The Impact of IRS Tax Policy on Hospital Community Benefit Activities. Academic Article uri icon


  • The Internal Revenue Service (IRS) recently introduced tax code revisions requiring stricter oversight of community benefit activities (CBAs) conducted by tax-exempt, not-for-profit hospitals. We examine the impact of this tax requirement on CBAs among these hospitals relative to for-profit and government hospitals that were not subject to the new policy. We employed a quasi-experimental, difference-in-difference study design using a longitudinal observational approach and used secondary data collected by the American Hospital Association (years 2006-2010 including 20,538 hospital year observations). Findings show a significant increase in the reporting of 7 of the 13 CBAs among tax-exempt, not-for-profit hospitals compared with other hospitals after the policy change. Examples include partnering to conduct community health assessments ( b = 0.035, p = .002) and using capacity assessments to identify unmet community health needs ( b = 0.041, p = .001). Recent tax revisions are associated with increases in reported CBAs among tax-exempt, not-for-profit hospitals. As the debate continues regarding tax exemption status for not-for-profit hospitals, policy makers should expand efforts for enhanced accountability.

published proceedings

  • Med Care Res Rev

altmetric score

  • 1.25

author list (cited authors)

  • Yeager, V. A., Ferdinand, A. O., & Menachemi, N.

citation count

  • 5

complete list of authors

  • Yeager, Valerie A||Ferdinand, Alva O||Menachemi, Nir

publication date

  • April 2019