At least one hospital had lost its tax exempt status for failing to comply with Section 501(r). The Organization that had its exempt status under Section 501(c)(3) revoked was a dual status organization, meaning that it was exempt both under Section 501(c)(3) and also because it qualified as a governmental unit or agency.

The IRS determined that the Organizations exempt status under Section 501(c)(3) should be revoked because the Organization failed to adopt an implementation strategy for its CHNA and failed to make its CHNA widely available to the public. With respect to the failure to adopt an implementation strategy, the Organization apparently prepared an implementation strategy report and acted on some of the report's recommendations, but the Organization never formally adopted and implemented the report. With respect to the failure to make its CHNA widely available to the public, the Organization had a paper copy available upon request but did not publish the CHNA on its website.

The IRS concluded that the Organizations failures to comply with Section 501(r) were not minor but were both egregious and willful and that its exempt status under Section 501(c)(3) should be revoked. Its conclusion that the failures were willful was based, at least in part, on statements by the Organization.

• Discuss what steps other tax-exempt hospitals should take to avoid losing their tax-exemption.