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.

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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Upcoming Webcasts

Post-merger integration tax strategies: Capturing synergies in a rapidly changing world
The M&A market has multinational businesses focused on how their tax departments can assist with capturing and improving after-tax synergies as they integrate new businesses. How can tax executives team with business leaders to contribute to this process? Explore recent global M&A market dynamics and considerations for unlocking desired synergies.

The Mutual Agreement Procedure process: Preparing to resolve double taxation
Tax authorities continue to increase their transfer pricing enforcement efforts, producing more adjustments and potential double taxation. How can a strategy of using the Mutual Agreement Procedure (MAP) process help relieve double taxation? Hear from an IRS transfer pricing executive and learn how changes in the transfer pricing environment could potentially impact taxpayers.

Global tax compliance and statutory accounting reporting: Emerging trends and developments
Many multinational companies are changing their approach to global tax compliance and reporting models as they face increased reporting requirements and enforcement, demands for transparency, and elevated tax risk. What should you know? Explore emerging trends and effective practices in global tax compliance and reporting.

Quarterly federal tax roundup: A passthroughs update
The passthroughs area of tax generally focuses on the taxation of partnerships and S corporations, and their respective partners and shareholders. It, among other things, considers the taxation of contributions, distributions, and transfers of owners’ interests. What are some recent technical developments, potential tax planning considerations, and marketplace trends that may impact your company? Learn about recent developments in passthroughs tax and potential implications for your company.

Company life events, tax accounting challenges, and other financial reporting updates
Many corporate transactions can trigger important tax accounting and provision issues. Which of these matters may be most important for your company as you approach upcoming transactions? Gain valuable insights on the latest standard-setting, regulatory, and tax law developments and their impact on financial reporting for taxes.

M&A in health care: What’s the forecast for 2017 and beyond?
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.


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Tax Operations
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Federal Tax
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Tax Accounting & Provisions
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Life Sciences & Health Care
June 27
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