The House Ways and Means Committee released a discussion draft on May 12, 2026 proposing new information reporting requirements for tax-exempt hospitals described under Internal Revenue Code (IRC) Section 501(r)(2). The draft would amend IRC Section 6033 to significantly expand the annual Form 990 reporting obligations for these organizations to include new categories. If enacted, the provisions would apply to taxable years beginning six months after the date of enactment.
Proposed Additional Reporting Requirements
The discussion draft would require tax-exempt hospital organizations described in Section 501(r)(2) to report the following additional information on Form 990:
- CMS certification numbers: The CMS (Centers for Medicare and Medicaid Services) certification number for the organization and for each hospital facility it operates.
- Detailed spending categories: The annual spend on:
- Community benefits
- Charity care
- Advertising
- Quality improvements
- Nonclinical programming.
- Hypothetical tax liability: The amount of tax that would be imposed if the organization were not tax-exempt.
- Subsidized health service lines: A description of each subsidized health service line, including revenue and expenses of each health service line as reported to CMS.
- Community health needs assessment priorities: The three highest-priority health needs identified in the needs assessment and the amount spent on each during the taxable year.
- Financial assistance activity: The number of financial assistance applications received, granted, and denied during the taxable year.
- Section 340B program reporting: The following must be reported by hospitals that are covered entities under Section 340B(a)(4) of the Public Health Service Act:
- The total number of individuals receiving covered outpatient drugs subject to the Section 340B agreement; and
- The aggregate net revenues and expenses associated with administering the Section 340B drug program.
The discussion draft also includes placeholders for definitions of key terms related to the spending categories listed above, which would further clarify the scope of the new reporting requirements.
BDO Insight
The proposed rules would layer onto the already heightened scrutiny tax-exempt hospitals have faced in recent years regarding whether they provide sufficient community benefits to justify tax-exempt status (for related coverage, see Considerations for Nonprofits, Healthcare Entities, and State and Local Governments following President Trump’s March 4, 2025, Address and Reconciliation Tax Bill Has Major Implications for Healthcare Industry).
Organizations should evaluate their current capacity to collect, validate, and report the data required under the discussion draft. Hospitals that already track some of this information should assess the incremental administrative burden associated with the proposed requirements and consider what systems, processes, or governance updates may be needed if this or similar legislation moves forward.
As the proposals are still in draft form, they could change should lawmakers put forward other measures so staying current on developments as the measures move through the legislative process is critical.
Please visit BDO’s Nonprofit Tax Services pages for more information on how BDO can help.