HEAL ALTH THCARE E TAX UPDATE TE Anthon ony Pa Panico, o, C - PowerPoint PPT Presentation

HEAL ALTH THCARE E TAX UPDATE TE Anthon ony Pa Panico, o, C CPA Partner er, H Hea ealthcare S e Ser ervi vices es G Group Nov ovember 1 11, 2 2014 1 WithumS mSmi mith+Brow own, P PC ▪ BE IN A POSITION OF STRENGTH withum. m.com om

E L E CT ION UPDAT E 2 WithumS mSmi mith+Brow own, P PC ▪ BE IN A POSITION OF STRENGTH withum. m.com om

AGE NDA IRS a nd Sta te Upda te Afforda ble Ca re Ac t E mploye r Re porting Pre mium T a x Cre dit 2014 F orm 990 De fe nse of Ma rria g e Ac t 3 WithumS mSmi mith+Brow own, P PC ▪ BE IN A POSITION OF STRENGTH withum. m.com om

IRS UPDAT E 4 WithumS mSmi mith+Brow own, P PC ▪ BE IN A POSITION OF STRENGTH withum. m.com om

2015 L IMIT S  E le c tive de fe r r als to §401(k), §403(b) and §457(b) inc r e ase d to $18,000.  Ca tc h-up c o ntrib utio n limit inc re a se d to $6,000.  Soc ial Se c ur ity wage base inc r e ase d to $118,500.  Out- of- Poc ke t limits for gr oup he alth plans ar e $6,600 for individuals and $13,200 for familie s. 5 WithumS mSmi mith+Brow own, P PC ▪ BE IN A POSITION OF STRENGTH withum. m.com om

2014/ 2015 PRIORIT Y GUIDANCE PL AN  Re le ase d August 26, 2014.  16 pr oje c ts r e late d to tax- e xe mpt or ganizations: 1. Re gulations author izing Commissione r to adopt a str e amline d applic ation pr oc e ss for e ligible or ganizations to apply for r e c ognition as an IRC §501(c )(3). 2. Re late d r e ve nue pr oc e dur e se tting for th pr oc e dur e s for issuing de te r mination le tte r s on e xe mpt status unde r IRC §501(c )(3) to e ligible or ganizations that file F or m 1023- E Z. 6 WithumS mSmi mith+Brow own, P PC ▪ BE IN A POSITION OF STRENGTH withum. m.com om

2014/ 2015 PRIORIT Y GUIDANCE PL AN 3. Pr opose d r e gulations unde r IRC §501(c )(3) r e lating to politic al c ampaign inte r ve ntion. 4. F inal r e gulations on applying for e xe mption as nonpr ofit he alth insur anc e issue r unde r IRC §501(c )(29). 5. Guidanc e unde r IRC §512 on me thods of alloc ating e xpe nse s r e late d to dual use fac ilitie s. 6. F inal r e gulations unde r IRC §4942 and §4945 on r e lianc e standar ds for making good faith de te r minations. 7 WithumS mSmi mith+Brow own, P PC ▪ BE IN A POSITION OF STRENGTH withum. m.com om

T IGT A 2015 ANNUAL AUDIT PL AN  Imple me ntation and administr ation of ACA.  Combating ide ntity the ft.  Pr oc e ssing of tax- e xe mption applic ations.  Inte r national tax c omplianc e . 8 WithumS mSmi mith+Brow own, P PC ▪ BE IN A POSITION OF STRENGTH withum. m.com om

T AX- E XE MPT ION APPL ICAT IONS  Matthe w We ir , Dir e c tor with IRS T E / GE - Close d 117,000 applic ations this ye ar ; a 121% inc r e ase fr om pr ior ye ar .  About 95% of all F or ms 1023- E Z have be e n appr ove d c losing most applic ations in appr oximate ly 11 days.  Conc e r n that shor t for m is not thor ough.  IRS is instituting “pr e - de te r mination” pr oc e ss and “post- de te r mination” pr oc e ss 9 WithumS mSmi mith+Brow own, P PC ▪ BE IN A POSITION OF STRENGTH withum. m.com om

RE VOCAT ION OF T AX- E XE MPT ST AT US  Pe nsion Pr ote c tion Ac t of 2006.  Notic e 2011- 43 and Notic e 2011- 44.  Re ve nue Pr oc e dur e 2014- 11; Str e amline d Re tr oac tive Re instate me nt Pr oc e ss.  Re asonable c ause – 15 month time pe r iod. 10 WithumS mSmi mith+Brow own, P PC ▪ BE IN A POSITION OF STRENGTH withum. m.com om

RE VOCAT ION OF T AX- E XE MPT ST AT US  Or ganizations have had tax- e xe mpt status mistake nly r e voke d due to no syste matic indic ator in the IRS syste ms r e gar ding whe n an or ganization be gan ope r ations.  Re voc ation le tte r s se nt out we e ks afte r r e c e iving favor able de te r mination. 11 WithumS mSmi mith+Brow own, P PC ▪ BE IN A POSITION OF STRENGTH withum. m.com om

DE L INQUE NT PAYROL L T AXE S  T IGT A July 3, 2014 r e por t “Some T ax- E xe mpt Or ganizations Have Substantial De linque nt Payr oll T axe s”.  Pr e ss Re le ase August 13, 2014:  Mor e than 64,200 (3.8% ) of tax- e xe mpt or ganizations have appr oximate ly $875 million of tax de bt as of 6/ 16/ 2012.  1,200 or ganizations owe d mor e than $100,000 e ac h. 12 WithumS mSmi mith+Brow own, P PC ▪ BE IN A POSITION OF STRENGTH withum. m.com om

DE L INQUE NT PAYROL L T AXE S  T IGT A obje c tive is to de te r mine e xte nt of tax de bt of e xe mpt or ganizations and what E xe mpt Or ganizations func tion has take n to addr e ss non- c omplianc e .  T IGT A fur the r r e vie we d 25 tax- e xe mpt or ganizations. 13 WithumS mSmi mith+Brow own, P PC ▪ BE IN A POSITION OF STRENGTH withum. m.com om

DE L INQUE NT PAYROL L T AXE S  T IGT A r e c omme ndations to Dir e c tor of E O: 1. Coor dinate with Small Busine ss/ Se lf- E mploye d Division manage me nt to r e c e ive r e le vant c olle c tion infor mation, 2. Pe r iodic ally c omple te analyse s to ide ntify tax- e xe mpt or ganizations that pote ntially abuse tax- e xe mpt status for e xamination, and 3. Wor k with De par tme nt of T r e asur y to e valuate whe the r a le gislative pr oposal is war r ante d to str e ngthe n IRS ability to e nfor c e payr oll tax non- c omplianc e by tax- e xe mpt or ganizations. 14 WithumS mSmi mith+Brow own, P PC ▪ BE IN A POSITION OF STRENGTH withum. m.com om

DE L INQUE NT PAYROL L T AXE S  T IGT A r e por t found the following r e gar ding the Voluntar y Classific ation Se ttle me nt Pr ogr am (“VCSP”):  IRS doe s not obta in informa tion ne e de d to ve rify a c c ura c y of a pplic a tions a nd pa yme nts.  IRS doe s not re quire e mploye rs to provide informa tion on the VCSP a pplic a tion tha t ide ntifie s the spe c ific worke rs tha t a re be ing re c la ssifie d.  IRS thus una ble to ve rify the a c c ura c y of the c ompe nsa tion a mount re porte d on the a pplic a tion a nd the pa yme nt owe d.  IRS una ble to e sta blish a n e ffe c tive proc e ss to monitor VCSP a g re e me nts to e nsure c omplia nc e . 15 WithumS mSmi mith+Brow own, P PC ▪ BE IN A POSITION OF STRENGTH withum. m.com om

DE L INQUE NT PAYROL L T AXE S  Re visions to VCSP:  Applic a tion will be re vise d to instruc t e mploye rs to provide worke r ide ntific a tion numbe r.  IRS will use ide ntific a tion numbe r to e va lua te e lig ibility a nd c omplia nc e with the VCSP.  IRS to imple me nt re porting c a pa bilitie s for the Re porting Complia nc e Ca se Ma na g e me nt Syste m to a llow for sing le inve ntory syste m.  IRS de ve lope d a nd imple me nte d inte rna l proc e dure s to e nsure tha t VCSP inve ntory is a c c ura te ly input a nd a g re e me nts a re tra nsfe rre d to a ppropria te IRS busine ss unit. 16 WithumS mSmi mith+Brow own, P PC ▪ BE IN A POSITION OF STRENGTH withum. m.com om

ST AT E UPDAT E 17 WithumS mSmi mith+Brow own, P PC ▪ BE IN A POSITION OF STRENGTH withum. m.com om

E CONOMIC OPPORT UNIT Y ACT OF 2014  Change s to many tax inc e ntive s in or de r to de ve lop NJ.  Change s to Gr ow NJ tax c r e dits.  T ax c r e dit pr ogr am for r e de ve lope r s donating public infr astr uc tur e .  Ne w limits on sale s tax c r e dits.  E RG Pr ogr am c hange s. 18 WithumS mSmi mith+Brow own, P PC ▪ BE IN A POSITION OF STRENGTH withum. m.com om

NJ HOSPIT AL F INANCIAL T RANSPARE NCY Have no similar disclosure requirements. New Jersey Hospital Disclosure and Public Resource Protection Act passed by the Senate and General Assembly in March of 2012. Vetoed by Governor Christie in August of 2012. State Health Commissioner 6 months to study the issue. 19 WithumS mSmi mith+Brow own, P PC ▪ BE IN A POSITION OF STRENGTH withum. m.com om

NJ HOSPIT AL F INANCIAL T RANSPARE NCY  T he e mphasis of the Re por t is on the tr anspar e nc y, or lac k the r e of, that for - pr ofit hospitals we r e be ing r e quir e d to r e por t with r e spe c t to financ ial r e por ting, thus r aising c onc e r ns about the ir financ ial viability and the pote ntial impac t that the ir financ ial he alth c ould have on the c ost of, ac c e ss to, and quality of he althc ar e . 20 WithumS mSmi mith+Brow own, P PC ▪ BE IN A POSITION OF STRENGTH withum. m.com om

NJ HOSPIT AL F INANCIAL T RANSPARE NCY Re por t Re c omme ndations: Audited financial statements provided to Department, conspicuously published on hospital’s website within 180 days of close of hospital’s fiscal year. Quarterly Unaudited Financial Statements ; provided to Department within 45 days of end of quarter and made public on hospital’s website within 60 days of end of quarter. 21 WithumS mSmi mith+Brow own, P PC ▪ BE IN A POSITION OF STRENGTH withum. m.com om