren Levin at (202) 622–6080 (not atoll-free call). For further informationregarding the calculation of the inflationadjustments in this revenue procedure,contact Mr. Ruane at (202) 622–4920 (nota toll-free call).

May 20, 2013 1110 2013–21 I.R.B.

Part IV. Items of General InterestNotice of ProposedRulemaking

Community Health NeedsAssessments for CharitableHospitals

REG–106499–12

AGENCY: Internal Revenue Service(IRS), Treasury.

ACTION: ACTION: Notice of proposedrulemaking.

SUMMARY: This document containsproposed regulations that provide guid-ance to charitable hospital organizationson the community health needs assess-ment (CHNA) requirements, and relatedexcise tax and reporting obligations, en-acted as part of the Patient Protectionand Affordable Care Act of 2010. Theseproposed regulations also clarify the con-sequences for failing to meet these andother requirements for charitable hospitalorganizations. These regulations will af-fect charitable hospital organizations.

DATES: Comments and requests for apublic hearing must be received by July 5,2013.

ADDRESSES: Send submissions to:CC:PA:LPD:PR (REG–106499–12), room5203, Internal Revenue Service, PO Box7604, Ben Franklin Station, Washing-ton, DC 20044. Submissions may behand-delivered Monday through Fridaybetween the hours of 8 a.m. and 4 p.m.to CC:PA:LPD:PR (REG–106499–12),Courier’s Desk, Internal Revenue Ser-vice, 1111 Constitution Avenue, NW,Washington, DC, or sent electroni-cally via the Federal eRulemaking Por-tal at http://www.regulations.gov (IRSREG–106499–12).

FOR FURTHER INFORMATIONCONTACT: Concerning these pro-posed regulations, Amy F. Giulianoor Preston J. Quesenberry at (202)622–6070; concerning submissions ofcomments and requests for a publichearing, Oluwafunmilayo Taylor at (202)622–7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The collection of information con-tained in this notice of proposed rule-making has been submitted to the Officeof Management and Budget for reviewand approval under OMB control number1545–0047, in accordance with the Paper-work Reduction Act of 1995 (44 U.S.C.3507(d)). Comments on the collectionof information should be sent to the Of-fice of Management and Budget, Attn:Desk Officer for the Department of theTreasury, Office of Information and Reg-ulatory Affairs, Washington, DC 20503,with copies to the Internal Revenue Ser-vice, Attn: IRS Reports Clearance Officer,SE:W:CAR:MP:T:T:SP, Washington, DC20224. Comments on the collection ofinformation should be received by June 4,2013.

Comments are specifically requestedconcerning:

Whether the proposed collection of in-formation is necessary for the proper per-formance of the functions of the InternalRevenue Service, including whether theinformation will have practical utility;

The accuracy of the estimated burdenassociated with the proposed collection ofinformation;

How the quality, utility, and clarity ofthe information to be collected may be en-hanced;

How the burden of complying with theproposed collection of information may beminimized, including through forms of in-formation technology; and

Estimates of capital or start-up costsand costs of operation, maintenance, andpurchase of services to provide informa-tion.

The collection of information in theseproposed regulations is in §1.501(r)–3and §1.6033–2(a)(2)(ii)(l). The collec-tion of information flows from sections501(r)(3) and 6033(b)(15) of the InternalRevenue Code (Code), which require ahospital organization to conduct a CHNAand adopt an implementation strategy tomeet the community health needs identi-fied through the CHNA at least once everythree years, report on its annual informa-tion return how it is meeting the needs

identified through the CHNA, and attachto its annual information return a copyof its audited financial statements. Theexpected recordkeepers are hospital orga-nizations described in sections 501(c)(3)and 501(r)(2).

The following estimates are based oninformation that is available to the IRS andaveraged over a three-year time period, toreflect the fact that the information col-lection generally will be spread over thestatutory three-year cycle during which ahospital organization is required to con-duct a CHNA and adopt an implementa-tion strategy. A particular hospital organ-ization may require more or less time, de-pending on the circumstances.

Estimated number of recordkeepers:3,377.

Estimated average annual burden hoursper recordkeeper: 80 hours.

Estimated total annual recordkeepingburden: 270,160 hours.

The burden for the collection of infor-mation contained in the proposed amend-ments to §1.6033–2 will be reflected in theburden on Form 990, Return of Organiza-tion Exempt From Income Tax, after it isrevised to require the additional informa-tion in the regulation.

An agency may not conduct or sponsor,and a person is not required to respond to, acollection of information unless it displaysa valid control number assigned by the Of-fice of Management and Budget.

Books or records relating to a collectionof information must be retained as long astheir contents may become material in theadministration of any internal revenue law.Generally, tax returns and return informa-tion are confidential, as required by section6103.

Background

The Patient Protection and Afford-able Care Act, Public Law 111–148 (124Stat. 119 (2010)) (the “Affordable CareAct”), enacted section 501(r) of the Code,which imposes additional requirements oncharitable hospital organizations. Section501(r)(1) states that a hospital organiza-tion described in section 501(r)(2) will notbe treated as a tax-exempt organizationdescribed in section 501(c)(3) unless theorganization meets the requirements of

2013–21 I.R.B. 1111 May 20, 2013

section 501(r)(3) through 501(r)(6). TheAffordable Care Act did not otherwiseaffect the substantive standards for taxexemption that charitable hospital organi-zations are required to meet under section501(c)(3).

Section 501(r)(2)(A) defines a hospitalorganization as: (i) an organization thatoperates a facility required by a state tobe licensed, registered, or similarly rec-ognized as a hospital; and (ii) any otherorganization that the Secretary determineshas the provision of hospital care as itsprincipal function or purpose constitutingthe basis for its exemption under section501(c)(3).

Section 501(r)(2)(B)(i) requires a hos-pital organization that operates more thanone hospital facility to meet the require-ments of section 501(r) separately withrespect to each hospital facility. Section501(r)(2)(B)(ii) provides that a hospitalorganization will not be treated as de-scribed in section 501(c)(3) with respect toany hospital facility for which the require-ments of section 501(r) are not separatelymet.

Section 501(r)(3) requires a hospital or-ganization to conduct a CHNA at leastonce every three years and adopt an imple-mentation strategy to meet the communityhealth needs identified through the CHNA.The CHNA must take into account inputfrom persons who represent the broad in-terests of the community served by thehospital facility, including those with spe-cial knowledge of or expertise in publichealth. The CHNA must also be madewidely available to the public.

Section 4959 imposes a $50,000 excisetax on a hospital organization that fails tomeet the CHNA requirements for any tax-able year. A hospital organization must re-port the amount of any excise tax imposedon it under section 4959 on its annual in-formation return (that is, Form 990, Returnof Organization Exempt From Income Tax,and related schedules) pursuant to section6033(b)(10)(D).

Section 6033(b)(15)(A) requires a hos-pital organization to report on its Form990 a description of how the organizationis addressing the needs identified in eachCHNA and a description of any needs thatare not being addressed together with thereasons why the needs are not being ad-dressed.

Section 6033(b)(15)(B) requires a hos-pital organization to file with its Form 990a copy of its audited financial statements(or, in the case of an organization the fi-nancial statements of which are includedin consolidated financial statements withother organizations, its consolidated finan-cial statements).

Notice 2010–39

In May 2010, the Department of theTreasury (“Treasury Department”) andthe IRS issued Notice 2010–39, 2010–24I.R.B. 756 (May 27, 2010), which solicitedcomments regarding the application of theadditional requirements imposed by sec-tion 501(r). The Treasury Department andthe IRS received approximately 125 com-ments in response to Notice 2010–39 andconsidered the comments relating to theconsequences for failing a section 501(r)requirement in drafting these proposedregulations. The principal comments con-sidered are discussed in this preambleunder Explanation of Provisions.

Notice 2011–52

In July 2011, the Treasury Depart-ment and the IRS issued Notice 2011–52,2011–30 I.R.B. 60 (July 8, 2011), whichaddressed the CHNA requirements of sec-tion 501(r)(3). Notice 2011–52 describedprovisions related to the CHNA require-ments that the Treasury Department andthe IRS anticipated would be included inthese proposed regulations and solicitedcomments from the public. Specifically,Notice 2011–52 described anticipated reg-ulatory provisions regarding the documen-tation of a CHNA, how and when a CHNAis conducted, the community served by ahospital facility, persons representing thebroad interests of the community, makinga CHNA widely available to the public, theimplementation strategy, excise taxes onfailures to meet the CHNA requirements,reporting requirements related to CHNAs,and the effective dates of the CHNA pro-visions. The Treasury Department and theIRS received more than 80 comments inresponse to Notice 2011–52. The princi-pal comments considered in drafting theseproposed regulations on the CHNA re-quirements are discussed in this preambleunder Explanation of Provisions.

Notice 2011–52 provided that hospitalorganizations could rely on the anticipated

regulatory provisions described in the no-tice for any CHNA made widely availableto the public, and any implementationstrategy adopted, on or before the date thatis six months after the date further guid-ance regarding the CHNA requirementsis issued. Thus, hospital organizationsmay continue to rely on the interim guid-ance described in Notice 2011–52 forany CHNA made widely available to thepublic, and any implementation strategyadopted, on or before October 5, 2013.

Notice of Proposed Rulemaking onSection 501(r)(4) through 501(r)(6)

On June 26, 2012, the Treasury Depart-ment and the IRS published a notice ofproposed rulemaking in the Federal Reg-ister (REG–130266–11; 77 FR 38148)(“2012 proposed regulations”) that con-tains proposed regulations regarding therequirements of section 501(r)(4) (whichrequires hospitals to establish financialassistance and emergency medical carepolicies), section 501(r)(5) (which limitsthe amount hospitals can charge for certaincare provided to individuals eligible forfinancial assistance), and section 501(r)(6)(which prohibits a hospital from engagingin extraordinary collection actions beforemaking reasonable efforts to determinewhether an individual is eligible for finan-cial assistance).

The 2012 proposed regulations alsoprovide guidance on the hospital organi-zations and facilities that must meet thesection 501(r) requirements. In particu-lar, the 2012 proposed regulations containa definitions section that defines “hos-pital organization,” “hospital facility,”and other key terms used in the regula-tions. See §1.501(r)–1 of the proposedregulations. In accordance with section501(r)(2)(A)(i), the 2012 proposed regu-lations define “hospital organization” asan organization recognized (or seekingto be recognized) as described in sec-tion 501(c)(3) that operates one or morehospital facilities, including a hospitalfacility operated through a disregardedentity. Also in accordance with section501(r)(2)(A)(i), the 2012 proposed reg-ulations define “hospital facility” as afacility that is required by a state to belicensed, registered, or similarly recog-nized as a hospital. In addition, the 2012proposed regulations note that references

May 20, 2013 1112 2013–21 I.R.B.

to a hospital facility taking certain actionsare intended to include instances in whichthe hospital organization operating thehospital facility takes action through, oron behalf of, the hospital facility. Thesedefinitions and concepts generally applyfor purposes of these proposed regula-tions on the CHNA requirements andthe consequences for failing to meet thesection 501(r) requirements, althoughthese proposed regulations make minoramendments to the definitions of “hospitalfacility” and “hospital organization” con-tained in the 2012 proposed regulations,as discussed further in the “Explanation ofProvisions” section of this preamble.

The comment period for the 2012 pro-posed regulations closed on September 24,2012. The Treasury Department and theIRS have received more than 200 com-ments in response to the 2012 proposedregulations and are continuing to considerthese comments as they work toward fi-nalizing those proposed regulations. TheTreasury Department and the IRS intend tofinalize the 2012 proposed regulations inconjunction with the finalization of theseproposed regulations.

Explanation of Provisions

These proposed regulations provideguidance on the CHNA requirements ofsection 501(r)(3), and on the related re-porting obligations of section 6033. In ad-dition, these proposed regulations provideguidance on the consequences described insections 501(r)(1), 501(r)(2)(B), and 4959for failing to satisfy any of the section501(r) requirements, including the section501(r)(4) through 501(r)(6) requirementsaddressed in the 2012 proposed regula-tions. These proposed regulations gen-erally do not otherwise provide furtherguidance regarding the section 501(r)(4)through 501(r)(6) requirements. They do,however, make minor amendments to thedefinitions of “hospital facility” and “hos-pital organization” contained in the 2012proposed regulations and also provide anew definition of “operating” a hospitalfacility that is applicable for purposes ofall of the section 501(r) requirements.

In interpreting the CHNA requirementsof section 501(r)(3), the Treasury Depart-ment and the IRS sought to preserve hos-pital facilities’ flexibility to determine thebest way to identify and meet the particu-

lar health needs of the specific communi-ties they serve while requiring a transpar-ent assessment process with ample oppor-tunity for community input.

1. Hospital Facilities and Organizations

a. Hospital organization for purposes ofsection 4959

Section 4959 imposes a $50,000 excisetax on “a hospital organization to whichsection 501(r) applies” that fails to meetthe requirements of section 501(r)(3) forany taxable year. For purposes of sec-tion 501(r), the 2012 proposed regulationsdefine the term “hospital organization”to mean an organization “recognized (orseeking to be recognized) as describedin section 501(c)(3)” that operates oneor more hospital facilities. These pro-posed regulations clarify that the section4959 excise tax will apply to a hospitalorganization that fails to meet the section501(r)(3) requirements during a taxableyear in which its section 501(c)(3) statusis revoked. These proposed regulationsdo not otherwise change the substance ofthe “hospital organization” definition con-tained in the 2012 proposed regulations.

b. Multiple buildings under a singlehospital license

The definition of “hospital facility”in the 2012 proposed regulations pro-vides that multiple buildings operatedby a hospital organization under a singlestate license may be considered a singlehospital facility. This special rule formultiple buildings was intended to al-low flexibility but has the disadvantageof making it harder for the IRS and thepublic to understand and to evaluate theinformation reported on a hospital organi-zation’s Form 990, particularly if multiplebuildings under a single state license arereported differently (as a single facility oras multiple facilities) from year to year.To increase the certainty and consistencyin the designation of hospital facilities,these proposed regulations amend this def-inition to provide that multiple buildingsoperated by a hospital organization undera single state license “are” (rather than“may be”) considered a single hospitalfacility. The Treasury Department and theIRS request comments regarding whether(and under what circumstances) a hospital

organization should be able to treat multi-ple buildings under a single state licenseas separate hospital facilities for purposesof the CHNA and other section 501(r)requirements and, if so, how certainty andconsistency in the designation of hospitalfacilities can be achieved.

c. Tribal hospital facilities

Several commenters recommended thatthese proposed regulations make clear thata hospital facility operated by an Indiantribe or tribal organization is not subjectto the section 501(r) requirements, evenif the hospital facility is part of an or-ganization described in section 501(c)(3).These commenters stated that tribal hospi-tal facilities are not typically “required bya state to be licensed, registered, or sim-ilarly recognized as a hospital,” as con-templated in section 501(r)(2)(A)(i). TheTreasury Department and the IRS note thatsection 501(r)(2)(A)(i) refers only to a hos-pital facility licensed or registered by astate, not an Indian tribal government, andthat section 7871 does not provide that anIndian tribal government is treated as astate for purposes of section 501(r). Ac-cordingly, pending any future guidance re-garding other categories of hospital organi-zations or facilities, a tribal facility that isnot required by a state to be licensed, regis-tered, or similarly recognized as a hospitalis not a “hospital facility” for purposes ofsection 501(r), and a section 501(c)(3) or-ganization will not be considered a “hospi-tal organization” solely as a result of oper-ating such a tribal facility.

d. Operating a hospital facility through apartnership

Notice 2011–52 stated the intention ofthe Treasury Department and the IRS to in-clude within the definition of “hospital or-ganization” any organization described insection 501(c)(3) that operates a hospitalfacility through a joint venture, limited li-ability company, or other entity treated asa partnership for federal tax purposes. No-tice 2011–52 also requested comments re-garding whether (and under what circum-stances) an organization should not be con-sidered to “operate” a hospital facility forpurposes of section 501(r) as a result of itsowning a small interest (other than a gen-eral partner or similar interest) in an entity

2013–21 I.R.B. 1113 May 20, 2013

treated as a partnership for federal tax pur-poses that operates the hospital facility.

In response to Notice 2011–52, a fewcommenters recommended that a hospi-tal organization generally should not beconsidered to operate a hospital facilitythrough a partnership when it holds a mi-nority interest in that partnership. In defin-ing “minority interest,” commenters sug-gested ownership thresholds ranging fromless than 50 percent to less than 20 per-cent. Commenters stated that a hospital or-ganization with such a minority interest ina hospital facility joint venture would nothave the necessary control over the jointventure to ensure that the hospital facil-ity in question complied with the require-ments of section 501(r).

Another commenter recommended thatsection 501(r) should not apply to a hos-pital facility operated by a partnership ifthe partner described in section 501(c)(3)treats the income derived from that facil-ity as unrelated business taxable income(UBTI) that is taxed under section 511.This commenter argued that the line on theapplicability of section 501(r) should bedrawn based on the taxability of the hospi-tal facility’s income rather than on the ba-sis of a particular percentage of ownership.

Yet another commenter suggested thatthese proposed regulations should providethat an organization that owns a minoritylimited partnership interest in a partnershipthat operates a hospital facility should notbe considered to “operate” that hospital fa-cility for purposes of section 501(r) if theorganization entered into the limited part-nership agreement prior to the date sec-tion 501(r) was enacted (that is, March 23,2010) and has a primary tax-exempt pur-pose other than the provision of commu-nity health care. As an example of such anorganization, this commenter cited a uni-versity medical school that entered into apartnership agreement to operate a hospi-tal facility that gives the university controlover the joint venture sufficient to ensurethe operation of the hospital facility fur-thers its exempt educational purpose, butinsufficient to ensure the hospital facilityis in compliance with section 501(r).

Rev. Rul. 2004–51, 2004–1 C.B. 975,provides that the activities of an entity thatis treated as a partnership for federal taxpurposes are treated as the activities of thetax-exempt partner for purposes of deter-mining whether the tax-exempt partner is

operated exclusively for exempt purposesand engages in an unrelated trade or busi-ness. See also Rev. Rul. 98–15, 1998–1C.B. 718. Consequently, consistent withNotice 2011–52, these proposed regula-tions provide that, as a general rule, a hos-pital organization “operates” a hospital fa-cility if it is a partner in a joint venture,limited liability company, or other entitytreated as a partnership for federal incometax purposes that operates the hospital fa-cility.

However, in light of the comments re-ceived, these proposed regulations providetwo exceptions to this general rule. First,as commenters observed, an organizationwithout the control over the operation ofa hospital facility sufficient to ensure thatthe hospital facility furthers an exemptpurpose is unlikely to have the control suf-ficient to ensure compliance with section501(r). As a general rule, if a tax-exemptpartner does not have control sufficientto ensure that a trade or business activityregularly carried on by the partnershipfurthers (or is substantially related to)its exempt purposes, that activity will beconsidered an unrelated trade or businesswith respect to the tax-exempt partner. SeeRev. Rul. 2004–51; Rev. Rul. 98–15.These proposed regulations provide that ifa section 501(c)(3) partner of a partnershipoperating a hospital facility does nothave control over the operation of thehospital facility sufficient to ensure that theoperation of the hospital facility furthersan exempt purpose described in section501(c)(3) and thus treats the operation ofthe hospital facility, including the facility’sprovision of medical care, as an unrelatedtrade or business, the hospital organizationwill not be considered to “operate” thehospital facility for purposes of section501(r).

Second, as another commenter ob-served, some tax-exempt organizationsmay have entered into partnership ar-rangements prior to the enactment ofsection 501(r) that gave them control overa partnership sufficient to ensure that thepartnership furthers charitable purposesother than the provision of communityhealth care, but not sufficient to ensurecompliance with section 501(r). In re-sponse to this comment, these proposedregulations provide a grandfather ruleunder which a hospital organization willnot be considered to “operate” a hospital

facility for purposes of section 501(r) ifcertain conditions are met. First, at alltimes since March 23, 2010, the hospitalorganization must have been organizedand operated primarily for educational orscientific purposes and must not have en-gaged primarily in the operation of one ormore hospital facilities. Second, pursuantto a partnership arrangement (includingany side agreements) entered into beforeMarch 23, 2010, the hospital organizationmust not own more than 35 percent of thecapital or profits interest in the partner-ship, not own a general partner or similarinterest, and not have sufficient controlover the operation of the hospital facilityto ensure that the hospital facility complieswith the requirements of section 501(r).

Finally, like both Notice 2011–52 andthe 2012 proposed regulations, these pro-posed regulations make clear that a hospi-tal organization operates a hospital facilityif it operates a hospital facility through awholly-owned entity that is disregarded asseparate from the hospital organization forfederal tax purposes.

e. Activities unrelated to the operation ofa hospital facility

In response to Notice 2010–39, a fewcommenters asked whether the require-ments of section 501(r) apply to thoseaspects of a hospital organization’s oper-ations that do not relate to the operationof a hospital facility. Section 501(r)(2)(B)provides that the requirements of sec-tion 501(r) apply separately with respectto each of the hospital facilities a hos-pital organization operates. Similarly,§1.501(r)–2 of these proposed regulations(which describes consequences for fail-ing to satisfy the requirements of section501(r)) only applies to circumstances inwhich a hospital organization fails to meetone or more of the requirements of sec-tion 501(r) “separately with respect to oneor more hospital facilities” it operates.Thus, the Treasury Department and theIRS intend that a hospital organization isnot required to meet the requirements ofsection 501(r) with respect to any activi-ties unrelated to the operation of a hospitalfacility. For example, if a hospital or-ganization operates a facility that is notrequired to be licensed as a hospital bythe state in which the facility is located,the hospital organization is not required

May 20, 2013 1114 2013–21 I.R.B.

to meet the requirements of section 501(r)with respect to that facility.

f. Authorized body of a hospitalorganization or facility

For purposes of determining whether ahospital organization has established a pol-icy required under section 501(r)(4) for ahospital facility it operates, the 2012 pro-posed regulations would require an autho-rized body to adopt the policy for the hos-pital facility. The 2012 proposed regula-tions define the term “authorized body” toinclude: (1) the governing body (that is,the board of directors, board of trustees,or equivalent controlling body) of the hos-pital organization; (2) a committee of, orother party authorized by, the governingbody of the hospital organization, to theextent permitted under state law; or (3) inthe case of a hospital facility that has itsown governing body and is recognized asan entity under state law but is a disre-garded entity for federal tax purposes, thegoverning body of that hospital facility, ora committee of, or other party authorizedby, that governing body to the extent per-mitted under state law.

Because the definition of an “autho-rized body” of a hospital facility thatadopts a CHNA report or implementationstrategy required under section 501(r)(3)should be the same as the definition of an“authorized body” for purposes of section501(r)(4), the term “authorized body of ahospital facility” is defined in §1.501(r)–1of these proposed regulations so that itmay apply for purposes of both the sec-tion 501(r)(3) and the section 501(r)(4)requirements.

2. Failures to Satisfy the Requirements ofSection 501(r)

a. Minor and inadvertent omissions anderrors

Numerous commenters to Notice2010–39 requested guidance on the con-sequences of failing to meet one or moreof the requirements of section 501(r). Inaddition, commenters have noted that theguidance released so far on section 501(r)(in Notice 2011–52 and the 2012 proposedregulations) has proposed multiple spe-cific requirements, and that hospitals, aslarge complex institutions, may experi-ence minor and inadvertent compliance

failures notwithstanding their good faithefforts to comply with the requirements.Commenters representing hospitals ex-pressed the view that a failure to meet asection 501(r) requirement should only re-sult in adverse consequences for a hospitalorganization if the failure is a substantialone. The Treasury Department and theIRS received similar informal commentsfrom patient advocates. Commentersalso recommended that no adverse con-sequences should result from a hospitalorganization’s failure if the organizationcorrects the failure, with many of thesecommenters specifically suggesting thatsuch corrections be required to be made“by the end of the fiscal year being re-ported.”

The Treasury Department and the IRSrecognize that minor and inadvertent er-rors may occur even in circumstances inwhich a hospital facility has practices andprocedures in place that are reasonablydesigned to facilitate overall compliancewith section 501(r) and has implementedsafeguards reasonably calculated to pre-vent errors. Therefore, these proposed reg-ulations provide that a hospital facility’somission of required information from apolicy or report described in §1.501(r)–3or §1.501(r)–4, or error with respect tothe implementation or operational require-ments described in §1.501(r)–3 through§1.501(r)–6, will not be considered a fail-ure to meet a requirement of section 501(r)if the omission or error was minor, inadver-tent, and due to reasonable cause, and thehospital facility corrects such omission orerror as promptly after discovery as is rea-sonable given the nature of the omission orerror.

b. Excusing certain failures if a hospitalfacility corrects and makes disclosure

With respect to omissions or errors thatrise above the level of minor and inadver-tent, the Treasury Department and the IRSrecognize that a hospital facility’s promptdiscovery and correction of such omis-sions or errors is in the best interests of pa-tients and that requiring hospital facilitiesto report such omissions or errors and dis-close how such omissions or errors werecorrected (for example, on the Form 990)would achieve transparency, which is animportant objective of section 501(r). In-creased transparency, in turn, will permit

organizations concerned with communityhealth needs to use this information to pro-mote adoption of practices and proceduresthat advance the goals of the section 501(r)requirements and encourage promulgationof best practices. To provide an incen-tive for hospital facilities to take steps notonly to avoid errors but to correct and pro-vide disclosure when they occur, the Trea-sury Department and the IRS will issue arevenue procedure, notice, or other guid-ance published in the Internal RevenueBulletin which will provide that a hospi-tal facility’s failure to meet one or more ofthe requirements described in §1.501(r)–3through §1.501(r)–6 that is neither willfulnor egregious will be excused if the hos-pital facility corrects and provides disclo-sure in accordance with the rules set forthin the guidance. The Treasury Departmentand the IRS anticipate that this guidancewill provide that correction and disclosureshould be reasonable and appropriate forthe failure at issue.

For purposes of this provision, willful isto be interpreted consistent with the mean-ing of that term in the context of civilpenalties, which would include a failuredue to gross negligence, reckless disre-gard, or willful neglect. Furthermore, cor-rection and disclosure will not create a pre-sumption that the failure was neither will-ful nor egregious.

The Treasury Department and the IRSintend to issue the guidance regarding cor-rection and disclosure in proposed form inorder to provide an opportunity to com-ment on the procedures described therein.

c. Facts and circumstances consideredin determining whether to revoke section501(c)(3) status

Section 501(r)(1) provides that a hos-pital organization will not be treated asdescribed in section 501(c)(3) unless itmeets the requirements of section 501(r).These proposed regulations interpret thislanguage as giving the IRS the authorityto revoke a hospital organization’s sec-tion 501(c)(3) status if the organizationfails to meet one or more requirementsof section 501(r). However, the TreasuryDepartment and the IRS agree with com-menters that the IRS should consider therelative size, scope, nature, and signifi-cance of any failures to meet the section501(r) requirements, as well as the reasons

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for such failures and whether the sametype of failures have previously occurred,when determining whether revocation ofsection 501(c)(3) status is warranted. Inaddition, the Treasury Department and theIRS consider it desirable that these pro-posed regulations provide incentives for ahospital facility to establish and routinelyfollow practices and procedures reason-ably designed to promote and facilitateoverall compliance with the section 501(r)requirements and identify any problemsthat arise and the reasons for their occur-rence. Hospital facilities should also haveincentives to correct any section 501(r)failures as promptly after discovery as isreasonable given the nature of the failureand implement safeguards reasonably cal-culated to prevent similar failures fromoccurring in the future. Accordingly, theseproposed regulations provide that the IRSwill consider all of these facts and circum-stances in determining whether to continueto recognize the section 501(c)(3) statusof a hospital organization that fails tomeet one or more requirements of section501(r). In general, the Treasury Depart-ment and the IRS expect that applicationof these facts and circumstances will or-dinarily result in revocation of the section501(c)(3) status of a hospital organizationif the organization’s failures to meet therequirements of section 501(r) are willfulor egregious.

d. Taxation of noncompliant hospitalfacilities

A number of commenters recom-mended that if a hospital organizationfails to meet a section 501(r) requirementwith respect to a particular hospital facil-ity it operates, only that hospital facilityshould be treated as not described in sec-tion 501(c)(3), and the facility’s failureshould not negate the tax exemption ofthe hospital organization as a whole. Afew commenters recommended that if ahospital organization ceases to qualifyas an organization described in section501(c)(3) with respect to a particular hos-pital facility but continues to qualify as anorganization described in section 501(c)(3)overall, then any net income derived fromthe disqualified facility should be subjectto the unrelated business income tax undersection 511.

Section 501(r)(2)(B)(ii) provides that ahospital organization operating more thanone hospital facility shall not be treated asdescribed in section 501(c)(3) with respectto any such hospital facility for which therequirements of section 501(r)(1) are notseparately met (a “noncompliant hospitalfacility”). Status under section 501(c)(3) isdetermined at the organizational level, andtreating an organization as not describedin section 501(c)(3) “with respect to” aparticular hospital facility it operates (ora particular branch, division, or activityof the organization) has no generally rec-ognized meaning under the provisions ofthe Code governing tax-exempt organiza-tions. Notwithstanding this fact, the lan-guage in section 501(r)(2)(B)(ii) suggeststhat a particular noncompliant hospital fa-cility operated by a hospital organizationwith more than one facility may be treatedas not described in section 501(c)(3) with-out affecting the section 501(c)(3) statusof the hospital organization. A noncom-pliant hospital facility that is treated as notdescribed in section 501(c)(3), but that isowned and operated by a hospital organ-ization that continues to be described insection 501(c)(3), cannot be described inanother subsection of 501(c) (such as sec-tion 501(c)(4)), since the plain languageof section 501(c) makes clear that only or-ganizations (not facilities, branches, divi-sions, or other components of organiza-tions) can be described in any one subsec-tion of 501(c). Thus, these proposed regu-lations interpret section 501(r)(2)(B)(ii) tomean that a hospital organization that is nottreated as described in section 501(c)(3)“with respect to” a particular noncompli-ant hospital facility ceases to be exemptfrom taxation under section 501(a) with re-spect to that facility, even while the hospi-tal organization as a whole (with respect toits other hospital facilities and activities)continues to be otherwise exempt fromtaxation under section 501(a) because it isdescribed in section 501(c)(3).

Accordingly, these proposed regula-tions provide that if a hospital organizationoperating more than one hospital facilityfails to meet one or more of the require-ments of section 501(r) separately withrespect to a hospital facility during a tax-able year but continues to be recognized asdescribed in section 501(c)(3), the incomederived from the noncompliant hospitalfacility during that taxable year will be

subject to tax computed as provided in sec-tion 11 (or as provided in section 1(e) if thehospital organization is a trust describedin section 511(b)(2)). To maintain consis-tency with the treatment of organizationsoperating a single hospital facility, this taxwill apply only if the hospital organiza-tion would not continue to be described insection 501(c)(3) based on the facts andcircumstances described in section 2.c ofthis preamble if the noncompliant hospitalfacility were the only hospital facility thatthe organization operated. This tax wouldnot apply in the event of minor and inad-vertent omissions or errors described insection 2.a of this preamble or of failuresthat are excused in accordance with theguidance described in section 2.b of thispreamble.

In applying the tax, the income derivedfrom a noncompliant hospital facility dur-ing a taxable year will be the gross incomederived from that hospital facility duringthe taxable year, less the deductions al-lowed by chapter 1 of the Code that aredirectly connected to the operation of thathospital facility during the taxable year.These proposed regulations provide thatthis computation will exclude any gross in-come and deductions already taken into ac-count in computing any UBTI described insection 512 derived from the facility dur-ing the taxable year.

To be directly connected with the oper-ation of a noncompliant hospital facility,these proposed regulations provide that anitem of deduction must have proximateand primary relationship to the operationof the hospital facility. Expenses, depreci-ation, and similar items attributable solelyto the operation of a hospital facility areproximately and primarily related to suchoperation, and therefore qualify for de-duction to the extent that they meet therequirements of section 162, section 167,or other relevant provisions of the Code.These proposed regulations further pro-vide that where expenses, depreciation,and similar items are attributable to morethan one hospital facility operated by thehospital organization (and/or to activitiesof the hospital organization unrelated tothe operation of hospital facilities), suchitems shall be allocated between the hos-pital facilities (and/or other activities) ona reasonable basis.

In addition, these proposed regulationsprovide the gross income and allowed

May 20, 2013 1116 2013–21 I.R.B.

deductions of a noncompliant hospitalfacility may not be aggregated with thegross income and allowed deductions ofthe hospital organization’s other noncom-pliant hospital facilities or its unrelatedtrade or business activities described insection 513. Thus, a hospital organizationoperating more than one noncomplianthospital facility that is subject to the facil-ity-level tax must compute each facility’staxable income separately and may not usenet operating losses from one noncom-pliant hospital facility to offset taxableincome derived from another noncompli-ant hospital facility. Similarly, a hospitalorganization may not use net operatinglosses from a noncompliant hospital facil-ity to offset any UBTI derived from theorganization’s unrelated trade or businessactivities.

A number of commenters expressedconcern that interest on bonds issued asqualified 501(c)(3) bonds to finance ahospital facility will become taxable if thefacility fails one or more requirements ofsection 501(r). These proposed regula-tions make clear that if a hospital organi-zation operating a noncompliant hospitalfacility continues to be recognized as de-scribed in section 501(c)(3) and otherwiseexempt from tax under section 501(a), thefact that a facility-level tax is imposed asa result of the facility’s failure to complywith section 501(r) will not itself cause theinterest on such bonds to be taxable.

Finally, these proposed regulationsmake clear that the facility-level tax de-scribed in this section 2.d of the preamblewill be reported on the Form 990-T.

3. Community Health Needs Assessments

Consistent with section 501(r)(3)(A),these proposed regulations provide that ahospital organization meets the require-ments of section 501(r)(3) in any taxableyear with respect to a hospital facility itoperates only if the hospital facility hasconducted a CHNA in such taxable year orin either of the two immediately precedingtaxable years and an authorized body ofthe hospital facility has adopted an imple-mentation strategy to meet the communityhealth needs identified through the CHNAby the end of the taxable year in whichthe hospital facility conducts the CHNA.In general, these proposed regulations areconsistent with the anticipated rules de-

scribed in Notice 2011–52, with certainmodifications intended to be responsive tothe more than 80 comments received onNotice 2011–52.

a. Conducting a community health needsassessment

In conducting a CHNA, these proposedregulations provide that a hospital facilitymust define the community it serves andassess the health needs of that community.In assessing the community’s health needs,the hospital facility must, consistent withsection 501(r)(3)(B)(i), take into accountinput from persons who represent thebroad interests of its community, includingthose with special knowledge of or exper-tise in public health. The hospital facilitymust also document the CHNA in a writtenreport (“CHNA report”) that is adopted forthe hospital facility by an authorized bodyof the hospital facility. Finally, consistentwith section 501(r)(3)(B)(ii), the hospi-tal facility must make the CHNA reportwidely available to the public. These pro-posed regulations provide that a CHNAis considered “conducted” on the date thehospital facility has completed all of thesesteps. Because a hospital facility mustmake a CHNA report widely availableto the public continuously for a numberof years (as discussed in section 3.a.vi ofthis preamble), these proposed regulationsclarify that a hospital facility is consideredto have completed the step of making theCHNA report widely available to the pub-lic on the date it first makes the CHNAreport widely available to the public.

i. Community Served by the HospitalFacility

Notice 2011–52 stated the intentionof the Treasury Department and the IRSto allow a hospital facility to take intoaccount all of the relevant facts and cir-cumstances in defining the community itserves. Notice 2011–52 noted that, gener-ally, the Treasury Department and the IRSwould expect a hospital facility’s com-munity to be defined geographically butthat, in some cases, the definition mightalso take into account target populationsserved or specialized functions. Notwith-standing this generally flexible approachto defining community, Notice 2011–52stated that a community could not be de-fined in a manner that circumvented the

requirement to assess the health needsof the hospital facility’s community byexcluding, for example, medically under-served populations, low-income persons,minority groups, or those with chronicdisease needs. Finally, Notice 2011–52 re-quested comments on the relative merits ofdifferent geographically-based definitionsof community and, more specifically, onwhether future guidance should define thegeographic community of a hospital fa-cility as the Metropolitan Statistical Area(MSA) or Micropolitan Statistical Area(µSA) in which the facility is located or, ifthe hospital facility is a rural facility notlocated in a MSA or µSA, as the county inwhich the facility is located.

Many commenters supported thefacts-and-circumstances approach todefining a hospital facility’s communityoutlined in Notice 2011–52 and recom-mended against a definition based onspecified geographic boundaries. Thesecommenters noted that each hospital facil-ity is in the best position to determine itscommunity and that requiring the commu-nity to be defined as a specific geographicarea may not be appropriate or corre-spond to the actual populations served,especially in the case of specialized andregional hospitals. These commentersalso recommended against defining thecommunity served by a hospital facilityas the MSA, µSA, or county in which thefacility is located, noting that such areas orpolitically-defined jurisdictions are oftenunrelated to hospital service areas.

Other commenters recommended a ge-ographic definition of community, but re-quested one that would be flexible in themethod of definition (for example, not re-stricted to specific political jurisdictions).A few commenters went further and statedthat the geographic definition of commu-nity should include the political jurisdic-tion in which the hospital facility is locatedor where the hospital facility is an essen-tial provider. These commenters recom-mended against definitions of communitybased on the demographics or residence ofthe hospital facility’s specific patient pop-ulations, noting that a hospital facility’scurrent patient population does not neces-sarily reflect the broader community.

Consistent with Notice 2011–52, theseproposed regulations provide a hospitalfacility with the flexibility to take intoaccount all of the relevant facts and cir-

2013–21 I.R.B. 1117 May 20, 2013

cumstances in defining the communityit serves, including the geographic areaserved by the hospital facility, target pop-ulations served (for example, children,women, or the aged), and principal func-tions (for example, focus on a particularspecialty area or targeted disease). Theseproposed regulations also clarify that ahospital facility may define its communityto include populations in addition to itspatient populations and geographic areasoutside of those in which its patient pop-ulations reside. For example, a hospitalfacility collaborating with other hospi-tal facilities in its MSA in conducting aCHNA may define its community as theentire MSA in which all of the collaborat-ing hospital facilities are located, even ifthe hospital facility itself only generallyserves and draws its patients from a por-tion of that MSA.

While desiring to give a hospital fa-cility the flexibility it needs to define itscommunity served in a manner appropri-ate to its specific facts and circumstances,the Treasury Department and the IRS con-tinue to share the interest expressed bysome commenters in ensuring that hospi-tal facilities assess and address the needsof medically underserved, low-income,and minority populations in the areas theyserve. Thus, similar to the restriction in-cluded in Notice 2011–52, these proposedregulations provide that a hospital facil-ity may not define its community in away that excludes medically underserved,low-income, or minority populations whoare part of its patient populations, live ingeographic areas in which its patient pop-ulations reside (unless they are not part ofthe hospital facility’s target populationsor affected by its principal functions), orotherwise should be included based onthe method used by the hospital facilityto define its community. These proposedregulations clarify that medically under-served populations include populationsexperiencing health disparities or at riskof not receiving adequate medical careas a result of being uninsured or under-insured or due to geographic, language,financial, or other barriers. (For reasonsdiscussed in section 3.a.iii.B of this pre-amble, these proposed regulations do notlist those with chronic disease needs as aseparate category of persons that must notbe excluded.) Finally, if a hospital facility

uses a method of defining its communitythat takes into account patient popula-tions, these proposed regulations requirethe hospital facility to treat as patientsall individuals who receive care from thehospital facility, without regard to whether(or how much) they or their insurers payfor the care received or whether they areeligible for financial assistance.

ii. Assessing Community Health Needs

These proposed regulations providethat in order to “assess” the health needs ofthe community it serves, a hospital facil-ity must identify significant health needsof the community, prioritize those healthneeds, and identify potential measuresand resources (such as programs, organi-zations, and facilities in the community)available to address the health needs. Forthese purposes, health needs include requi-sites for the improvement or maintenanceof health status in both the community atlarge and in particular parts of the com-munity (such as particular neighborhoodsor populations experiencing health dispar-ities). Requisites for the improvement ormaintenance of health status in a commu-nity may include improving access to careby removing financial and other barriersto care, such as a lack of information re-garding sources of insurance designed tobenefit vulnerable populations.

Notice 2011–52 stated the intention ofthe Treasury Department and the IRS torequire a hospital facility to prioritize allof the community health needs identifiedthrough the CHNA. A few commenterssuggested that only the most significantof the likely extensive list of communityhealth needs identified through a CHNAshould have to be prioritized. These pro-posed regulations respond to this commentby clarifying that a CHNA need only iden-tify significant health needs and need onlyprioritize, and otherwise assess, those sig-nificant health needs identified. A hospi-tal facility may determine whether a healthneed is significant based on all of the factsand circumstances present in the commu-nity it serves.

A few commenters asked for addi-tional guidance regarding how a CHNAshould prioritize community health needs.These proposed regulations do not requirea hospital facility to use any particular

methods or criteria in prioritizing healthneeds. They do, however, list as possi-ble examples of prioritization criteria theburden, scope, severity, or urgency of thehealth need; the estimated feasibility andeffectiveness of possible interventions;the health disparities associated with theneed; and/or the importance the commu-nity places on addressing the need. Thislist of possible prioritization criteria is notintended to be exhaustive, and a hospitalfacility may use any criteria it deems ap-propriate.

iii. Persons Representing the BroadInterests of the Community

In assessing the health needs of thecommunity it serves, these proposedregulations require a hospital facility to(consistent with section 501(r)(3)(B)(i))take into account input from persons whorepresent the broad interests of the com-munity served by the hospital facility,including those with special knowledgeof or expertise in public health. Specifi-cally, these proposed regulations requirea hospital facility to take into accountinput from, at a minimum: (1) at leastone state, local, tribal, or regional gov-ernmental public health department (orequivalent department or agency) withknowledge, information, or expertise rele-vant to the health needs of the community;(2) members of medically underserved,low-income, and minority populations inthe community, or individuals or organiza-tions serving or representing the interestsof such populations; and (3) written com-ments received on the hospital facility’smost recently conducted CHNA and mostrecently adopted implementation strategy.

Notice 2011–52 stated that the Trea-sury Department and the IRS intended torequire a CHNA to take into account inputfrom, at a minimum: (1) persons with spe-cial knowledge of or expertise in publichealth; (2) federal, tribal, regional, state, orlocal health or other departments or agen-cies, with current data or other informationrelevant to the health needs of the com-munity served by the hospital facility; and(3) leaders, representatives, or membersof medically underserved, low-income,and minority populations, and populationswith chronic disease needs, in the commu-nity served by the hospital facility.

May 20, 2013 1118 2013–21 I.R.B.

A. Governmental public healthdepartments

With respect to the requirement de-scribed in Notice 2011–52 to take into ac-count input from federal, tribal, regional,state, or local health or other departments,many commenters urged that a hospitalfacility should be able to choose the leveland type of governmental public healthdepartment from which it seeks input,noting that not every local jurisdiction hasa local public health department. On theother hand, a number of public health or-ganizations suggested that these proposedregulations should require a hospital facil-ity to consult with the state public healthdepartment in the state where the hospitalfacility is licensed and/or the local publichealth department in the local jurisdic-tion where the hospital facility is located.These organizations noted that such de-partments can play a critically importantrole in coordinating CHNA efforts andprovide expertise in CHNA planning andexecution, access to existing health data,and knowledge of local conditions, needs,and resources.

These proposed regulations preservethe flexibility in Notice 2011–52 of al-lowing a hospital facility to choose thejurisdictional level of government (for ex-ample, state, local, tribal, or regional) thatit feels is most appropriate for its CHNA.These proposed regulations do not requirea hospital facility to seek input from alocal public health department, in partic-ular, in recognition of some commenters’observation that not all jurisdictions willhave local public health departments avail-able to participate in the CHNA process.However, in recognition of the planningand subject-matter expertise that publichealth departments can offer to the CHNAprocess, a hospital facility is required toseek input from a public health department(or equivalent department or agency) inparticular, rather than any governmentaldepartments with current data or otherinformation relevant to the health needsof the community (as described in Notice2011–52). Such input could include inputfrom the state public health official or anylocal public health official.

In addition, given commenters’ empha-sis on the importance of input from pub-lic health departments at the state or locallevel, these proposed regulations require a

hospital facility to seek input from a pub-lic health department at a state or local, nota federal, level. Because a governmentalpublic health department presumably hasspecial knowledge of or expertise in pub-lic health, requiring input from a publichealth department eliminates the need for aseparate requirement to consult with a per-son with special knowledge of or exper-tise in public health (as provided in Notice2011–52).

B. Medically underserved, low-income,and minority populations

Commenters generally supported thepurpose behind the requirement to takeinto account input from medically un-derserved, low-income, and minoritypopulations in the community but askedfor clarification on who may be consid-ered “leaders” or “representatives” of suchpopulations. One commenter noted thatthe term “chronic disease needs” is broadand could potentially require a hospitalfacility to seek input from a large numberof individuals in order to address everychronic disease in its community.

These proposed regulations maintainthe requirement to take into account inputfrom medically underserved, low-income,and minority populations in the commu-nity served by the hospital facility butrespond to comments by clarifying andsimplifying the approach taken in No-tice 2011–52. To address the numerouscomments expressing confusion over theterms “leaders” and “representatives” ofsuch populations, these proposed regula-tions clarify that a hospital facility mayseek input either directly from members ofmedically underserved, low-income, andminority populations in the community(for example, in the form of meetings,focus groups, surveys, or interviews) orfrom individuals or organizations serv-ing or representing the interests of thosepopulations. To address the concern withrequiring input related to every chronicdisease in a community, these proposedregulations do not refer to chronic dis-ease needs in particular but rather define“medically underserved populations” in amanner that focuses on disparities in cov-erage, access, and other barriers to carefor persons with health needs that mayinclude, but are not limited to, chronicdiseases.

C. Written comments

A few commenters recommended aninput requirement not contained in No-tice 2011–52: a requirement that a hos-pital facility take into account public in-put and comments on a draft version ofits CHNA report before the report is final-ized. These commenters noted the impor-tance of a public comment process for en-suring that the CHNA accurately reflectsthe community’s views and priorities andadequately analyzes available data.

These proposed regulations do notadopt the specific recommendations torequire hospital facilities to make a draftcopy of a CHNA report available for pub-lic comment due to the complexity of theadditional timeframes and procedures sucha process would require. However, theTreasury Department and the IRS recog-nize the value of providing a mechanismfor public feedback on CHNA reports andtheir related implementation strategies.Therefore, these proposed regulations re-spond to these comments by requiring ahospital facility to consider written com-ments received from the public on thehospital facility’s most recently conductedCHNA and most recently adopted im-plementation strategy. (As discussed insection 4 of this preamble, the public willbe able to review a hospital facility’s mostrecently adopted implementation strategybecause it will either be attached to theForm 990 of the hospital organization thatoperates it or made widely available on aWeb site.) Because a new CHNA must beconducted and an implementation strategyadopted at least once every three years,this requirement establishes the same sortof continual feedback on CHNA reportssuggested by commenters, albeit over alonger period of time. It is anticipated thatthis opportunity for feedback on CHNAreports and implementation strategies willresult in a meaningful exchange over timeand that the longer timeframe will givethe public sufficient time to provide com-ments and hospital facilities sufficienttime to consider the public’s commentsand take the comments into account whenconducting their next CHNA. In addi-tion, as discussed in section 3.a.vi of thispreamble, to help facilitate the option ofposting a draft CHNA report for publicreview and comment, these proposed reg-ulations provide that the posting of draft

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CHNA reports will not trigger the start ofa hospital facility’s next three-year CHNAcycle.

D. Input on financial and other barriersand from other sources

In addition, some commenters recom-mended that a hospital facility should berequired to integrate evaluations of finan-cial assistance policies and procedures andthe need for uncompensated care into itsCHNA. The Treasury Department and theIRS recognize that the need to improveaccess to care by removing financial bar-riers can be among the significant healthneeds assessed in a CHNA. Accordingly,these proposed regulations provide that in-put from persons representing the broad in-terests of the community includes, but isnot limited to, input on any financial andother barriers to access to care in the com-munity.

Finally, similar to Notice 2011–52,these proposed regulations provide that ahospital facility may take into account in-put from a broad range of persons locatedin or serving its community who may havespecial knowledge of or expertise in publichealth, including, but not limited to, healthcare consumers and consumer advocates,nonprofit and community-based organiza-tions, academic experts, local governmentofficials, local school districts, health careproviders and community health centers,health insurance and managed care organi-zations, private businesses, and labor andworkforce representatives. As discussedin section 3.a.vi of this preamble, one wayfor a hospital facility to take into accountinput from such a broad range of persons isto pursue the option of posting on its Website a draft CHNA report for public reviewand comment. The Treasury Departmentand the IRS believe a CHNA with broadinput from the community can increasethe likelihood of well-targeted initiativesthat address the needs of communities andimprove the health of residents.

iv. Documentation of a CHNA

Similar to the documentation rule de-scribed in Notice 2011–52, these proposedregulations provide that a hospital facilitymust document its CHNA in a CHNA re-port that is adopted by an authorized bodyof the hospital facility and includes: (1)

a definition of the community served bythe hospital facility and a description ofhow the community was determined; (2)a description of the process and methodsused to conduct the CHNA; (3) a descrip-tion of how the hospital facility took intoaccount input from persons who representthe broad interests of the community itserves; (4) a prioritized description of thesignificant health needs of the communityidentified through the CHNA, along with adescription of the process and criteria usedin identifying certain health needs as sig-nificant and prioritizing such significanthealth needs; and (5) a description of po-tential measures and resources identifiedthrough the CHNA to address the signif-icant health needs.

Like Notice 2011–52, the proposed reg-ulations provide more detail about two ofthese required elements of the CHNA re-port: the description of the process andmethods used to conduct the CHNA andthe description of how the hospital facil-ity took into account input from personswho represent the broad interests of thecommunity. However, in response to com-ments about the need for greater flexibil-ity, these proposed regulations provide thata hospital facility’s CHNA report “will beconsidered to” describe each of these el-ements if it contains certain informationinstead of prescribing a single method ofmeeting the requirement.

A. Description of process and methods

These proposed regulations providethat a hospital facility’s CHNA report willbe considered to describe the process andmethods used to conduct the CHNA ifthe CHNA report: (1) describes the dataand other information used in the assess-ment, as well as the methods of collectingand analyzing this data and information,and (2) identifies any parties with whomthe hospital facility collaborated, or withwhom it contracted for assistance, in con-ducting the CHNA.

B. Description of community input

In describing how the hospital facilitytook into account input from persons whorepresent the broad interests of the com-munity it serves, Notice 2011–52 statedthat a hospital facility would have to de-scribe when and how the organization

consulted with such persons. A numberof commenters sought clarification thata general summary of “when and how”would be sufficient. Specifically, some ofthese commenters noted that a detailed ac-count of each instance of feedback couldbe quite burdensome and may create theimpression that less formal interactionswith community members are insufficientor unworthy of consideration or hinder thefree flow of information.

In response to these comments, theseproposed regulations clarify that theCHNA report may summarize, in generalterms, how and over what time periodinput was provided (for example, whetherthrough meetings, focus groups, inter-views, surveys, or written comments andbetween what dates) and need not providea detailed description of each instance offeedback. These proposed regulations alsoclarify that the CHNA report may containa general summary of the input received.Thus, for example, a hospital facility maydescribe a series of town hall meetingsby noting that four meetings were heldover a three-month period and generallysummarizing the input received, withoutnecessarily having to provide the specificdates of each meeting, a list of attendees,or minutes of the discussion.

Notice 2011–52 stated that a hospitalfacility taking into account input from anorganization would be required to iden-tify in the CHNA report not only the or-ganization but also the name and title ofat least one individual in the organizationwith whom the hospital facility consulted.Commenters, however, were generally op-posed to inclusion in the publicly avail-able CHNA report of the names and rolesof private individuals who gave input intothe CHNA process, noting that the infor-mation may not add much value to theoverall CHNA but could raise privacy con-cerns and deter individuals from provid-ing input. In response to these comments,these proposed regulations do not specif-ically require the CHNA report to con-tain the names or titles of any individu-als contacted within an organization. Inaddition, the proposed regulations specifythat a CHNA report does not need to nameor otherwise individually identify any in-dividuals participating in community fo-rums, focus groups, survey samples, orsimilar groups.

May 20, 2013 1120 2013–21 I.R.B.

However, the Treasury Departmentand the IRS continue to believe that aCHNA report should identify the orga-nizations that provided input into theCHNA and summarize the nature and ex-tent of that input. In addition, a CHNAreport should describe the medicallyunderserved, low-income, or minoritypopulations being represented by the or-ganizations or individuals providing input.Accordingly, these proposed regulationsprovide that a hospital facility’s CHNAreport will be considered to describe howthe hospital facility took into account inputif the CHNA report: (1) summarizes, ingeneral terms, the input provided and howand over what time period such input wasprovided; (2) provides the names of orga-nizations providing input and summarizesthe nature and extent of the organization’sinput; and (3) describes the medicallyunderserved, low-income, or minoritypopulations being represented by organi-zations or individuals providing input.

The Treasury Department and the IRSrequest comments regarding whether theseproposed rules provide for sufficient dis-closure regarding the community inputinto a CHNA report, or whether the CHNAreport should be required to provide anyother information regarding input pro-vided, in order to ensure transparency inthe CHNA process.

C. Description of prioritization of thecommunity’s health needs and of potentialmeasures and identified resources toaddress such needs

With respect to the requirement inNotice 2011–52 to describe the existinghealth care facilities and other resourceswithin the community available to meetthe health needs identified through theCHNA, many commenters asked that thedescription of these resources be limitedto known or available facilities and re-sources. These commenters argued that acommunity-wide inventory of health careresources is not the responsibility of anyone hospital facility, but rather a task moreappropriate to public health departments.Accordingly, these proposed regulationslimit the description of resources availableto address health needs to those known oridentified in the course of conducting theCHNA.

Additional commenters remarked thatboth the prioritization of health needs anda description of resources available to meetthe health needs identified through theCHNA are more appropriate in an imple-mentation strategy than in a CHNA report.On the other hand, other commentersnoted the importance of community inputin the overall CHNA process and soughtan opportunity to provide input on po-tential interventions and programs thatmay be included in a hospital facility’simplementation strategy. In fact, suchcommenters asked that the implementa-tion strategy, in addition to the CHNA, besubject to public input and made widelyavailable to the public.

The Treasury Department and the IRSrecognize that conducting a CHNA anddeveloping an implementation strategy arepart of one fluid process, with no definitepoint at which the CHNA ends and theimplementation strategy begins. Prioritiz-ing health needs and identifying potentialmeasures and resources to address healthneeds, for example, could reasonably beinterpreted as part of “assessing” thosehealth needs or, alternatively, as the firststep in devising a strategy to meet thoseneeds. Accordingly, these proposed reg-ulations respond to commenters’ requestsfor enhanced transparency and an oppor-tunity for community input by requiringitems that could reasonably be includedas part of either the CHNA or the im-plementation strategy to be described inthe CHNA report. Thus, these proposedregulations require the CHNA report toinclude a prioritized description of thesignificant health needs of the communityidentified through the CHNA, along witha description of the process and criteriaused in prioritizing these health needs.These proposed regulations also requirethe CHNA report to include a descriptionof the potential measures and resourcesidentified through the CHNA to addressthe significant health needs.

v. Collaboration on CHNA Reports

Notice 2011–52 stated that the Trea-sury Department and the IRS intend toallow a hospital organization to conduct aCHNA in collaboration with other orga-nizations, including related organizations,other hospital organizations, for-profit andgovernment hospitals, and public health

and other departments of state and localgovernments. However, even in caseswhere collaboration between hospitalsoccurs, Notice 2011–52 stated that theTreasury Department and the IRS intendedto require each hospital facility to doc-ument its CHNA in a separate writtenreport. Many commenters recommendedthat when several hospital facilities withinthe same defined community work col-laboratively on a CHNA, they should beable to issue a joint CHNA report or sep-arate CHNA reports that are substantivelyidentical. These commenters argued thatjoint reporting would encourage collab-oration, reduce redundancy and expense,and provide a more coherent picture ofthe community’s health needs. Some ofthese commenters suggested that the jointCHNA report could be required to con-tain different sections for each particularhospital facility. On the other hand, othercommenters recommended retaining therequirement for separate CHNA reports,noting that facility-level reporting ensuresthat information for each hospital facilityis clearly presented and easily accessible.

In balancing these concerns, these pro-posed regulations provide, generally, thatevery hospital facility must document itsCHNA in a separate CHNA report. How-ever, these proposed regulations providethat if a hospital facility is collaboratingwith other facilities and organizationsin conducting its CHNA or is basing itsCHNA, in part, on a CHNA for all or partof its community conducted by anotherorganization, portions of the hospital facil-ity’s CHNA report may be substantivelyidentical to the CHNA report of a collabo-rating hospital facility or the other organi-zation conducting a CHNA, if appropriateunder the facts and circumstances. Forexample, if a hospital facility conducts asurvey of the health needs of residents ofhomeless shelters located in the commu-nity in collaboration with other hospitalfacilities, the description of that survey inthe hospital facility’s CHNA report may beidentical to the description contained in theCHNA reports for the other collaboratinghospital facilities. Similarly, if the state orlocal public health department with juris-diction over the community served by thehospital facility conducts an inventory ofcommunity health improvement resourcesavailable in that community, the hospital

2013–21 I.R.B. 1121 May 20, 2013

facility may include that inventory in itsCHNA report.

These proposed regulations also pro-vide an exception to the general require-ment of separate CHNA reports: namely,if a hospital facility collaborates withother hospital facilities in conducting itsCHNA, all of the collaborating hospital fa-cilities may produce a joint CHNA reportas long as all of the facilities define theircommunity to be the same and conduct ajoint CHNA process. In addition, the jointCHNA report must clearly identify eachhospital facility to which it applies and anauthorized body of each collaborating hos-pital facility must adopt the joint CHNAreport as its own.

Thus, for example, if a hospital facil-ity collaborates with nine other hospital fa-cilities that are all located in and servinga particular MSA, all ten hospital facili-ties define their community as constitutingthe entire MSA, and all ten hospital facil-ities conduct a joint CHNA process, theten hospital facilities may prepare a jointCHNA report that identifies all of the col-laborating hospital facilities by name. Un-der these proposed regulations, such a jointCHNA report would satisfy the require-ment to document the CHNA in a writtenCHNA report for any one of the collabo-rating hospital facilities as long as the jointCHNA report is adopted by an authorizedbody of the hospital facility.

vi. Making the CHNA Report WidelyAvailable to the Public

Consistent with Notice 2011–52, theseproposed regulations provide that in orderto make its CHNA report widely availableto the public, a hospital facility must postthe CHNA report on the hospital facility’sWeb site or, if the hospital facility does nothave its own Web site separate from thehospital organization that operates it, onthe hospital organization’s Web site. Al-ternatively, the hospital facility may postthe CHNA report on a Web site establishedand maintained by another entity as longas either the hospital facility or hospital or-ganization’s Web site (if the facility or or-ganization has a Web site) provides a linkto the web page on which the CHNA reportis posted, along with clear instructions foraccessing the report on that Web site. Inaddition, the hospital facility must ensurethat individuals with access to the Inter-

net can access, download, view, and print ahard copy of the CHNA report without re-quiring special computer hardware or soft-ware (other than software that is readilyavailable to members of the public with-out payment of any fee) and without pay-ment of a fee to the hospital facility, hos-pital organization, or other entity maintain-ing the Web site. Finally, the hospital facil-ity must provide individuals who ask howto access a copy of the CHNA report onlinewith the direct Web site address, or URL,of the web page on which the document isposted.

Commenters generally supported therequirement outlined in Notice 2011–52 tomake the CHNA report widely availableon a Web site. Many of these commentersbelieved that this Web posting require-ment alone was sufficient to make theCHNA report widely available to the pub-lic. Others, however, urged the TreasuryDepartment and the IRS to expand therequirements for making a CHNA widelyavailable to the public to require the hos-pital facility to provide paper copies of theCHNA report for free to any individual re-questing it. Some commenters requested arequirement that the hospital facility iden-tify strategies to inform various sectors ofthe community that the CHNA report iswidely available on a Web site.

A few commenters also recommendedexpanding the requirements associatedwith making CHNA reports widely avail-able on a Web site. Some commentersrecommended requiring that the CHNAreports be conspicuously posted on theapplicable Web site, for example by re-quiring a highly visible link on the Website’s homepage. Another commenterrecommended requiring past, as well ascurrent, CHNA reports to be posted, todemonstrate improvement of health careobjectives over the long term. Yet anothercommenter recommended requiring thatindividuals do not need to provide person-ally identifiable information or create anaccount to access the CHNA report.

Because of the focus on increased trans-parency of hospital facilities in section501(r), the Treasury Department and theIRS have adopted most of the commentsseeking to enhance transparency of a hos-pital facility’s CHNA by expanding therequirements to make the CHNA reportwidely available to the public. Specif-ically, these proposed regulations make

four changes to the interim rule describedin Notice 2011–52 for making the CHNAreport widely available to the public. First,these proposed regulations require a com-plete version of the CHNA report to be“conspicuously” posted on a Web site, toensure that the CHNA report can be easilylocated on the Web site. Second, insteadof requiring the CHNA report to be postedon the Web site until the next CHNA re-port is posted, these proposed regulationsrequire the CHNA report to remain onthe Web site until two subsequent CHNAreports have been posted, so informationon trends will be available to the public.Third, these proposed regulations add thatan individual must not be required to cre-ate an account or otherwise be required toprovide personally identifiable informa-tion in order to access the CHNA reporton a Web site. Fourth, these proposedregulations add a requirement that a hos-pital facility must make a paper copy of itsCHNA report available for public inspec-tion without charge at the hospital facilityat least until the date the hospital facilityhas made available for public inspection,without charge, a paper copy of its twosubsequent CHNAs.

Because the requirement to make adocument “widely available on a Website” applies not only to a hospital facil-ity’s CHNA reports but also, under the2012 proposed regulations, to its financialassistance policy and related documents,the term “widely available on a Web site”is defined in the definitions section ofthese proposed regulations and will applyto both rules.

Finally, to facilitate the sharing of draftversions of the CHNA report for commentas requested by some commenters, theseproposed regulations provide that a hospi-tal facility will not be considered to havemade the CHNA report widely availableto the public for purposes of determiningthe date on which the hospital facility hasconducted the CHNA if it makes widelyavailable on a Web site (and/or for pub-lic inspection) a version of the CHNA re-port that is expressly marked as a draft onwhich the public may comment. Thus, ahospital facility may post a draft CHNA re-port for public review and comment with-out starting its next three-year CHNA cy-cle.

May 20, 2013 1122 2013–21 I.R.B.

b. Implementation strategies

Notice 2011–52 noted the intention ofthe Treasury Department and the IRS todefine an “implementation strategy” for ahospital facility as a written plan that ad-dresses each of the health needs identi-fied through a CHNA for the facility. No-tice 2011–52 further provided that an im-plementation strategy would “address” ahealth need identified through a CHNAif the written plan either: (1) describeshow the hospital facility plans to meet thehealth need, or (2) identifies the healthneed as one the hospital facility does notintend to meet and explains why the hos-pital facility does not intend to meet thehealth need.

A number of commenters asked thatthe implementation strategy be required toaddress only significant or priority healthneeds identified through the CHNA. Othercommenters asked if the implementationstrategy could address health needs iden-tified from a source other than the hospitalfacility’s CHNA.

As indicated in section 3.a.ii of this pre-amble, these proposed regulations limit thehealth needs that a hospital facility mustidentify through its CHNA to significanthealth needs and the health needs cov-ered in the implementation strategy arelimited to those significant health needsidentified through the CHNA. In addition,these proposed regulations do not requirea hospital facility to develop a strategyor plan to address each identified signifi-cant health need. Rather, consistent withsection 6033(b)(15)(A) of the Code, theseproposed regulations follow the approachset forth in Notice 2011–52 and clarify thata hospital facility’s implementation strat-egy must, with respect to each significanthealth need identified through the CHNA,either: (1) describe how the hospital facil-ity plans to address the health need; or (2)identify the health need as one the hospi-tal facility does not intend to address andexplain why the hospital facility does notintend to address the health need. Accord-ingly, an implementation strategy may de-scribe how the hospital facility plans to ad-dress only a few of the significant healthneeds identified through a CHNA, as longas it explains why it does not intend to ad-dress the other identified significant healthneeds for which no plan is provided.

Although an implementation strategymust address the significant health needsidentified through a hospital facility’sCHNA, these proposed regulations do notlimit an implementation strategy to ad-dressing only those health needs, and itmay describe activities to address healthneeds that the hospital facility identifies inother ways.

i. Describing How a Hospital FacilityPlans to Address a Significant HealthNeed

Commenters recommended that the im-plementation strategy be required to de-scribe its intended impact on health out-comes. Some of these commenters recom-mended that the descriptions of intendedimpacts include short- and long-term mea-surable goals and objectives, as well asmethods to evaluate the plan’s effective-ness. One commenter stated that an imple-mentation strategy should assign an eco-nomic value to each strategy or activity,and an aggregate total benefit. Others rec-ommended requiring the implementationstrategy to include a mechanism to receiveongoing community feedback.

In describing how a hospital facilityplans to address a significant health needidentified through the CHNA, these pro-posed regulations adopt some of the com-menters’ recommendations by requiringthe implementation strategy to describe,in addition to the actions the hospital fa-cility intends to take to address the healthneed, the anticipated impact of these ac-tions and the plan to evaluate such impact.For example, a hospital facility’s CHNAmay identify as significant health needsfinancial or other barriers to care in thecommunity, such as high rates of financialneed or large numbers of uninsured indi-viduals and families. Its implementationstrategy could describe a program to de-crease the impact of these barriers, suchas by expanding its financial assistanceprogram or helping uninsured individu-als and families learn about and enroll insources of insurance such as Medicare,Medicaid, Children’s Health InsuranceProgram (CHIP), and the new Health In-surance Marketplaces (also known as theExchanges); state how it anticipates itsprogram will reduce these barriers to care;and identify the data sources it will use totrack the program’s impact on the barriers.

These proposed regulations also requirethe implementation strategy to identify theprograms and resources the hospital facil-ity plans to commit to address the healthneed. Finally, the implementation strat-egy must describe any planned collabora-tion between the hospital facility and otherfacilities or organizations in addressing thehealth need.

While these proposed regulations donot require the implementation strategyitself to include any particular mechanismfor community input, they do provide thata hospital facility must establish an ongo-ing feedback mechanism by requiring ahospital facility, in conducting a CHNA,to take into account written commentsreceived on its most recently adoptedimplementation strategy, as described insection 3.a.iii.C of this preamble.

ii. Describing Why a Hospital Facility IsNot Addressing a Significant Health Need

Several commenters sought clarifica-tion regarding the level of detail requiredin the implementation strategy’s explana-tion of why the hospital facility does notintend to address a significant health need.Some of these commenters stated that anexplanation of the prioritization strategytogether with comments noting that an-other facility or organization is addressingthe health need should be sufficient.

These proposed regulations clarify thata brief explanation of why a hospital facil-ity does not intend to address the signifi-cant health need is sufficient. Some pos-sible examples of reasons a hospital facil-ity might offer for not addressing a healthneed, include, but are not limited to, re-source constraints, relative lack of exper-tise or competency to effectively addressthe need, a relatively low priority assignedto the need, a lack of identified effectiveinterventions to address the need, and/orthe fact that the need is being addressed byother facilities or organizations in the com-munity. This list of possible reasons is notintended to be exhaustive, and a hospitalfacility may provide whatever reasons re-flect its particular facts and circumstances.

iii. Joint Implementation Strategies

Notice 2011–52 noted that the Trea-sury Department and the IRS intendedto allow hospital facilities to collaboratewith other facilities and organizations in

2013–21 I.R.B. 1123 May 20, 2013

developing an implementation strategybut to still require each hospital facility toseparately document its implementationstrategy. Some commenters requestedthat hospital facilities conducting a jointCHNA should be permitted to adopt ajoint implementation strategy while othercommenters recommended retaining therequirement for separate implementationstrategies, with each side advancing argu-ments similar to those advanced for andagainst joint CHNA reports.

In balancing these concerns, these pro-posed regulations state that a hospital facil-ity may develop an implementation strat-egy in collaboration with other facilitiesand organizations. In addition, these pro-posed regulations provide that a hospitalfacility that collaborates with other facil-ities or organizations in developing its im-plementation strategy generally must doc-ument its implementation strategy in a sep-arate written plan that is tailored to the hos-pital facility and takes into account its spe-cific programs and resources.

However, these proposed regulationsalso provide an exception to the generalrequirement of separate implementationstrategies: namely, a hospital facility col-laborating with other hospital facilitiesmay adopt a joint implementation strategyas long as it documents its CHNA in a jointCHNA report (as described in section 3.a.vof this preamble) and the joint implemen-tation strategy meets three requirements.First, the joint implementation strategymust be clearly identified as applying tothe hospital facility. Second, the joint im-plementation strategy must clearly identifythe hospital facility’s particular role andresponsibilities in taking the actions de-scribed in the implementation strategy andthe programs and resources the hospitalfacility plans to commit in taking thoseactions. Third, the joint implementationstrategy must include a summary or othertool that helps the reader easily locatethose portions of the joint implementationstrategy that relate to the hospital facility.

iv. When the Implementation StrategyMust Be Adopted

In order to satisfy the CHNA require-ments with respect to any taxable year,section 501(r)(3)(A)(ii) requires a hospitalfacility to adopt an implementation strat-egy to meet the health needs identified

through the CHNA described in section501(r)(3)(A)(i). Consistent with this statu-tory language, Notice 2011–52 statedthe intention of the Treasury Departmentand the IRS to require a hospital facilityto adopt an implementation strategy tomeet the health needs identified througha CHNA by the end of the same taxableyear in which it conducts that CHNA. Anumber of commenters sought additionaltime to complete the implementation strat-egy, in part to accommodate collaboratinghospital facilities with different taxableyears. Most of these commenters recom-mended that the implementation strategyshould be adopted within 12 months aftercompletion of the CHNA or by the end ofthe next taxable year, rather than by theend of the same taxable year in which theCHNA is completed.

Because a hospital facility only has toconduct a CHNA once every three yearsand may begin the CHNA process at anytime during the three-year period, a hospi-tal facility should have ample time to com-plete the CHNA earlier in the third taxableyear and adopt an implementation strat-egy by the end of that same taxable year.The flexibility afforded by a three-yearcycle should also allow hospital facilitieswith different tax years sufficient time tocollaborate. Thus, consistent with Notice2011–52, these proposed regulations pro-vide that an authorized body of the hos-pital facility must adopt the implementa-tion strategy by the end of the same tax-able year in which the hospital facility fin-ishes conducting the CHNA (typically, bymaking the CHNA report widely availableto the public). These proposed regulationsalso clarify that if a hospital facility be-gins working on a CHNA in one taxableyear but completes the final required stepfor the CHNA (and hence is considered tohave conducted it) in the subsequent tax-able year, it is not required to adopt theimplementation strategy until the taxableyear in which the CHNA process is con-sidered conducted, not the year it began.The Treasury Department and the IRS seekcomments on whether this rule will materi-ally inhibit the ability of hospital facilitieswith different taxable years to collaboratewith each other or otherwise burden hospi-tal facilities unnecessarily.

Notwithstanding the general rule thatthe implementation strategy must beadopted in the same taxable year the

CHNA is considered conducted, theseproposed regulations provide transitionrelief for the adoption of a hospital facil-ity’s implementation strategy for its firstCHNA conducted after the effective dateof section 501(r)(3), in recognition of thefact that certain hospital facilities may nothave a full three years in which to conducttheir first CHNA. This transition relief isdescribed in section 3.d of this preamble.

c. New hospital facilities

Notice 2011–52 requested commentsregarding when a hospital facility that isnewly acquired or placed into service mustconduct a CHNA. Comments receivedon this issue ranged from requiring sucha hospital facility to conduct a CHNAwithin the first taxable year of acquisitionor licensing to allowing the facility threetaxable years following the date of acqui-sition or licensing. In addition, at leasttwo commenters asked for clarification onwhen a for-profit hospital that convertsto section 501(c)(3) status must conducta CHNA. Additional commenters askedif a short taxable year resulting from, forexample, a change in ownership, is con-sidered a “taxable year” for purposes ofthe three-year CHNA cycle.

These proposed regulations providethat a hospital facility that is newly ac-quired or placed into service by a hospitalorganization, or that becomes newly sub-ject to section 501(r) because the hospitalorganization that operates it is newly rec-ognized as described in section 501(c)(3),must conduct a CHNA and adopt an imple-mentation strategy to meet the communityhealth needs identified through that CHNAby the last day of the second taxable yearbeginning after the date, respectively, thehospital facility is acquired or placed intoservice, or newly subject to section 501(r).

A short taxable year of less than twelvemonths is considered a taxable year forpurposes of section 501(r). Thus, the tax-able year in which a hospital facility is ac-quired or placed into service, or becomessubject to section 501(r), is a taxable yearfor purposes of the CHNA requirements,regardless of whether that taxable year isless than twelve months. As a result, adeadline of the last day of the second tax-able year beginning after the date of ac-quisition, licensure, or section 501(c)(3)recognition provides these new hospital fa-

May 20, 2013 1124 2013–21 I.R.B.

cilities with three taxable years (even ifless than three full calendar years) to meetthe section 501(r)(3) requirements.

d. Transition rules

A number of commenters requestedvarious forms of transition relief, notingthe complexity of the new CHNA require-ments. In particular, a few commentersasked if a CHNA conducted before theeffective date of the CHNA requirementscould satisfy the CHNA requirements fora taxable year beginning after the effectivedate (that is, for a taxable year beginningafter March 23, 2012). In addition, sev-eral commenters specifically requestedtransition relief with respect to the firstimplementation strategy adopted after theeffective date of the CHNA requirements.The suggestions for transition relief forthe adoption of the first implementationstrategy ranged from 30 to 60 days afterthe end of the taxable year in which theCHNA was conducted to the end of thetaxable year following the taxable year inwhich the CHNA was conducted. In re-sponse to these comments, these proposedregulations provide transition relief that istailored to the taxable year after March 23,2010, in which a hospital facility conductsits first CHNA.

i. CHNA Conducted in Taxable YearBeginning Before March 23, 2012

These proposed regulations providethat a hospital facility that conducted aCHNA described in section 501(r)(3) ineither of its first two taxable years be-ginning after March 23, 2010, does notneed to meet the requirements of section501(r)(3) again until the third taxable yearfollowing the taxable year in which thehospital facility conducted the CHNA. Toqualify for this transition relief, the hospi-tal facility must adopt an implementationstrategy to meet the community healthneeds identified through the CHNA con-ducted in its first taxable year beginningafter March 23, 2010 or 2011 on or beforethe 15th day of the fifth calendar monthfollowing the close of its first taxable yearbeginning after March 23, 2012. Thus, forexample, if a hospital facility reporting ona calendar-year basis conducts a CHNA in2012 and adopts an implementation strat-egy for that CHNA on or before May 15,

2014, it does not need to meet the section501(r)(3) requirements again until 2015.

ii. CHNA Conducted in First TaxableYear Beginning after March 23, 2012

If a hospital facility conducts a CHNAdescribed in section 501(r)(3) in its firsttaxable year beginning after March 23,2012, these proposed regulations providethat the hospital facility will be deemedto satisfy the requirement to adopt animplementation strategy in the same tax-able year the CHNA is conducted if anauthorized body of the hospital facilityadopts an implementation strategy to meetthe community health needs identifiedthrough that CHNA on or before the 15thday of the fifth calendar month followingthe close of its first taxable year beginningafter March 23, 2012.

4. Reporting Requirements Related toCHNAs

Notice 2011–52 stated the intention ofthe Treasury Department and the IRS torequire a hospital organization to attachto its annual information return (Form990) the most recently adopted implemen-tation strategy for each of the hospitalfacilities it operates. A few commentersstated that, rather than require the entireimplementation strategy to be attached tothe Form 990, the Treasury Departmentand the IRS should permit a narrativesummary description of the contents of itsimplementation strategy to be provided onthe Form 990. One of these commentersnoted that the implementation strategy isonly required to be updated every threeyears, so in many instances a narrativemay provide more relevant and timely in-formation. A number of other commentersrecommended requiring the implementa-tion strategy to be made widely availableto the public, rather than merely attachedto the Form 990, in order to encouragegreater transparency and provide an op-portunity for public input and comment.

These proposed regulations allow ahospital organization either to attach toits Form 990 a copy of the most recentlyadopted implementation strategy for eachhospital facility it operates or to provideon the Form 990 the URL(s) of the webpage(s) on which it has made each im-plementation strategy widely available ona Web site. An implementation strategy

must describe, with respect to each sig-nificant health need identified through theCHNA, how the hospital facility plansto address the health need or why thehospital facility does not intend to ad-dress the health need. Similarly, section6033(b)(15)(A) requires a hospital organ-ization to furnish annually informationsetting forth a “description of how theorganization is addressing the needs iden-tified in each” CHNA and “a descriptionof any such needs that are not being ad-dressed together with the reasons whysuch needs are not being addressed.” Thus,the requirement in these proposed regula-tions to attach the implementation strategyto the Form 990, or provide on the Form990 the URL where the implementationstrategy is made widely available on aWeb site, partially implements section6033(b)(15)(A).

However, the requirement in section6033(b)(15)(A) also encompasses an an-nual, up-to-date description of the actionsactually taken by a hospital facility duringthe taxable year to address the significanthealth needs identified through the mostrecently conducted CHNA (which, pre-sumably, will typically be steps taken dur-ing a taxable year to execute the hospitalfacility’s most recently adopted imple-mentation strategy). Accordingly, theseproposed regulations require a hospitalorganization to provide annually on theForm 990 a description of the actions takenduring the taxable year to address the sig-nificant health needs identified throughits most recent CHNA for each hospitalfacility it operates or, if no actions weretaken with respect to one or more of thesehealth needs, the reason or reasons whyno actions were taken.

These proposed regulations alsoreiterate the requirement of section6033(b)(15)(B) that a hospital organiza-tion attach to its Form 990 a copy of itsaudited financial statements for the taxableyear — or in the case of an organization thefinancial statements of which are includedin consolidated financial statements withother organizations, such consolidatedfinancial statements. The Treasury De-partment and the IRS request commentsregarding whether hospital organizationswhose financial statements are included inconsolidated financial statements shouldbe able to redact financial information

2013–21 I.R.B. 1125 May 20, 2013

about any taxable organizations that aremembers of the consolidated group.

Finally, consistent with section6033(b)(10), these proposed regulationsrequire a hospital organization to disclosethe amount of the excise tax imposed onthe organization under section 4959 dur-ing the taxable year for failures to meetthe requirements of section 501(r)(3).

A few commenters requested clarifica-tion regarding whether government hospi-tals will continue to be excepted from theseand other Form 990 reporting require-ments under Rev. Proc. 95–48, 1995–2C.B. 418. In Rev. Proc. 95–48, the IRSexercised its discretionary authority undersection 6033(a)(3)(B) to relieve certaingovernmental units and affiliates of gov-ernmental units from the requirement tofile a Form 990. The Affordable Care Actdid not change the requirements regardingwhich organizations are required to filea Form 990. Accordingly, a governmenthospital (other than one that is describedin section 509(a)(3)) that has been excusedfrom filing a Form 990 under Rev. Proc.95–48 or a successor revenue procedure isnot required to file a Form 990. Becausegovernment hospitals described in Rev.Proc. 95–48 (other than those describedin section 509(a)(3)) are relieved fromthe annual filing requirements under sec-tion 6033, they are also relieved from anynew reporting requirements imposed onhospital organizations by these proposedregulations under section 6033, includingunder sections 6033(b)(10)(D) and (b)(15)and the proposed requirement to attachone or more implementation strategies toa Form 990.

5. Excise Tax on Failure to Meet CHNARequirements

Section 4959 imposes a $50,000 excisetax on a hospital organization that fails tomeet the CHNA requirements of section501(r)(3) with respect to any taxable year.

Notice 2011–52 indicated the intent ofthe Treasury Department and the IRS toimpose the $50,000 tax with respect toa failure by a hospital facility to satisfysection 501(r)(3) in any three-year period,making it possible for the excise tax to ap-ply in sequential years. Notice 2011–52provided an example of a hospital organ-ization that reports on a calendar-year ba-sis and operates only one hospital facility,

which is subject to the $50,000 excise taxin 2013 because the hospital facility failedto conduct a CHNA in 2011, 2012, and2013. If the hospital facility again fails toconduct a CHNA by the last day of 2014,Notice 2011–52 noted the hospital organi-zation will again be subject to the $50,000excise tax in 2014 for the hospital facil-ity’s failure to conduct a CHNA in 2012,2013, and 2014. These proposed regula-tions include this example of the applica-tion of the section 4959 excise tax and con-firm that the excise tax may be imposedfor each taxable year that a hospital facilityfails to meet the section 501(r)(3) require-ments. These proposed regulations alsomake clear that the excise tax may be im-posed in addition to any tax imposed on anoncompliant hospital facility as describedin section 2.d of this preamble or that re-sults from revocation of a hospital organi-zation’s section 501(c)(3) status.

In addition, Notice 2011–52 stated theintention of the Treasury Department andthe IRS to apply the section 4959 excisetax separately with respect to each hos-pital facility’s failure to meet the CHNArequirements. Thus, if a hospital organ-ization that operates two hospital facili-ties fails to meet the requirements of sec-tion 501(r)(3) with respect to both facilitiesin any taxable year, the hospital organiza-tion will be subject to a total excise tax of$100,000 ($50,000 for each hospital facil-ity) for that taxable year.

At least one commenter argued thatapplying the $50,000 excise tax on a fa-cility-by-facility basis is inconsistent withthe statutory language in section 4959 that“there is imposed on the organization a taxequal to $50,000.” On the other hand, twocommenters explicitly supported applyingthe section 4959 excise tax at the hospitalfacility level. One of these commentersexpressed concern that if the $50,000excise tax were imposed on a hospitalorganization without regard to the numberof hospital facilities it operates that havefailed the section 501(r)(3) requirements,a hospital organization operating multiplefacilities may choose to pay the tax ratherthan conduct a CHNA and adopt an im-plementation strategy for every facility itoperates.

The Treasury Department and the IRSnote that section 501(r)(2)(B)(i) requiresa hospital organization operating morethan one hospital facility to meet the

CHNA requirements “separately with re-spect to each such facility” and section501(r)(2)(B)(ii) suggests that one hospitalorganization can fail to meet the CHNArequirements separately with respect toeach hospital facility. Thus, a hospitalorganization with multiple hospital facil-ities can “fail[] to meet the requirementsof section 501(r)(3)” within the meaningof section 4959 separately with respect toeach hospital facility. Accordingly, theseproposed regulations adopt the approachin Notice 2011–52 of applying the excisetax on a facility-by-facility basis.

One commenter requested clarificationthat the excise tax will be imposed on anyhospital organization that fails to satisfyany requirement under section 501(r)(3),including the requirement to adopt animplementation strategy, and is not lim-ited to a failure related to conductingthe CHNA. These proposed regulations,in adopting the approach taken in No-tice 2011–52, clarify that the excise taxis imposed on a failure to meet any ofthe requirements under section 501(r)(3),including the requirement to adopt an im-plementation strategy described in section501(r)(3)(A)(ii).

Effective/Applicability Dates

The 2012 proposed regulations undersection 501(r)(4) through (r)(6) were pro-posed to apply for taxable years begin-ning on or after the date those rules arepublished in the Federal Register as fi-nal or temporary regulations. By con-trast, these proposed regulations providethat both these proposed regulations andthe 2012 proposed regulations will gener-ally be effective on the date these rules arepublished in the Federal Register as finalor temporary regulations. Providing foran immediate effective date gives immedi-ate effect to the transition relief describedin §1.501(r)–3(e) and will also allow theTreasury Department and the IRS to con-sider transition relief for the requirementsunder §1.501(r)–4 through §1.501(r)–6 ofthe 2012 proposed regulations based onthe estimated amount of time to come intocompliance with those rules rather than aparticular hospital organization’s taxableyear. The proposed regulations under sec-tions 6033(b)(10) and (b)(15)(A) are pro-posed to be effective for returns filed on orafter the date these rules are published in

May 20, 2013 1126 2013–21 I.R.B.

the Federal Register as final or temporaryregulations.

A hospital facility may rely on§1.501(r)–3 of these proposed regulationsfor any CHNA conducted or implemen-tation strategy adopted on or before thedate that is six months after the date theseproposed regulations are published as finalor temporary regulations in the FederalRegister. As provided in Notice 2011–52,hospital organizations may continue torely on the interim rules described in No-tice 2011–52 for any CHNA conductedor implementation strategy adopted on orbefore October 5, 2013, which is the datethat is six months after these proposedregulations are published. After October5, 2013, Notice 2011–52 is obsolete. TheTreasury Department and the IRS invitecomments on whether, and what type of,additional transitional relief may be nec-essary.

Hospital organizations should notethat the statutory effective date of section501(r)(3) is a hospital organization’s firsttaxable year beginning after March 23,2012. The effective date for the otherrequirements under section 501(r) is ahospital organization’s first taxable yearbeginning after March 23, 2010.

Availability of IRS Documents

IRS notices, revenue rulings, and rev-enue procedures cited in this preamble aremade available by the Superintendent ofDocuments, U.S. Government Printing Of-fice, Washington, DC 20402.

Special Analyses

It has been determined that this noticeof proposed rulemaking is not a significantregulatory action as defined in ExecutiveOrder 12866, as supplemented by Execu-tive Order 13563. Therefore, a regulatoryassessment is not required. It also has beendetermined that section 553(b) of the Ad-ministrative Procedure Act (5 U.S.C. chap-ter 5) does not apply to this proposed reg-ulation. It is hereby certified that the col-lection of information in these regulationswill not have a significant economic im-pact on a substantial number of small en-tities. The collection of information is in§1.501(r)–3 and §1.6033–2(a)(2)(ii)(l) of

the regulations. This certification is basedon the following:

Consistent with the requirements im-posed by statute, §1.501(r)–3 of the regu-lations requires hospital facilities to con-duct a CHNA and adopt an implemen-tation strategy. However, these require-ments need only be satisfied once overa period of three taxable years. More-over, some hospital facilities already con-duct similar community needs assessmentsunder state law, and the Treasury Depart-ment and the IRS expect that these facili-ties will be able to draw upon pre-existingprocesses and resources to some extent.

Consistent with the requirements im-posed by statute, §1.6033–2(a)(2)(ii)(l) ofthe regulations requires affected organiza-tions to report annually on a Form 990 ac-tions taken during the year to address com-munity health needs and to attach auditedfinancial statements to the Form 990. Toassist the IRS and the public, the regula-tions also require affected organizations toattach to the Form 990 a copy of the mostrecently adopted implementation strategyor provide the URL of a web page whereit is available to the public. For affectedorganizations, the burden of providing ei-ther a copy of the implementation strategyor the address of a Web site where it canbe found will be minimal. Consequently,the regulations do not add to the impacton small entities imposed by the statutoryscheme.

For these reasons, the collection of in-formation in this regulation that is sub-ject to the Regulatory Flexibility Act willnot impose a significant economic bur-den upon the affected organizations. Ac-cordingly, a Regulatory Flexibility Analy-sis under the Regulatory Flexibility Act (5U.S.C. chapter 6) is not required. Pursuantto section 7805(f) of the Code, this regula-tion has been submitted to the Chief Coun-sel for Advocacy of the Small BusinessAdministration for comment on its impacton small entities.

Comments and Requests for PublicHearing

Before these proposed regulations areadopted as final regulations, considerationwill be given to any comments that aresubmitted timely to the IRS as prescribedin this preamble under “Addresses.” The

Treasury Department and the IRS requestcomments on all aspects of the proposedrules. All comments will be available atwww.regulations.gov or upon request.

A public hearing will be scheduled ifrequested in writing by any person thattimely submits written comments. If apublic hearing is scheduled, notice of thedate, time, and place for the public hearingwill be published in the Federal Register.

Drafting Information

The principal authors of these proposedregulations are Preston J. Quesenberryand Amy F. Giuliano, Office of the ChiefCounsel (Tax-Exempt and GovernmentEntities). However, other personnel fromthe Treasury Department and the IRSparticipated in their development.

* * * * *

Proposed Amendments to theRegulations

Accordingly, 26 CFR parts 1 and 53 areproposed to be amended as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citation forpart 1 continues to read in part as follows:

Authority: 26 U.S.C. 7805 * * *Par. 2. Section 1.501(r)–0 as proposed

to be amended at 77 FR 38160 (June 26,2012) is proposed to be further amendedas follows:

1. Adding a new entry to §1.501(r)–1,paragraph (c).

2. Adding new entries to §1.501(r)–2and §1.501(r)–3.

3. Revising the entry to §1.501(r)–7.The revision and additions to read as

follows:

§1.501(r)–0 Outline of regulations.

* * * * *

§1.501(r)–1 Definitions.

* * * * *(c) Additional definitions.(1) Authorized body of a hospital facil-

ity.(2) Operating a hospital facility.(3) Partnership agreement.(4) Widely available on a Web site.

2013–21 I.R.B. 1127 May 20, 2013

§1.501(r)–2 Failures to satisfy section501(r).

(a) Revocation of section 501(c)(3) sta-tus.

(b) Minor and inadvertent omissionsand errors.

(c) Excusing certain failures if hospitalfacility corrects and discloses.

(d) Taxation of noncompliant hospitalfacilities.

(1) In general.(2) Noncompliant facility income.(3) No aggregation.(4) Interaction with other Code provi-

sions.

§1.501(r)–3 Community health needsassessments.

(a) In general.(b) Conducting a CHNA.(1) In general.(2) Date a CHNA is conducted.(3) Community served by the hospital

facility.(4) Assessing community health needs.(5) Persons representing the broad in-

terests of the community.(6) Medically underserved populations.(7) Documentation of a CHNA.(8) Making the CHNA report widely

available to the public.(c) Implementation strategy.(1) In general.(2) Description of how the hospital fa-

cility plans to address a significant healthneed.

(3) Description of why a hospital facil-ity is not addressing a significant healthneed.

(4) Joint implementation strategies.(5) When the implementation strategy

must be adopted.(d) New hospital facilities.(e) Transition rules.(1) CHNA conducted in taxable year

beginning before March 23, 2012.(2) CHNA conducted in first taxable

year beginning after March 23, 2012.

* * * * *

§1.501(r)–7 Effective/applicability dates.

(a) Effective/applicability date.(b) Reliance and transition period.Par. 3. Section 1.501(r)–1 as proposed

to be amended at 77 FR 38160 (June 26,

2012) is proposed to be further amendedby revising paragraphs (b)(15) and (b)(16)and adding new paragraph (c) to read asfollows:

§1.501(r)–1 Definitions.

* * * * *(b) * * *(15) Hospital facility means a facility

that is required by a state to be licensed,registered, or similarly recognized as ahospital. Multiple buildings operated un-der a single state license are considered tobe a single hospital facility. For purposesof this paragraph (b)(15), the term “state”includes only the 50 states and the Districtof Columbia and not any U.S. territory orforeign country. References to a hospitalfacility taking actions include instances inwhich the hospital organization operatingthe hospital facility takes actions throughor on behalf of the hospital facility.

(16) Hospital organization means anorganization recognized (or seeking tobe recognized) as described in section501(c)(3) that operates one or more hospi-tal facilities. If the section 501(c)(3) statusof such an organization is revoked, theorganization will, for purposes of section4959, continue to be treated as a hospitalorganization during the taxable year inwhich such revocation becomes effective.

* * * * *(c) Additional definitions—(1) Autho-

rized body of a hospital facility means—(i) The governing body (that is, the

board of directors, board of trustees, orequivalent controlling body) of the hospi-tal organization that operates the hospitalfacility, or a committee of, or other partyauthorized by, that governing body to theextent such committee or other party ispermitted under state law to act on behalfof the governing body; or

(ii) If the hospital facility has its owngoverning body and is recognized as an en-tity under state law but is a disregarded en-tity for federal tax purposes, the governingbody of that hospital facility, or a commit-tee of, or other party authorized by, thatgoverning body to the extent such commit-tee or other party is permitted under statelaw to act on behalf of the governing body.

(2) Operating a hospital facility in-cludes operating the facility through theorganization’s own employees or contract-ing out to another organization to operate

the facility. For example, if an organi-zation hires a management company tooperate the facility, the hiring organizationis considered to operate the facility. An or-ganization also operates a hospital facilityif it is the sole member or owner of a dis-regarded entity that operates the hospitalfacility. In addition, an organization oper-ates a hospital facility if it owns a capitalor profits interest in, or is a member of,a joint venture, limited liability company,or other entity treated as a partnership forfederal income tax purposes that operatesthe hospital facility unless either—

(i) The organization does not have con-trol over the operation of the hospital fa-cility sufficient to ensure that the operationof the hospital facility furthers an exemptpurpose described in section 501(c)(3) andthus treats the operation of the hospital fa-cility, including the facility’s provision ofmedical care, as an unrelated trade or busi-ness described in section 513(a) with re-spect to the hospital organization; or

(ii) At all times since March 23, 2010,the organization has been organized andoperated primarily for educational or sci-entific purposes and has not engaged pri-marily in the operation of one or more hos-pital facilities and, pursuant to a partner-ship agreement entered into prior to March23, 2010,—

(A) Does not own more than 35 per-cent of the capital or profits interest inthe partnership (determined in accordancewith section 707(b)(3));

(B) Does not own a general partner in-terest, managing-member interest, or sim-ilar interest in the partnership; and

(C) Does not have control over the op-eration of the hospital facility sufficient toensure that the hospital facility complieswith the requirements of section 501(r).

(3) Partnership agreement, for pur-poses of paragraph (c)(2)(ii) of this sec-tion, includes all written agreementsamong the partners, or between one ormore partners and the partnership, con-cerning affairs of the partnership andresponsibilities of the partners, whether ornot embodied in a document referred to bythe partners as the partnership agreement,entered into before March 23, 2010. Apartnership agreement also includes anymodifications to the agreement agreed toby all partners, or adopted in any othermanner provided by the partnership agree-ment, but no such modifications adopted

May 20, 2013 1128 2013–21 I.R.B.

on or after March 23, 2010, that affectwhether or not the agreement is describedin paragraph (c)(2)(ii) of this section. Inaddition, a partnership agreement includesprovisions of federal, state, or local law,as in effect before March 23, 2010, thatgovern the affairs of the partnership or areconsidered under such law to be part ofthe partnership agreement.

(4) Widely available on a Web sitemeans—

(i) The hospital facility conspicuouslyposts a complete and current version of thedocument on—

(A) The hospital facility’s Web site;(B) If the hospital facility does not have

its own Web site separate from the hospitalorganization that operates it, the hospitalorganization’s Web site; or

(C) A Web site established and main-tained by another entity, but only if theWeb site of the hospital facility or hospi-tal organization (if the facility or organi-zation has a Web site) provides a conspic-uously-displayed link to the web page onwhich the document is posted, along withclear instructions for accessing the docu-ment on that Web site;

(ii) Individuals with access to the Inter-net can access, download, view, and print ahard copy of the document without requir-ing special computer hardware or software(other than software that is readily avail-able to members of the public without pay-ment of any fee); without payment of a feeto the hospital facility, hospital organiza-tion, or other entity maintaining the Website; and without creating an account or be-ing otherwise required to provide person-ally identifiable information; and

(iii) The hospital facility provides indi-viduals who ask how to access a copy ofthe document online with the direct Website address, or URL, of the web page onwhich the document is posted.

Par. 4. Sections 1.501(r)–2 and1.501(r)–3 are added to read as follows:

§1.501(r)–2 Failures to satisfy section501(r).

(a) Revocation of section 501(c)(3) sta-tus. Except as otherwise provided in para-graphs (b) and (c) of this section, a hospi-tal organization failing to meet one or moreof the requirements of section 501(r) sepa-rately with respect to one or more hospitalfacilities it operates may have its section

501(c)(3) status revoked as of the first dayof the taxable year in which the failure oc-curs. In determining whether to continueto recognize the section 501(c)(3) status ofa hospital organization that fails to meetone or more of the requirements of section501(r) with respect to one or more hospi-tal facilities, the Commissioner will con-sider all relevant facts and circumstancesincluding, but not limited to, the follow-ing—

(1) Whether the organization has pre-viously failed to meet the requirements ofsection 501(r), and, if so, whether the sametype of failure previously occurred;

(2) The size, scope, nature, and signifi-cance of the organization’s failure(s);

(3) In the case of an organization thatoperates more than one hospital facility,the number, size, and significance of thefacilities that have failed to meet the sec-tion 501(r) requirements relative to thosethat have complied with these require-ments;

(4) The reason for the failure(s);(5) Whether the organization had, prior

to the failure(s), established practices andprocedures (formal or informal) reason-ably designed to promote and facilitateoverall compliance with the section 501(r)requirements;

(6) Whether the practices and proce-dures had been routinely followed and thefailure(s) occurred through an oversight ormistake in applying them;

(7) Whether the organization has imple-mented safeguards that are reasonably cal-culated to prevent similar failures from oc-curring in the future;

(8) Whether the organization correctedthe failure(s) as promptly after discoveryas is reasonable given the nature of thefailure(s); and

(9) Whether the organization took themeasures described in paragraphs (a)(7)and (a)(8) of this section before the Com-missioner discovered the failure(s).

(b) Minor and inadvertent omissionsand errors. A hospital facility’s omis-sion of required information from a policyor report described in §1.501(r)–3 or§1.501(r)–4, or error with respect to theimplementation or operational require-ments described in §1.501(r)–3 through§1.501(r)–6, will not be considered a fail-ure to meet a requirement of section 501(r)if—

(1) Such omission or error was minor,inadvertent, and due to reasonable cause;and

(2) The hospital facility corrects suchomission or error as promptly after discov-ery as is reasonable given the nature of theomission or error.

(c) Excusing certain failures if hospitalfacility corrects and discloses. Pursuantto guidance set forth by revenue proce-dure, notice, or other guidance publishedin the Internal Revenue Bulletin, a hospi-tal facility’s failure to meet one or more ofthe requirements described in §1.501(r)–3through §1.501(r)–6 that is neither will-ful nor egregious shall be excused for pur-poses of this section if the hospital facil-ity corrects and makes disclosure in accor-dance with the rules set forth in the guid-ance. If a hospital facility’s failure waswillful or egregious, the failure will not beexcused, even if the hospital facility cor-rects and makes disclosure in accordancewith the guidance, and no presumption willbe created by a hospital facility’s correc-tion and disclosure that the failure was nei-ther willful nor egregious. For purposesof this paragraph (c), willful is to be inter-preted consistent with the meaning of thatterm in the context of civil penalties, whichwould include a failure due to gross neg-ligence, reckless disregard, or willful ne-glect. Furthermore, notwithstanding a hos-pital facility’s compliance with such futureguidance, a hospital facility may, in thediscretion of the IRS, be subject to an ex-cise tax under section 4959 for failures tomeet the requirements of section 501(r)(3).

(d) Taxation of noncompliant hospitalfacilities—(1) In general. Except as oth-erwise provided in paragraphs (b) and (c)of this section, if a hospital organizationthat operates more than one hospital facil-ity fails to meet one or more of the require-ments of section 501(r) separately with re-spect to a hospital facility during a taxableyear, the income derived from the non-compliant hospital facility (“noncompliantfacility income”) during that taxable yearwill be subject to tax computed as providedin section 11 (or as provided in section 1(e)if the hospital organization is a trust de-scribed in section 511(b)(2)), but substi-tuting “noncompliant facility income” for“taxable income,” if—

(i) The hospital organization continuesto be recognized as described in section501(c)(3) during the taxable year, but

2013–21 I.R.B. 1129 May 20, 2013

(ii) The hospital organization would notcontinue to be recognized as described insection 501(c)(3) during the taxable yearbased on the facts and circumstances de-scribed in paragraph (a) of this section (butdisregarding paragraph (a)(3)) if the non-compliant hospital facility were the onlyhospital facility operated by the organiza-tion.

(2) Noncompliant facility income—(i)In general. For purposes of this paragraph(d), the noncompliant facility income de-rived from a hospital facility during a tax-able year will be the gross income derivedfrom that hospital facility during the tax-able year, less the deductions allowed bychapter 1 of the Internal Revenue Code(Code) that are directly connected to theoperation of that hospital facility duringthe taxable year, excluding any gross in-come and deductions taken into account incomputing any unrelated business taxableincome described in section 512 that is de-rived from the facility during the taxableyear.

(ii) Directly connected deductions. Forpurposes of this paragraph (d), to be di-rectly connected with the operation of ahospital facility that has failed to meet therequirements of section 501(r), an item ofdeduction must have proximate and pri-mary relationship to the operation of thehospital facility. Expenses, depreciation,and similar items attributable solely to theoperation of a hospital facility are proxi-mately and primarily related to such oper-ation, and therefore qualify for deductionto the extent that they meet the require-ments of section 162, section 167, or otherrelevant provisions of the Code. Whereexpenses, depreciation, and similar itemsare attributable to a noncompliant hospi-tal facility and other hospital facilities op-erated by the hospital organization (and/orto other activities of the hospital organiza-tion unrelated to the operation of hospitalfacilities), such items shall be allocated be-tween the hospital facilities (and/or otheractivities) on a reasonable basis. The por-tion of any such item so allocated to a non-compliant hospital facility is proximatelyand primarily related to the operation ofthat facility and shall be allowable as adeduction in computing the facility’s non-compliant facility income in the mannerand to the extent it would meet the require-ments of section 162, section 167, or otherrelevant provisions of the Code.

(3) No aggregation. In computing thenoncompliant facility income of a hospitalfacility, the gross income from (and the de-ductions allowed with respect to) the hos-pital facility may not be aggregated withthe gross income from (and the deductionsallowed with respect to) the hospital organ-ization’s other noncompliant hospital fa-cilities subject to tax under this paragraph(d) or its unrelated trade or business activ-ities described in section 513.

(4) Interaction with other Code pro-visions—(i) Hospital organization op-erating a noncompliant hospital facilitycontinues to be treated as tax-exempt. Ahospital organization operating a noncom-pliant hospital facility subject to tax underthis paragraph (d) shall continue to betreated as an organization that is exemptfrom tax under section 501(a) because it isdescribed in section 501(c)(3) for all pur-poses of the Code. Thus, for example, theapplication of this paragraph (d) shall not,by itself, affect the tax-exempt status ofbonds issued to finance the noncomplianthospital facility.

(ii) Noncompliant hospital facility op-erated by a tax-exempt hospital organi-zation is subject to tax. A noncompli-ant hospital facility described in paragraph(d)(1) of this section is subject to tax underthis paragraph (d), notwithstanding the factthat the hospital organization operating thehospital facility is otherwise exempt fromtax under section 501(a) and subject to taxunder section 511(a) and that §1.11–1(a) ofthis chapter states such organizations arenot liable to the tax imposed under section11.

(iii) Noncompliant hospital facility nota business entity. A noncompliant hospi-tal facility subject to tax under this para-graph (d) is not considered a business en-tity for purposes of §301.7701–2(b)(7) ofthis chapter.

§1.501(r)–3 Community health needsassessments.

(a) In general. With respect to any tax-able year, a hospital organization meets therequirements of section 501(r)(3) with re-spect to a hospital facility it operates onlyif—

(1) The hospital facility has conducteda community health needs assessment(CHNA) that meets the requirements ofparagraph (b) of this section in such tax-

able year or in either of the two taxableyears immediately preceding such taxableyear; and

(2) An authorized body of the hospitalfacility (as defined in §1.501(r)–1(c)(1))has adopted an implementation strategy tomeet the community health needs identi-fied through the CHNA, as described inparagraph (c) of this section, by the end ofthe taxable year in which the hospital fa-cility conducts the CHNA.

(b) Conducting a CHNA—(1) In gen-eral. To conduct a CHNA for purposes ofparagraph (a) of this section, a hospital fa-cility must complete all of the followingsteps—

(i) Define the community it serves;(ii) Assess the health needs of that com-

munity;(iii) In assessing the health needs of the

community, take into account input frompersons who represent the broad interestsof that community, including those withspecial knowledge of or expertise in publichealth;

(iv) Document the CHNA in a writtenreport (“CHNA report”) that is adopted forthe hospital facility by an authorized bodyof the hospital facility; and

(v) Make the CHNA report widelyavailable to the public.

(2) Date a CHNA is conducted. Forpurposes of this section, a hospital facil-ity will be considered to have conducteda CHNA on the date it has completed allof the steps described in paragraph (b)(1)of this section. Solely for purposes of de-termining the date on which a CHNA hasbeen conducted, a hospital facility will beconsidered to have made the CHNA reportwidely available to the public on the date itfirst makes the CHNA report widely avail-able to the public as described in paragraph(b)(8)(i) of this section.

(3) Community served by the hospi-tal facility. In defining the community itserves for purposes of paragraph (b)(1)(i)of this section, a hospital facility may takeinto account all of the relevant facts andcircumstances, including the geographicarea served by the hospital facility, targetpopulations served (for example, children,women, or the aged), and principal func-tions (for example, focus on a particularspecialty area or targeted disease). A hos-pital facility may define its communityto include populations in addition to itspatient populations and geographic areas

May 20, 2013 1130 2013–21 I.R.B.

outside of those in which its patient popu-lations reside. However, a hospital facilitymay not define its community to excludemedically underserved, low-income, orminority populations who are part of itspatient populations, live in geographic ar-eas in which its patient populations reside(unless they are not part of the hospital fa-cility’s target populations or affected by itsprincipal functions), or otherwise shouldbe included based on the method the hos-pital facility uses to define its community.In addition, if a hospital facility’s methodof defining its community takes into ac-count patient populations, the hospitalfacility must treat as patients all individ-uals who receive care from the hospitalfacility, without regard to whether (or howmuch) they or their insurers pay for thecare received or whether they are eligiblefor assistance under the hospital facility’sfinancial assistance policy.

(4) Assessing community health needs.To assess the health needs of the commu-nity it serves for purposes of paragraph(b)(1)(ii) of this section, a hospital facil-ity must identify significant health needsof the community, prioritize those healthneeds, and identify potential measuresand resources (such as programs, organi-zations, and facilities in the community)available to address the health needs.For these purposes, the health needs ofa community include requisites for theimprovement or maintenance of healthstatus in both the community at large andin particular parts of the community (suchas particular neighborhoods or popula-tions experiencing health disparities). Ahospital facility may determine whethera health need is significant based on allof the facts and circumstances present inthe community it serves. In addition, ahospital facility may use any criteria toprioritize the significant health needs itidentifies, including, but not limited to, theburden, scope, severity, or urgency of thehealth need; the estimated feasibility andeffectiveness of possible interventions; thehealth disparities associated with the need;or the importance the community placeson addressing the need.

(5) Persons representing the broad in-terests of the community. To take intoaccount input from persons who repre-sent the broad interests of the communityit serves (including those with specialknowledge of or expertise in public health)

for purposes of paragraph (b)(1)(iii) ofthis section, a hospital facility must takeinto account input from the sources listedin paragraphs (b)(5)(i), (b)(5)(ii), and(b)(5)(iii) of this section in assessing thehealth needs of its community. Input fromthese persons includes, but is not limitedto, input on any financial and other bar-riers to access to care in the community.In addition, a hospital facility may takeinto account input from a broad range ofpersons located in or serving its commu-nity, including, but not limited to, healthcare consumers and consumer advocates,nonprofit and community-based organiza-tions, academic experts, local governmentofficials, local school districts, health careproviders and community health centers,health insurance and managed care orga-nizations, private businesses, and laborand workforce representatives. A hospi-tal facility must take into account inputfrom the following sources in assessingthe health needs of its community—

(i) At least one state, local, tribal, or re-gional governmental public health depart-ment (or equivalent department or agency)with knowledge, information, or expertiserelevant to the health needs of that commu-nity;

(ii) Members of medically underserved,low-income, and minority populations inthe community served by the hospital fa-cility, or individuals or organizations serv-ing or representing the interests of suchpopulations; and

(iii) Written comments received on thehospital facility’s most recently conductedCHNA and most recently adopted imple-mentation strategy.

(6) Medically underserved populations.For purposes of this paragraph (b), med-ically underserved populations includepopulations experiencing health dispari-ties or at risk of not receiving adequatemedical care as a result of being uninsuredor underinsured or due to geographic, lan-guage, financial, or other barriers.

(7) Documentation of a CHNA—(i)In general. For purposes of paragraph(b)(1)(iv) of this section, the CHNA reportadopted for the hospital facility by an au-thorized body of the hospital facility mustinclude—

(A) A definition of the communityserved by the hospital facility and a de-scription of how the community wasdetermined;

(B) A description of the process andmethods used to conduct the CHNA;

(C) A description of how the hospitalfacility took into account input from per-sons who represent the broad interests ofthe community it serves;

(D) A prioritized description of the sig-nificant health needs of the communityidentified through the CHNA, along with adescription of the process and criteria usedin identifying certain health needs as sig-nificant and prioritizing such significanthealth needs; and

(E) A description of the potential mea-sures and resources identified through theCHNA to address the significant healthneeds.

(ii) Process and methods used to con-duct the CHNA. A hospital facility’sCHNA report will be considered to de-scribe the process and methods used toconduct the CHNA for purposes of para-graph (b)(7)(i)(B) of this section if theCHNA report describes the data and otherinformation used in the assessment, as wellas the methods of collecting and analyzingthis data and information, and identifiesany parties with whom the hospital facilitycollaborated, or with whom it contractedfor assistance, in conducting the CHNA.

(iii) Input from persons who repre-sent the broad interests of the communityserved by the hospital facility. A hospitalfacility’s CHNA report will be consid-ered to describe how the hospital facilitytook into account input from persons whorepresent the broad interests of the com-munity it serves for purposes of paragraph(b)(7)(i)(C) of this section if the CHNAreport summarizes, in general terms, theinput provided by such persons and howand over what time period such input wasprovided (for example, whether throughmeetings, focus groups, interviews, sur-veys, or written comments and betweenwhat dates); provides the names of orga-nizations providing input and summarizesthe nature and extent of the organiza-tion’s input; and describes the medicallyunderserved, low-income, or minoritypopulations being represented by organi-zations or individuals that provided input.A CHNA report does not need to nameor otherwise individually identify anyindividuals participating in communityforums, focus groups, survey samples, orsimilar groups.

2013–21 I.R.B. 1131 May 20, 2013

(iv) Separate CHNA reports. While ahospital facility may conduct its CHNA incollaboration with other organizations andfacilities (including, but not limited to, re-lated and unrelated hospital organizationsand facilities, for-profit and governmenthospitals, governmental departments, andnonprofit organizations), every hospital fa-cility must document the information de-scribed in this paragraph (b)(7) in a sep-arate CHNA report to satisfy paragraph(b)(1)(iv) of this section unless it is eligi-ble to adopt a joint CHNA report as de-scribed in paragraph (b)(7)(v) of this sec-tion. However, if a hospital facility is col-laborating with other facilities and organi-zations in conducting its CHNA or if an-other organization has conducted a CHNAfor all or part of the hospital facility’s com-munity, portions of the hospital facility’sCHNA report may be substantively identi-cal to portions of a CHNA report of a col-laborating hospital facility or the other or-ganization conducting a CHNA, if appro-priate under the facts and circumstances.For example, if a hospital facility conductsa survey of the health needs of residentsof homeless shelters located in the com-munity in collaboration with other hospitalfacilities, the description of that survey inthe hospital facility’s CHNA report may beidentical to the description contained in theCHNA reports for the other collaboratinghospital facilities. Similarly, if the state orlocal public health department with juris-diction over the community served by thehospital facility conducts an inventory ofcommunity health improvement resourcesavailable in that community, the hospitalfacility may include that inventory in itsCHNA report.

(v) Joint CHNA reports—(A) In gen-eral. A hospital facility that collaborateswith other hospital facilities in conductingits CHNA will satisfy paragraph (b)(1)(iv)of this section if an authorized body of thehospital facility adopts for the hospital fa-cility a joint CHNA report produced forall of the collaborating hospital facilities,as long as all of the collaborating hospitalfacilities define their community to be thesame and conduct a joint CHNA process,and the joint CHNA report is clearly iden-tified as applying to the hospital facility.

(B) Example. The following exampleillustrates this paragraph (b)(7)(v):

Example. P is one of ten hospital facilities lo-cated in and serving the populations of a particular

Metropolitan Statistical Area (MSA). P and the othernine facilities in the MSA, some of which are un-related to P, decide to collaborate in conducting aCHNA for the MSA and to each define their commu-nity as constituting the entire MSA. The ten hospitalfacilities work together with the state and local healthdepartments of jurisdictions in the MSA to assess thehealth needs of the MSA and collaborate in conduct-ing surveys and holding public forums to receive in-put from the MSA’s residents, including its medicallyunderserved, low-income, and minority populations.The hospital facilities then work together to preparea joint CHNA report documenting this joint CHNAprocess that contains all of the elements described inparagraph (b)(7)(i) of this section. The joint CHNAreport identifies all of the collaborating hospital fa-cilities, including P, by name, both within the reportitself and on the cover page. The board of directors ofthe hospital organization operating P adopts the jointCHNA report for P. P has complied with the require-ments of this paragraph (b)(7)(v) and, accordingly,has satisfied paragraph (b)(1)(iv) of this section.

(8) Making the CHNA report widelyavailable to the public—(i) In general. Forpurposes of paragraph (b)(1)(v) of this sec-tion, a hospital facility’s CHNA report ismade widely available to the public only ifthe hospital facility—

(A) Makes the CHNA report widelyavailable on a Web site, as defined in§1.501(r)–1(c)(4), at least until the date thehospital facility has made widely availableon a Web site its two subsequent CHNAreports; and

(B) Makes a paper copy of the CHNAreport available for public inspection with-out charge at the hospital facility at leastuntil the date the hospital facility has madeavailable for public inspection withoutcharge a paper copy of its two subsequentCHNA reports.

(ii) Making draft CHNA reports widelyavailable. Notwithstanding paragraph(b)(8)(i) of this section, if a hospital fa-cility makes widely available on a Website (and/or for public inspection) a ver-sion of the CHNA report that is expresslymarked as a draft on which the public maycomment, the hospital facility will not beconsidered to have made the CHNA reportwidely available to the public for purposesof determining the date on which the hos-pital facility has conducted a CHNA underparagraph (a) of this section.

(c) Implementation strategy—(1) Ingeneral. For purposes of paragraph (a)(2)of this section, a hospital facility’s imple-mentation strategy to meet the communityhealth needs identified through the hospi-tal facility’s CHNA is a written plan that,

with respect to each significant health needidentified through the CHNA, either—

(i) Describes how the hospital facilityplans to address the health need; or

(ii) Identifies the health need as one thehospital facility does not intend to addressand explains why the hospital facility doesnot intend to address the health need.

(2) Description of how the hospital fa-cility plans to address a significant healthneed. In describing how a hospital fa-cility plans to address a significant healthneed identified through a CHNA for pur-poses of paragraph (c)(1)(i) of this sec-tion, the implementation strategy must de-scribe the actions the hospital facility in-tends to take to address the health need, theanticipated impact of these actions, and aplan to evaluate such impact. The imple-mentation strategy must also identify theprograms and resources the hospital facil-ity plans to commit to address the healthneed. Finally, the implementation strat-egy must describe any planned collabora-tion between the hospital facility and otherfacilities or organizations in addressing thehealth need.

(3) Description of why a hospital facil-ity is not addressing a significant healthneed. In explaining why it does not in-tend to address a significant health need forpurposes of paragraph (c)(1)(ii) of this sec-tion, a hospital facility may provide a briefexplanation of its reason for not addressingthe health need, including, but not limitedto, resource constraints, other facilities ororganizations in the community addressingthe need, relative lack of expertise or com-petencies to effectively address the need, arelatively low priority assigned to the need,and/or a lack of identified effective inter-ventions to address the need.

(4) Joint implementation strategies. Ahospital facility may develop an imple-mentation strategy in collaboration withother facilities and organizations, includ-ing, but not limited to, related and un-related hospital organizations and facili-ties, for-profit and government hospitals,governmental departments, and nonprofitorganizations. In general, a hospital fa-cility that collaborates with other facili-ties and organizations in developing itsimplementation strategy must still docu-ment its implementation strategy in a sep-arate written plan that is tailored to theparticular hospital facility, taking into ac-count its specific programs and resources.

May 20, 2013 1132 2013–21 I.R.B.

However, a hospital facility that adopts ajoint CHNA report described in paragraph(b)(7)(v) of this section may also adopt ajoint implementation strategy that, with re-spect to each significant health need iden-tified through the joint CHNA, either de-scribes how the collaborating hospital fa-cilities plan to address the health need oridentifies the health need as one the hos-pital facilities do not intend to address andexplains why the hospital facilities do notintend to address the health need, as longas the joint implementation strategy—

(i) Is clearly identified as applying tothe hospital facility;

(ii) Clearly identifies the hospital fa-cility’s particular role and responsibilitiesin taking the actions described in the im-plementation strategy and the programsand resources the hospital facility plans tocommit to such actions; and

(iii) Includes a summary or other toolthat helps the reader easily locate thoseportions of the joint implementation strat-egy that relate to the hospital facility.

(5) When the implementation strategymust be adopted—(i) In general. For pur-poses of paragraph (a)(2) of this section, inorder to have adopted an implementationstrategy to meet the health needs identi-fied through a hospital facility’s CHNA bythe end of the same taxable year in whichthe hospital facility conducts that CHNA,an authorized body of the hospital facil-ity must adopt the implementation strategyduring the taxable year in which the hos-pital facility completes the final step forthe CHNA described in paragraph (b)(1) ofthis section, regardless of whether the hos-pital facility began working on the CHNAin a prior taxable year.

(ii) Example. The following exampleillustrates this paragraph (c)(5):

Example. M is a hospital facility that last con-ducted a CHNA and adopted an implementation strat-egy in Year 1. In Year 3, M defines the communityit serves, assesses the health needs of that commu-nity, and takes into account input from persons whorepresent the broad interests of that community. InYear 4, M documents its CHNA in a CHNA reportthat is adopted by an authorized body of M, makesthe CHNA report widely available on a Web site, andmakes paper copies available for public inspection.To meet the requirements of paragraph (a)(2) of thissection, an authorized body of M must adopt an im-plementation strategy to meet the health needs iden-tified through that CHNA by the last day of Year 4.

(d) New hospital facilities. A hospitalfacility that is newly acquired or placed

into service, or that becomes newly subjectto the requirements of section 501(r) be-cause the hospital organization that oper-ates it is newly recognized as described insection 501(c)(3), must meet the require-ments of section 501(r)(3) by the last dayof the second taxable year beginning af-ter the date, respectively, the hospital fa-cility is acquired; licensed, registered, orsimilarly recognized by its state as a hos-pital; or newly subject to the requirementsof section 501(r) as a result of the hospitalorganization operating it being recognizedas described in section 501(c)(3).

(e) Transition rules—(1) CHNA con-ducted in taxable year beginning beforeMarch 23, 2012. A hospital facility thatconducted a CHNA described in section501(r)(3) in either its first taxable yearbeginning after March 23, 2010, or itsfirst taxable year beginning after March23, 2011, does not need to meet the re-quirements of section 501(r)(3) again un-til the third taxable year following the tax-able year in which the hospital facility con-ducted that CHNA, provided that the hos-pital facility has adopted an implementa-tion strategy to meet the community healthneeds identified through that CHNA on orbefore the 15th day of the fifth calendarmonth following the close of its first tax-able year beginning after March 23, 2012.

(2) CHNA conducted in first taxableyear beginning after March 23, 2012. Ahospital facility that conducts a CHNA de-scribed in section 501(r)(3) in its first tax-able year beginning after March 23, 2012,will be deemed to satisfy paragraph (a)(2)of this section during that taxable year ifan authorized body of the hospital facil-ity adopts an implementation strategy tomeet the community health needs identi-fied through that CHNA on or before the15th day of the fifth calendar month fol-lowing the close of its first taxable year be-ginning after March 23, 2012.

Par. 5. Section 1.501(r)–7 as proposedto be amended at 77 FR 38169 (June 26,2012) is proposed to be further amendedby revising the section to read as follows:

§1.501(r)–7 Effective/applicability dates.

(a) Effective/applicability date. Therules of §1.501(r)–1 through §1.501(r)–6are effective on the date of publication of

the Treasury decision adopting these rulesas final or temporary regulations.

(b) Reliance and transition period. Ahospital facility may rely on §1.501(r)–3of the proposed regulations published inthe Federal Register on April 5, 2013, forany CHNA conducted or implementationstrategy adopted on or before the date thatis six months after these regulations arepublished as final or temporary regulationsin the Federal Register.

Par. 6. Section 1.6012–2 is amended byredesignating paragraphs (i) through (k) asparagraphs (j) through (l) and adding newparagraph (i) to read as follows:

§1.6012–2 Corporations required to makereturns of income.

* * * * *(i) Hospital organizations with non-

compliant hospital facilities. Everyhospital organization (as defined in§1.501(r)–1(b)(16)) that is subject tothe tax imposed by §1.501(r)–2(d) shallmake a return on Form 990-T. The filingof a return to pay the tax described in§1.501(r)–2(d) does not relieve the organ-ization of the duty of filing other requiredreturns.

* * * * *Par. 7. Section 1.6012–3 is amended

by adding new paragraph (a)(10) to readas follows:

§1.6012–3 Returns by fiduciaries.

(a) * * *(10) Hospital organizations organized

as trusts with noncompliant hospital facil-ities. Every fiduciary for a hospital organ-ization (as defined in §1.501(r)–1(b)(16))organized as a trust described in section511(b)(2) that is subject to the tax imposedby §1.501(r)–2(d) shall make a return onForm 990-T. The filing of a return to paythe tax described in §1.501(r)–2(d) doesnot relieve the organization of the duty offiling other required returns.

* * * * *Par. 8. Section 1.6033–2 is amended by

adding paragraphs (a)(2)(ii)(l) and (k)(4)to read as follows:

§1.6033–2 Returns by exemptorganizations (taxable years beginningafter December 31, 1969) and returns bycertain nonexempt organizations (taxable

2013–21 I.R.B. 1133 May 20, 2013

years beginning after December 31,1980).

(a) * * *(2) * * *(ii) * * *(I) In the case of a hospital organiza-

tion (as defined in §1.501(r)–1(b)(16)) de-scribed in section 501(c)(3) during the tax-able year—

(1) A copy of its audited financial state-ments for the taxable year (or, in the case ofan organization the financial statements ofwhich are included in consolidated finan-cial statements with other organizations,such consolidated financial statements);

(2) Either a copy of the most recentlyadopted implementation strategy, withinthe meaning of §1.501(r)–3(c), for eachhospital facility it operates or the URLof each web page on which it has madeeach such implementation strategy widelyavailable on a Web site within the mean-ing of §1.501(r)–1(c)(4) along with or aspart of the community health needs assess-ment (CHNA) to which the implementa-tion strategy relates;

(3) For each hospital facility it operates,a description of the actions taken duringthe taxable year to address the significanthealth needs identified through its most re-cently conducted CHNA, within the mean-ing of §1.501(r)–3(b), or, if no actionswere taken with respect to one or more ofthese health needs, the reason(s) why noactions were taken; and

(4) The amount of the excise tax im-posed on the organization under section4959 during the taxable year.

* * * * *(k) * * *(4) The applicability of paragraph

(a)(2)(ii)(l) of this section shall be limitedto returns filed on or after the date the reg-ulations adding (a)(2)(ii)(l) are publishedas final or temporary regulations in theFederal Register.

PART 53—FOUNDATION ANDSIMILAR EXCISE TAXES

Par. 9. The authority citation for part53 continues to read in part as follows:

Authority: 26 U.S.C. 7805 * * *Par. 10. Section 53.4959–1 is added to

read as follows:

§53.4959–1 Taxes on failures by hospitalorganizations to meet section 501(r)(3).

(a) Excise tax for failure to meet the sec-tion 501(r)(3) requirements—(1) In gen-eral. If a hospital organization (as definedin §1.501(r)–1(b)(16)) fails to meet the re-quirements of section 501(r)(3) separatelywith respect to a hospital facility it oper-ates in any taxable year, there is imposedon the hospital organization a tax equal to$50,000. If a hospital organization oper-ates multiple hospital facilities and fails tomeet the requirements of section 501(r)(3)with respect to more than one facility it op-erates, the $50,000 tax is imposed on thehospital organization separately for eachhospital facility’s failure. The tax may beimposed for each taxable year that a hos-pital facility fails to meet the requirementsof section 501(r)(3). The tax imposed bythis section may be imposed in addition toany tax imposed by §1.501(r)–2(d) or as aresult of revocation of a hospital organiza-tion’s section 501(c)(3) status.

(2) Examples. The following examplesillustrate this paragraph (a):

Example 1. (i) U is a hospital organization thatoperates only one hospital facility, V. In Year 1,V conducts a community health needs assessment(CHNA) and adopts an implementation strategy tomeet the health needs identified through the CHNA.In Years 2 and 3, V does not conduct a CHNA. Vfails to conduct a CHNA by the last day of Year 4.Accordingly, U has failed to meet the requirements ofsection 501(r)(3) with respect to V in Year 4 becauseV has failed to conduct a CHNA in Years 2, 3, and 4.U is subject to a tax equal to $50,000 for Year 4.

(ii) V also fails to conduct a CHNA by the lastday of Year 5. Accordingly, U has failed to meet therequirements of section 501(r)(3) with respect to Vin Year 5 because V has failed to conduct a CHNAin Years 3, 4, and 5. U is subject to a tax equal to$50,000 for Year 5.

Example 2. P is a hospital organization thatoperates only one hospital facility, Q. In Year 1, Qconducts a CHNA and adopts an implementationstrategy to meet the health needs identified throughthe CHNA. In Years 2 and 3, Q does not conducta CHNA. In Year 4, Q conducts a CHNA but doesnot adopt an implementation strategy to meet thehealth needs identified through that CHNA by thelast day of Year 4. Accordingly, P has failed to meetthe requirements of section 501(r)(3) with respectto Q in Year 4 because Q has failed to adopt animplementation strategy by the end of the taxableyear in which Q conducted its CHNA. P is subject toa tax equal to $50,000 for Year 4.

Example 3. R is a hospital organization that oper-ates two hospital facilities, S and T. In Year 1, S and Teach conduct a CHNA and adopt an implementationstrategy to meet the health needs identified through

the CHNA. In Years 2 and 3, S and T do not conducta CHNA. S and T each fail to conduct a CHNA by thelast day of Year 4. Accordingly, R has failed to meetthe requirements of section 501(r)(3) with respect toboth S and T in Year 4. R is subject to a tax equalto $100,000 ($50,000 for S’s failure plus $50,000 forT’s failure) for Year 4.

(b) Effective/applicability dates. Theserules are effective on the date of publi-cation of the Treasury decision adoptingthese rules as final or temporary regula-tions.

Steven T. Miller,Deputy Commissioner forServices and Enforcement.

(Filed by the Office of the Federal Register on April 3, 2013,4:15 p.m., and published in the issue of the Federal Registerfor April 5, 2013, 78 F.R. 20523)

Section 1446 Tax for FiscalYear Partnerships in 2013

Announcement 2013–30

Partnerships that have effectively con-nected taxable income (ECTI) allocable toa foreign partner must file a 2012 Form8804, Annual Return for Partnership With-holding Tax (Section 1446), for any taxableyear that begins in 2012. In all such cases,the 2012 Form 8804 continues to apply thetax rates in effect in 2012 for purposes ofdetermining the amount of section 1446withholding tax that partnerships must payfor taxable years beginning in 2012.

Foreign partners in a fiscal year part-nership with a taxable year ending in 2013nonetheless must pay tax on their distribu-tive share of the partnership’s ECTI basedon the tax rates in effect in the taxable yearof their inclusion as determined under sec-tion 706(a).

This Announcement is effective forpartnership taxable years beginning in2012.

DRAFTING INFORMATION

The principal author of this an-nouncement is Ronald M. Gootzeit ofthe Office of Associate Chief Counsel(International). For further informationregarding this announcement contactRonald M. Gootzeit at (202) 622–3860(not a toll-free call).

May 20, 2013 1134 2013–21 I.R.B.

Deletions From CumulativeList of OrganizationsContributions to Whichare Deductible Under Section170 of the Code

Announcement 2013–31

The Internal Revenue Service has re-voked its determination that the organi-zations listed below qualify as organiza-tions described in sections 501(c)(3) and170(c)(2) of the Internal Revenue Code of1986.

Generally, the Service will not disallowdeductions for contributions made to alisted organization on or before the dateof announcement in the Internal RevenueBulletin that an organization no longerqualifies. However, the Service is notprecluded from disallowing a deductionfor any contributions made after an or-ganization ceases to qualify under section170(c)(2) if the organization has not timelyfiled a suit for declaratory judgment undersection 7428 and if the contributor (1) hadknowledge of the revocation of the rulingor determination letter, (2) was aware thatsuch revocation was imminent, or (3) wasin part responsible for or was aware of the

activities or omissions of the organizationthat brought about this revocation.

If on the other hand a suit for declara-tory judgment has been timely filed, con-tributions from individuals and organiza-tions described in section 170(c)(2) thatare otherwise allowable will continue tobe deductible. Protection under section7428(c) would begin on May 20, 2013, andwould end on the date the court first deter-mines that the organization is not describedin section 170(c)(2) as more particularlyset forth in section 7428(c)(1). For indi-vidual contributors, the maximum deduc-tion protected is $1,000, with a husbandand wife treated as one contributor. Thisbenefit is not extended to any individual, inwhole or in part, for the acts or omissionsof the organization that were the basis forrevocation.

21st Century Animal Resource &Education ServicesDolan Springs, AZ

Books For PeopleYuma, AZ

California Nairobi International ChildrensOrganizationFresno, CA

Cape Verdean Club of Falmouth Inc.Teaticket, MA

Congressional District Programs, Inc.Falls Church, VA

Dr. R.C. Samanta Roy Institute of Scienceand Technology, Inc.Green Bay, WI

Eko Club, Inc.Houston, TX

Everything Must Change, Inc.Philadelphia, PA

Excalibur FoundationSparks, NV

Functional Social Solutions, Inc.Long Beach, CA

Gateway Educational ServicesHonolulu, HI

Good Housing, Inc.Merrick, NY

Holland Peck Charitable FoundationCarefree, AZ

Kona University, Inc.Honolulu, HI

Lakeland-Winter Haven Kennel Club, Inc.Lakeland, FL

Life Changes Ministries International Inc.Fort Mill, SC

Marley FundGreenville, NC

Needham Community Theatre, Inc.Needham, MA

2013–21 I.R.B. 1135 May 20, 2013

Definition of TermsRevenue rulings and revenue procedures(hereinafter referred to as “rulings”) thathave an effect on previous rulings use thefollowing defined terms to describe the ef-fect:

Amplified describes a situation whereno change is being made in a prior pub-lished position, but the prior position is be-ing extended to apply to a variation of thefact situation set forth therein. Thus, ifan earlier ruling held that a principle ap-plied to A, and the new ruling holds that thesame principle also applies to B, the earlierruling is amplified. (Compare with modi-fied, below).

Clarified is used in those instanceswhere the language in a prior ruling is be-ing made clear because the language hascaused, or may cause, some confusion.It is not used where a position in a priorruling is being changed.

Distinguished describes a situationwhere a ruling mentions a previously pub-lished ruling and points out an essentialdifference between them.

Modified is used where the substanceof a previously published position is beingchanged. Thus, if a prior ruling held that aprinciple applied to A but not to B, and thenew ruling holds that it applies to both A

and B, the prior ruling is modified becauseit corrects a published position. (Comparewith amplified and clarified, above).

Obsoleted describes a previously pub-lished ruling that is not considered deter-minative with respect to future transac-tions. This term is most commonly used ina ruling that lists previously published rul-ings that are obsoleted because of changesin laws or regulations. A ruling may alsobe obsoleted because the substance hasbeen included in regulations subsequentlyadopted.

Revoked describes situations where theposition in the previously published rulingis not correct and the correct position isbeing stated in a new ruling.

Superseded describes a situation wherethe new ruling does nothing more than re-state the substance and situation of a previ-ously published ruling (or rulings). Thus,the term is used to republish under the1986 Code and regulations the same po-sition published under the 1939 Code andregulations. The term is also used whenit is desired to republish in a single rul-ing a series of situations, names, etc., thatwere previously published over a period oftime in separate rulings. If the new rul-ing does more than restate the substance

of a prior ruling, a combination of termsis used. For example, modified and su-perseded describes a situation where thesubstance of a previously published rulingis being changed in part and is continuedwithout change in part and it is desired torestate the valid portion of the previouslypublished ruling in a new ruling that is selfcontained. In this case, the previously pub-lished ruling is first modified and then, asmodified, is superseded.

Supplemented is used in situations inwhich a list, such as a list of the names ofcountries, is published in a ruling and thatlist is expanded by adding further names insubsequent rulings. After the original rul-ing has been supplemented several times, anew ruling may be published that includesthe list in the original ruling and the ad-ditions, and supersedes all prior rulings inthe series.

Suspended is used in rare situations toshow that the previous published rulingswill not be applied pending some futureaction such as the issuance of new oramended regulations, the outcome of casesin litigation, or the outcome of a Servicestudy.

AbbreviationsThe following abbreviations in current useand formerly used will appear in materialpublished in the Bulletin.

A—Individual.Acq.—Acquiescence.B—Individual.BE—Beneficiary.BK—Bank.B.T.A.—Board of Tax Appeals.C—Individual.C.B.—Cumulative Bulletin.CFR—Code of Federal Regulations.CI—City.COOP—Cooperative.Ct.D.—Court Decision.CY—County.D—Decedent.DC—Dummy Corporation.DE—Donee.Del. Order—Delegation Order.DISC—Domestic International Sales Corporation.DR—Donor.E—Estate.EE—Employee.E.O.—Executive Order.

ER—Employer.ERISA—Employee Retirement Income Security Act.EX—Executor.F—Fiduciary.FC—Foreign Country.FICA—Federal Insurance Contributions Act.FISC—Foreign International Sales Company.FPH—Foreign Personal Holding Company.F.R.—Federal Register.FUTA—Federal Unemployment Tax Act.FX—Foreign corporation.G.C.M.—Chief Counsel’s Memorandum.GE—Grantee.GP—General Partner.GR—Grantor.IC—Insurance Company.I.R.B.—Internal Revenue Bulletin.LE—Lessee.LP—Limited Partner.LR—Lessor.M—Minor.Nonacq.—Nonacquiescence.O—Organization.P—Parent Corporation.PHC—Personal Holding Company.PO—Possession of the U.S.PR—Partner.

PRS—Partnership.PTE—Prohibited Transaction Exemption.Pub. L.—Public Law.REIT—Real Estate Investment Trust.Rev. Proc.—Revenue Procedure.Rev. Rul.—Revenue Ruling.S—Subsidiary.S.P.R.—Statement of Procedural Rules.Stat.—Statutes at Large.T—Target Corporation.T.C.—Tax Court.T.D. —Treasury Decision.TFE—Transferee.TFR—Transferor.T.I.R.—Technical Information Release.TP—Taxpayer.TR—Trust.TT—Trustee.U.S.C.—United States Code.X—Corporation.Y—Corporation.Z —Corporation.

May 20, 2013 i 2013–21 I.R.B.

Numerical Finding List1

Bulletins 2013–1 through 2013–21

Announcements:

2013-1, 2013-1 I.R.B. 251

2013-2, 2013-2 I.R.B. 271

2013-3, 2013-2 I.R.B. 271

2013-4, 2013-4 I.R.B. 440

2013-5, 2013-3 I.R.B. 306

2013-6, 2013-3 I.R.B. 307

2013-7, 2013-3 I.R.B. 308

2013-8, 2013-4 I.R.B. 440

2013-9, 2013-4 I.R.B. 441

2013-10, 2013-3 I.R.B. 311

2013-11, 2013-6 I.R.B. 483

2013-12, 2013-11 I.R.B. 651

2013-13, 2013-9 I.R.B. 532

2013-14, 2013-11 I.R.B. 651

2013-15, 2013-11 I.R.B. 652

2013-16, 2013-14 I.R.B. 738

2013-17, 2013-16 I.R.B. 911

2013-19, 2013-14 I.R.B. 760

2013-20, 2013-14 I.R.B. 761

2013-21, 2013-17 I.R.B. 980

2013-22, 2013-17 I.R.B. 981

2013-23, 2013-16 I.R.B. 940

2013-26, 2013-16 I.R.B. 940

2013-27, 2013-17 I.R.B. 981

2013-28, 2013-17 I.R.B. 982

2013-29, 2013-18 I.R.B. 1024

2013-30, 2013-21 I.R.B. 1134

2013-31, 2013-21 I.R.B. 1135

2013-33, 2013-20 I.R.B. 1098

Notices:

2013-1, 2013-3 I.R.B. 281

2013-2, 2013-6 I.R.B. 473

2013-3, 2013-7 I.R.B. 484

2013-4, 2013-9 I.R.B. 527

2013-5, 2013-9 I.R.B. 529

2013-6, 2013-10 I.R.B. 540

2013-7, 2013-6 I.R.B. 477

2013-8, 2013-7 I.R.B. 486

2013-9, 2013-9 I.R.B. 529

2013-10, 2013-8 I.R.B. 503

2013-11, 2013-11 I.R.B. 610

2013-12, 2013-10 I.R.B. 543

2013-13, 2013-12 I.R.B. 659

2013-14, 2013-13 I.R.B. 712

2013-15, 2013-14 I.R.B. 739

2013-16, 2013-14 I.R.B. 740

2013-17, 2013-20 I.R.B. 1082

2013-18, 2013-14 I.R.B. 742

2013-19, 2013-14 I.R.B. 743

2013-20, 2013-15 I.R.B. 902

Notices— Continued:

2013-21, 2013-15 I.R.B. 903

2013-22, 2013-15 I.R.B. 904

2013-23, 2013-16 I.R.B. 906

2013-24, 2013-16 I.R.B. 909

2013-25, 2013-17 I.R.B. 978

2013-26, 2013-18 I.R.B. 984

2013-27, 2013-18 I.R.B. 985

2013-28, 2013-19 I.R.B. 1039

2013-29, 2013-20 I.R.B. 1085

2013-30, 2013-21 I.R.B. 1099

2013-31, 2013-21 I.R.B. 1099

Proposed Regulations:

REG-160873-04, 2013-20 I.R.B. 1089

REG-155929-06, 2013-11 I.R.B. 650

REG-106918-08, 2013-13 I.R.B. 714

REG-141066-09, 2013-3 I.R.B. 289

REG-148873-09, 2013-7 I.R.B. 494

REG-102966-10, 2013-10 I.R.B. 579

REG-120391-10, 2013-18 I.R.B. 1005

REG-132702-10, 2013-19 I.R.B. 1042

REG-140649-11, 2013-12 I.R.B. 666

REG-106499-12, 2013-21 I.R.B. 1111

REG-118315-12, 2013-14 I.R.B. 746

REG-122706-12, 2013-19 I.R.B. 1043

REG-122707-12, 2013-5 I.R.B. 450

REG-148500-12, 2013-13 I.R.B. 716

REG-154563-12, 2013-20 I.R.B. 1097

Revenue Procedures:

2013-1, 2013-1 I.R.B. 1

2013-2, 2013-1 I.R.B. 92

2013-3, 2013-1 I.R.B. 113

2013-4, 2013-1 I.R.B. 126

2013-5, 2013-1 I.R.B. 170

2013-6, 2013-1 I.R.B. 198

2013-7, 2013-1 I.R.B. 233

2013-8, 2013-1 I.R.B. 237

2013-9, 2013-2 I.R.B. 255

2013-10, 2013-2 I.R.B. 267

2013-11, 2013-2 I.R.B. 269

2013-12, 2013-4 I.R.B. 313

2013-13, 2013-6 I.R.B. 478

2013-14, 2013-3 I.R.B. 283

2013-15, 2013-5 I.R.B. 444

2013-16, 2013-7 I.R.B. 488

2013-17, 2013-11 I.R.B. 612

2013-18, 2013-8 I.R.B. 503

2013-19, 2013-11 I.R.B. 648

2013-20, 2013-14 I.R.B. 744

2013-21, 2013-12 I.R.B. 660

2013-22, 2013-18 I.R.B. 985

2013-23, 2013-17 I.R.B. 978

2013-25, 2013-21 I.R.B. 1110

Revenue Rulings:

2013-1, 2013-2 I.R.B. 252

2013-2, 2013-10 I.R.B. 533

2013-3, 2013-8 I.R.B. 500

2013-4, 2013-9 I.R.B. 520

2013-5, 2013-9 I.R.B. 525

2013-6, 2013-13 I.R.B. 701

2013-7, 2013-11 I.R.B. 608

2013-8, 2013-15 I.R.B. 763

2013-9, 2013-15 I.R.B. 764

2013-11, 2013-20 I.R.B. 1059

Tax Conventions:

2013-16, 2013-14 I.R.B. 738

Treasury Decisions:

9601, 2013-10 I.R.B. 535

9603, 2013-3 I.R.B. 273

9605, 2013-11 I.R.B. 587

9606, 2013-11 I.R.B. 586

9607, 2013-6 I.R.B. 469

9608, 2013-3 I.R.B. 274

9609, 2013-12 I.R.B. 655

9610, 2013-15 I.R.B. 765

9611, 2013-13 I.R.B. 699

9612, 2013-13 I.R.B. 678

9613, 2013-15 I.R.B. 900

9614, 2013-17 I.R.B. 947

9615, 2013-19 I.R.B. 1026

9616, 2013-20 I.R.B. 1061

1 A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2012–27 through 2012–52 is in Internal Revenue Bulletin2012–52, dated December 27, 2012.

2013–21 I.R.B. ii May 20, 2013

Finding List of Current Actions onPreviously Published Items1

Bulletins 2013–1 through 2013–21

Announcements:

2012-42

Obsoleted by

T.D. 9610, 2013-15 I.R.B. 765

2013-12

Supplemented by

Ann. 2013-22, 2013-17 I.R.B. 981

Notices:

87-64

Obsoleted by

T.D. 9614, 2013-17 I.R.B. 947

2000-45

Modified and superseded by

Notice 2013-18, 2013-14 I.R.B. 742

2006-87

Superseded by

Notice 2013-31, 2013-21 I.R.B. 1099

2007-25

Superseded by

Notice 2013-31, 2013-21 I.R.B. 1099

2007-77

Superseded by

Notice 2013-31, 2013-21 I.R.B. 1099

2008-10

Obsoleted by

T.D. 9615, 2013-19 I.R.B. 1026

2008-107

Superseded by

Notice 2013-31, 2013-21 I.R.B. 1099

2010-27

Superseded by

Notice 2013-31, 2013-21 I.R.B. 1099

2010-60

Obsoleted by

T.D. 9610, 2013-15 I.R.B. 765

2011-8

Superseded by

Notice 2013-31, 2013-21 I.R.B. 1099

2011-14

Amplified and supplemented by

Notice 2013-7, 2013-6 I.R.B. 477

2011-34

Obsoleted by

T.D. 9610, 2013-15 I.R.B. 765

Notices— Continued:

2011-38

Obsoleted by

REG-148873-09, 2013-7 I.R.B. 494

2011-53

Obsoleted by

T.D. 9610, 2013-15 I.R.B. 765

2012-19

Superseded by

Notice 2013-31, 2013-21 I.R.B. 1099

2012-60

Superseded by

Notice 2013-1, 2013-3 I.R.B. 281

2013-1


Notice 2013-16, 2013-14 I.R.B. 740

Proposed Regulations:

REG-140668-07

Corrected by

Ann. 2013-6, 2013-3 I.R.B. 307

Revenue Procedures:

87-57

Modified by

Rev. Proc. 2013-13, 2013-6 I.R.B. 478

2004-66


Rev. Proc. 2013-11, 2013-2 I.R.B. 269

2008-35


Rev. Proc. 2013-14, 2013-3 I.R.B. 283

2008-50


Rev. Proc. 2013-12, 2013-4 I.R.B. 313

2011-14

Modified by

Rev. Proc. 2013-20, 2013-14 I.R.B. 744

2011-49

Modified by

Rev. Proc. 2013-6, 2013-1 I.R.B. 198

2011-52

Modified and partly superseded by

Rev. Proc. 2013-15, 2013-5 I.R.B. 444

2011-55

Amplified and supplemented by

Notice 2013-7, 2013-6 I.R.B. 477

2011-61

Superseded by

Rev. Proc. 2013-17, 2013-11 I.R.B. 612

Revenue Procedures— Continued:

2011-62

Superseded by

Rev. Proc. 2013-18, 2013-8 I.R.B. 503

2012-1

Superseded by

Rev. Proc. 2013-1, 2013-1 I.R.B. 1

2012-2

Superseded by

Rev. Proc. 2013-2, 2013-1 I.R.B. 92

2012-3

Superseded by

Rev. Proc. 2013-3, 2013-1 I.R.B. 113

2012-4

Superseded by

Rev. Proc. 2013-4, 2013-1 I.R.B. 126

2012-5

Superseded by

Rev. Proc. 2013-5, 2013-1 I.R.B. 170

2012-6

Superseded by

Rev. Proc. 2013-6, 2013-1 I.R.B. 198

2012-7

Superseded by

Rev. Proc. 2013-7, 2013-1 I.R.B. 233

2012-8

Superseded by

Rev. Proc. 2013-8, 2013-1 I.R.B. 237

2012-9

Superseded by

Rev. Proc. 2013-9, 2013-2 I.R.B. 255

2012-10

Superseded by

Rev. Proc. 2013-10, 2013-2 I.R.B. 267

2012-30

Corrected and clarified by

Ann. 2013-3, 2013-2 I.R.B. 271

Updated by

Ann. 2013-10, 2013-3 I.R.B. 311

2012-46

Corrected by

Ann. 2013-11, 2013-6 I.R.B. 483

2013-1

Corrected by

Ann. 2013-9, 2013-4 I.R.B. 441

2013-4

Modified by

Rev. Proc. 2013-22, 2013-18 I.R.B. 985

2013-6

Revised by

Ann. 2013-15, 2013-11 I.R.B. 652

1 A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2012–27 through 2012–52 is in Internal Revenue Bulletin 2012–52, dated December 27,2012.

May 20, 2013 iii 2013–21 I.R.B.

Revenue Procedures— Continued:

Corrected by

Ann. 2013-13, 2013-9 I.R.B. 532

2013-8

Modified by

Rev. Proc. 2013-22, 2013-18 I.R.B. 985

2013-14

Modified by

Rev. Proc. 2013-19, 2013-11 I.R.B. 648

Revenue Rulings:

92-19

Supplemented in part by

Rev. Rul. 2013-4, 2013-9 I.R.B. 520

Treasury Decisions:

9564

Corrected by

Ann. 2013-4, 2013-4 I.R.B. 440

Amended by

Ann. 2013-7, 2013-3 I.R.B. 308

9604

Corrected by

Ann. 2013-19, 2013-14 I.R.B. 760

2013–21 I.R.B. iv May 20, 2013

Internal Revenue ServiceWashington, DC 20224Official BusinessPenalty for Private Use, $300

INTERNAL REVENUE BULLETINThe Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue

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