On Tuesday, July 14, the Internal Revenue Service (IRS) released Notice 2020-56 (the Hospital Relief Notice), which provides an additional postponement of requirements with respect to the conduct of a community health needs assessment (CHNA) applicable to hospitals, as discussed in more detail below.

CHNA Background

Generally, hospital organizations are required to meet certain additional requirements in order to maintain their charitable tax-exempt status. Such additional requirements must be met with respect to each hospital facility (Hospitals) operated by the organization. Included among the additional requirements applicable to Hospitals is a requirement to conduct a CHNA at least once every three years. A CHNA must take into account input from the community served by the Hospital and must be made widely available to the public. Additionally, a Hospital must adopt an implementation strategy to meet the community health needs identified by the CHNA (the Implementation Strategy) within four and a half months following the end of the tax year in which the Hospital completes the CHNA. Significant excise taxes apply to Hospitals that fail to meet either the CHNA requirement or the Implementation Strategy Requirement.

Prior COVID-19 Relief

Previously, the IRS issued Notice 2020-23 (the Initial Postponement Notice) on April 9, 2020, which, among other deadline relief as a result of the COVID-19 emergency, postponed the requirement to conduct a CHNA and the Implementation Strategy Requirement to July 15, 2020 (Initial Postponement Deadline), if the deadline to act on either obligation fell on or between April 1, 2020 and July 14, 2020 (the Initial Relief Period). The Initial Postponement Notice applied whether the original due date or a valid extension fell during the Initial Relief Period.

New Additional Postponement

Pursuant to the new Hospital Relief Notice, if the deadline for a Hospital to complete a CHNA or adopt an Implementation Strategy falls on or between April 1, 2020 and December 30, 2020 (the Updated Relief Period), the deadline is postponed to December 31, 2020 (the Updated Postponement Deadline). However, the Hospital Relief Notice also provides that, if both the CHNA deadline and the Implementation Strategy deadline fall during the Updated Relief Period, the Updated Postponement Deadline applies to both requirements. For example (as provided in the Hospital Relief Notice), if a Hospital was required to conduct a CHNA by April 30, 2020 and, thus was required to adopt an Implementation Strategy by September 15, 2020, such Hospital must complete both the CHNA and the Implementation Strategy by December 31, 2020. The requirement to meet both the CHNA requirement and the Implementation Strategy Requirement will be applicable to Hospitals with tax years ending on or before July 31, 2020 for which July 31, 2020 is the end of the third tax year since its last CHNA was completed. Hospitals with CHNA deadlines of July 31, 2020 would, under normal circumstances, be required to adopt an Implementation Strategy no later than December 15, 2020.