Analysis

Tax News & Views: Health Care Edition

May 2017 | Vol. 12 No. 35

Tax News & Views: Health Care Edition is a timely news summary bulletin authored by the Health Care Industry Group, Deloitte Tax LLP. The newsletter contains highlights from the latest tax developments in health care on Capitol Hill, at the White House, at the Internal Revenue Service, at the Treasury Department and in the courts. It is a valuable resource for tax and other professionals involved in the tax-exempt health care providers and health plans sectors, helping them remain current on tax developments that stand to have an impact on their businesses.

Supreme Court Hears Pension Plan Case

On March 27, 2017, the Supreme Court heard arguments in three cases of whether church-affiliated hospital systems’ pension plans are exempt from the requirements of the Employee Retirement Income Security Act (“ERISA”). ERISA requires pension plans to be fully funded and insured but also provides and exemption for pension plans of churches and other religious organizations.

The three hospitals in the cases contended that their plans are exempt and have been treated as such by government agencies for over thirty years. The workers suing the hospitals argued that the exemption to ERISA requirements was never meant to exempt church-affiliated plans, that the hospital plans have no relation with the church, and that the hospitals are jeopardizing workers’ retirement benefits.

In each case, the lower courts ruled against the hospitals. A Supreme Court Ruling is expected in June.

Tax News & Views: Health Care Edition May 2017

2016 IRS Data Book Released

The IRS recently released the 2016 Data Book which is a report describing activities conducted by the IRS during fiscal year 2016 (October 1, 2015, through September 30, 2016.) It provides information on returns filed and taxes collected, enforcement, taxpayer assistance, the IRS budget and workforce, and other selected activities. The Data Book also includes a section on tax-exempt activities and describes the number of tax-exempt organizations, the number of approvals of applications for tax-exempt status, and the volume of tax-exempt guidance and regulatory activity. Highlights from the Data Book include the following:

  • In FY16, the IRS examined 2,725 Forms 990, 990-EZ, and 990-N and 745 Forms 990-T.
  • In FY16, there were more than 1.8 million organizations recognized by the IRS as exempt from taxation of which 1.6 million were tax-exempt under IRC Section 501(c).
  • In FY16, the IRS closed 92,129 applications for tax-exempt status. Of those, the IRS approved tax-exempt status for 86,406 organizations.
  • The number of tax returns filed by tax-exempt organizations declined by 5.1% between FY15 and FY16.

Did you know?

IRS Releases Rev. Proc. 2017-28
The IRS recently released Revenue Procedure 2017-28, Credit or refund of tax under Federal Insurance Contributions Act (“FICA”) or Railroad Retirement Tax Act (“RRTA”). The revenue procedure provides guidance to employers on the requirements for employee consent used by an employer to support a claim for credit or refund of overpaid taxes under FICA or RRTA.

IRS Publishes List of Boycott Countries
The IRS recently published the list of countries which may require participation in, or cooperation with, an international boycott (within the meaning of IRC Section 999(b)(3). The list of countries includes Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, United Arab Emirates and Yemen. There were no changes to the list since it was last published in December 2016. The list can be accessed online.

IRS Seeking Comments on Exemption Applications
The Department of the Treasury is currently accepting comments related to Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, and Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. Written comments should be received on or before June 6, 2017. Additional information including the mailing address for comments can be accessed online.

Did you know?

Additional Resources

Deloitte Center for Health Solutions

The source for health care insights: The Deloitte Center for Health Solutions (DCHS) is the research division of Deloitte’s Life Sciences and Health Care practice. The goal of DCHS is to inform stakeholders across the health care system about emerging trends, challenges, and opportunities.

Health Care Current

Weekly insights to keep you informed and ahead. This weekly series explores breaking news and developments in the US health care industry, examines key issues facing life sciences and health care companies and provides updates and insights on policy, regulatory, and legislative changes.

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Contacts

Rachel Becker
Milwaukee
rbecker@deloitte.com 
+1 414 977 2567

Lori Boyce
Detroit
lboyce@deloitte.com
+1 313 396 3324

Fran Bedard
Nashville
fbedard@deloitte.com 
+1 615 259 1811

William Homer
Philadelphia
whomer@deloitte.com
+1 215 299 4642

Jeff Frank
Indianapolis
jdfrank@deloitte.com
+1 317 656 6921

Christine Kawecki
Jericho
ckawecki@deloitte.com
+1 516 918 7138

Alicia Janisch
Detroit
ajanisch@deloitte.com
+1 313 324 1442

Kristina Rasmussen
Minneapolis
krasmussen@deloitte.com
+1 612 397 4178

Joan McMahon
San Francisco
jmcmahon@deloitte.com
+1 415 783 5568

Steve Rovner 
Tampa
srovner@deloitte.com
+1 813 273 8355

Mary Rauschenberg
Chicago and Washington National Tax
mrauschenberg@deloitte.com 
+1 312 486 9544

Jim Sowar 
Cincinnati
jsowar@deloitte.com
+1 513 784 7242

John W. Sadoff, Jr
Atlanta
jsadoff@deloitte.com
+1 704 887 1810

 

 

Upcoming Webcasts

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The Mutual Agreement Procedure process: Preparing to resolve double taxation
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As life sciences and health care organizations face increasing pressures, many are looking at M&A to leverage economies of scale and drive the pace of innovation. What does the landscape look like so far this year, and what’s coming next? Understand what M&A in health care looks like today and where it may be headed tomorrow.

 

International Tax
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Transfer Pricing
May 10
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Tax Operations
May 11
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Federal Tax
May 17
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Tax Accounting & Provisions
June 8
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Life Sciences & Health Care
June 27
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