Internal Revenue Bulletin 2013-21 (PDF rendition): IRS Revenue Procedures

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Bulletin No. 201
3-21
May 20, 2013
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
INCOME TAX
Notice 2013–30, page 1099.
This notice provides a 3-month extension of time to file and
pay tax under sections 6081 and 6161 of the Code for those
individuals affected by the Boston Marathon explosions.
Notice 2013–31, page 1099.
This notice provides adjustments to the limitation on housing
expenses for purposes of section 911 of the Code for specific
locations for 2013. These adjustments are made on the basis
of geographic differences in housing costs relative to hous-
ing costs in the United States. Notices 2006–87, 2007–25,
2007–77, 2008–107, 2010–27, 2011–8, and 2012–19 su-
perseded.
Rev. Proc. 2013–25, page 1110.
This revenue procedure provides the 2014 inflation adjusted
amounts for Health Savings Accounts (HSAs) under section
223 of the Code.
EXEMPT ORGANIZATIONS
REG–106499–12, page 1111.
These proposed regulations provide guidance to charitable
hospital organizations on the community health needs as-
sessment requirements, and related excise tax and reporting
obligations, enacted as part of the Patient Protection and
Affordable Care Act of 2010. These proposed regulations also
clarify the consequences for failing to meet these and other
requirements for charitable hospital organizations. Notice
2011–52 is obsolete after October 5, 2013.
Announcement 2013–31, page 1135.
The IRS has revoked its determination that 21st Century Animal
Resource & Education Services of Dolan Springs, AZ, Books for
People of Yuma, AZ, California Nairobi International Childrens
Organization of Fresno, CA, Cape Verdean Club of Falmouth
Inc. of Teaticket, MA, Congressional District Programs, Inc. of
Falls Church, VA, Dr. R.C. Samanta Roy Institute of Science and
Technology, Inc. of Green Bay, WI, Eko Club, Inc. of Houston,
TX, Everything Must Change, Inc. of Philadelphia, PA, Excalibur
Foundation of Sparks, NV, Functional Social Solutions, Inc. of
Long Beach, CA, Gateway Educational Services of Honolulu,
HI, Good Housing, Inc. of Merrick, NY, Holland Peck Charitable
Foundation of Carefree, AZ, Kona University, Inc. of Honolulu,
HI, Lakeland-Winter Haven Kennel Club, Inc. of Lakeland, FL,
Life Changes Ministries International Inc. of Fort Mill, SC, Mar-
ley Fund of Greenville, NC, and Needham Community Theatre,
Inc. of Needham, MA, qualify as organizations described in
sections 501(c)(3) and 170(c)(2) of the Code.
ADMINISTRATIVE
Announcement 2013–30, page 1134.
This announcement provides that for payments due in 2013, a
2012-2013 fiscal year partnership should pay withholding tax
under section 1446 on effectively connected taxable income
allocable to foreign individual partners at the rates in effect in
2012.
Finding Lists begin on page ii.

The IRS Mission
Provide Americ
a’s taxpayers top-quality service by helping
them understa
nd and meet their tax responsibilities and en-
force the law wi
th integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly.
It is the poli
cy of the Service to publish in the Bulletin all sub-
stantive ru
lings necessary to promote a uniform application of
the tax laws
, including all rulings that supersede, revoke, mod-
ify, or amen
d any of those previously published in the Bulletin.
All publish
ed rulings apply retroactively unless otherwise indi-
cated. Pro
cedures relating solely to matters of internal man-
agement ar
e not published; however, statements of internal
practices
and procedures that affect the rights and duties of
taxpayers
are published.
Revenue rulings represent the conclusions of the Service on the
application of the law to the pivotal facts stated in the revenue
ruling. In those based on positions taken in rulings to taxpayers
or technical advice to Service field offices, identifying details
and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions of
the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B, Leg-
islation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Secre-
tary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The cont
ents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
May 20, 20132013–21 I.R.B.

Part III. Administrative, Procedural, and Miscellaneous
Filing and Payment Extension
for Those Affected by the
Boston Marathon Explosions
Notice 2013–30
This notice provides a 3-month exten-
sion of time to file and pay tax under sec-
tions 6081 and 6161 of the Code (Code) for
those individuals affected by the Boston
Marathon explosions.
BACKGROUND
Generally, the Code requires individu-
als to file their individual income tax re-
turns and pay tax on or before April 15
th
(or the next succeeding day that is not a
Saturday, Sunday, or legal holiday). Secs.
6072(a), 6151(a) and 7503. Section 6651
of the Code imposes an addition to tax
when a taxpayer does not file a return or
pay the tax shown on the return by the ex-
tended due date for filing a return or pay-
ment of tax.
Section 6081(a) of the Code authorizes
the Secretary to grant an extension of time
to file any return. Such extension may not
exceed 6 months. Section 6161(a) of the
Code authorizes the Secretary to extend
the time to pay tax. Such extension gen-
erally may not exceed 6 months. Interest,
however, will apply on any amounts paid
after the date that the tax was due without
regard to the extension. Sec. 6601(b).
On April 15, 2013, two explosive
devices were detonated in Boston, Massa-
chusetts near the finish line of the Boston
Marathon (the Boston Marathon explo-
sions). The resulting explosions injured
hundreds of individuals, some fatally,
who were participating in, or watching,
the Boston Marathon or who were in the
general vicinity of the race’s finish line.
Several streets and offices in the Boston
area remained closed after the explosions
for law enforcement to investigate the ex-
plosions and pursue suspects, disrupting
business activity in the area and poten-
tially the ability of some taxpayers and
return preparers to access their files.
RELIEF FOR THOSE AFFECTED
BY THE BOSTON MARATHON
EXPLOSIONS
The Internal Revenue Service (Service)
is granting an extension of time to file 2012
tax returns and pay any tax due on those re-
turns until July 15, 2013, to those affected
by the Boston Marathon explosions. The
Service will not impose an addition to tax
for late filing or payment on these individ-
uals provided they file their tax returns and
pay any tax due by July 15, 2013, regard-
less of whether the individual requested an
extensionoftimetofileonorbeforeApril
15, 2013. By law, however, interest will
apply to any payments made after the April
due date for payment.
This relief applies to all individuals who
live in Suffolk County, Massachusetts, in-
cluding the city of Boston, victims of the
explosions, their families, first responders,
others impacted by the tragedy who live
outside of Suffolk County, and taxpayers
whose tax return preparers were adversely
affected. The Service will automatically
provide this relief to any individual living
in Suffolk County. Eligible taxpayers liv-
ing outside Suffolk County can claim this
relief by calling 1–866–562–5227 starting
Tuesday, April 23, and identifying them-
selves to the Service before filing a re-
turn or making a payment. Eligible tax-
payers who receive notices requesting the
payment of additions to tax for late fil-
ing or payment from the Service can call
this number to have these additions to tax
abated. Taxpayers affected by the events
surrounding the Boston Marathon explo-
sion with a filing or payment requirement
other than an individual income tax re-
quirement (Form 1040 series requirement)
from April 15, 2013 to April 19, 2013,
inclusive, also may receive relief. These
taxpayers should call 1–866–562–5227 if
they receive a notice requesting the pay-
ment of additions to tax for late filing or
payment to have these additions abated.
Individual taxpayers eligible for this re-
lief who need more time to file their re-
turns may receive an additional extension
of time to file their returns to October 15,
2013, by filing Form 4868,Application for
Automatic Extension of Time to File U.S.
Individual Income Tax Return,byJuly15,
2013. This additional extension of time to
file will not further extend the time for pay-
ment of tax. Forms, instructions, and other
tax assistance are available on IRS.gov.
The IRS toll-free number for general tax
questions is 1–800–829–1040.
CONTACT INFORMATION
The principal author of this no-
tice is Mary E. Keys of the Office of
Associate Chief Counsel (Procedure &
Administration). For further information
regarding this notice, contact Ms. Keys at
(202) 622–4570 (not a toll-free call).
Determination of Housing Cost
Amount Eligible for Exclusion
or Deduction for 2013
Notice 2013–31
SECTION 1. PURPOSE
This
notice provides adjustments to the
limi
tation on housing expenses for pur-
pose
s of section 911 of the Internal Rev-
enu
eCode(Code)forspecificlocationsfor
201
3. These adjustments are made on the
bas
is of geographic differences in housing
cos
ts relative to housing costs in the United
Sta
tes.
SECTION 2. BACKGROUND
Section 911(a) of the Code allows a
qualified individual to elect to exclude
from gross income the foreign earned in-
come and housing cost amount of such
individual. Section 911(c)(1) defines the
term “housing cost amount” as an amount
equal to the excess of (A) the housing
expenses of an individual for the taxable
year to the extent such expenses do not
exceed the amount determined under sec-
tion 911(c)(2), over (B) 16 percent of the
exclusion amount (computed on a daily
basis) in effect under section 911(b)(2)(D)
for the calendar year in which such taxable
year begins ($267.40 per day for 2013, or
$97,600 for the full year), multiplied by
the number of days of that taxable year
within the applicable period described in
section 911(d)(1). The applicable period
is the period during which the individual
meets the tax home requirement of section
2013–21 I.R.B.1099May 20, 2013

911(d)(1) and either the bona fide resi-
dence requirement of section 911(d)(1)(A)
or the physical presence requirement of
section 911(d)(1)(B). Assuming that the
entire taxable year of a qualified individ-
ual is within the applicable period, the
section 911(c)(1)(B) amount for 2013 is
$15,616 ($97,600 x .16).
Section 911(c)(2)(A) of the Code lim-
its the housing expenses taken into account
in section 911(c)(1)(A) to an amount equal
to (i) 30 percent (adjusted as may be pro-
vided under the Secretary’s authority un-
der section 911(c)(2)(B)) of the amount
(computed on a daily basis) in effect un-
der section 911(b)(2)(D) for the calendar
year in which the taxable year of the indi-
vidual begins, multiplied by (ii) the num-
ber of days of that taxable year within the
applicable period described in section 911
(d)(1). Thus, under this general limita-
tion, a qualified individual whose entire
taxable year is within the applicable period
is limited to maximum housing expenses
of $29,280 ($97,600 x .30) in 2013.
Section 911(c)(2)(B) of the Code au-
thorizes the Secretary to issue regulations
or other guidance to adjust the percentage
under section 911(c)(2)(A)(i) based on
geographic differences in housing costs
relative to housing costs in the United
States. Pursuant to this authority, the
Internal Revenue Service (IRS) and the
Treasury Department published Notice
2006–87, 2006–2 C.B. 766, and Notice
2007–25, 2007–1 C.B. 760, for 2006; No-
tice 2007–77, 2007–2 C.B. 735, for 2007;
Notice 2008–107, 2008–2 C.B. 1266, for
2008 and 2009; Notice 2010–27, 2010–15
I.R.B. 531, for 2009 and 2010; Notice
2011–8, 2011–8 I.R.B. 503, for 2010
and 2011; and Notice 2012–19, 2012–10
I.R.B. 440, for 2012 and 2013 to provide
adjustments to the limitation on housing
expenses for qualified individuals incur-
ring housing expenses in countries with
high housing costs relative to housing
costs in the United States.
SECTION 3. TABLE OF ADJUSTED
LIMITATIONS FOR 2013
The following table provides adjusted
limitations on housing expenses (in lieu
of the otherwise applicable limitation of
$29,280) for 2013.
CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
AngolaLuanda230.1484,000
ArgentinaBuenos Aires
154.7956,500
AustraliaAdelaide96.44
35,200
AustraliaBrisbane
95.34
34,800
AustraliaCanberra83.8430,600
AustraliaDarwin, Northern Country83.8430,600
AustraliaGold Coast
95.34
34,800
AustraliaMelbourne122.1944,600
AustraliaOakey
95.34
34,800
AustraliaPerth130.6847,700
AustraliaSydney89.8132,782
AustraliaToowoomba
95.34
34,800
AustriaVienna96.99
35,400
Bahamas, TheGrand Bahama Island84.6630,900
Bahamas, TheNassau136.1649,700
BahrainBahrain
120.55
44,000
BarbadosBarbados103.2937,700
BelgiumAntwerp96.16
35,100
BelgiumBrussels128.7747,000
BelgiumGosselies
115.34
42,100
BelgiumHoogbuul96.16
35,100
BelgiumMons
115.34
42,100
BelgiumSHAPE/Chievres
115.34
42,100
BermudaBermuda
246.58
90,000
May 20, 201311002013–21 I.R.B.

CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
Bosnia-HerzegovinaSarajevo82.1930,000
BrazilBrasilia126.0346,000
BrazilRio de Janeiro96.16
35,100
BrazilSao Paulo
155.0756,600
CanadaCalgary129.8647,400
CanadaDartmouth
107.95
39,400
CanadaEdmonton103.2937,700
CanadaHalifax
107.95
39,400
CanadaLondon, Ontario88.2232,200
CanadaMontreal166.0360,600
CanadaOttawa148.49
54,200
CanadaQuebec126.0346,000
CanadaToronto
153.9756,200
CanadaVancouver136.7149,900
CanadaVictoria
97.5335,600
CanadaWinnipeg
93.15
34,000
Cayman IslandsGrand Cayman
131.51
48,000
ChileSantiago
153.7056,100
ChinaBeijing
195.07
71,200
ChinaHong Kong
313.15
114,300
ChinaShanghai
156.1757,001
ColombiaBogota160.82
58,700
ColombiaAll cities other than Bogota
135.34
49,400
Costa RicaSan Jose87.6732,000
DenmarkCopenhagen119.7443,704
Dominican RepublicSanto Domingo124.66
45,500
EcuadorGuayaquil84.3830,800
EcuadorQuito89.3232,600
EstoniaTallinn127.6746,600
FranceGarches226.03
82,500
FranceLe Havre91.2333,300
FranceLyon127.1246,400
FranceMarseille121.92
44,500
FranceMontpellier102.4737,400
FranceParis226.03
82,500
FranceSevres226.03
82,500
FranceSuresnes226.03
82,500
FranceVersailles226.03
82,500
2013–21 I.R.B.1101May 20, 2013

CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
GermanyBabenhausen110.96
40,500
GermanyBad Aibling
94.5234,500
GermanyBad Nauheim88.7732,400
GermanyBaumholder107.4039,200
GermanyBerlin
135.34
49,400
GermanyBirkenfeld107.4039,200
GermanyBoeblingen
134.52
49,100
GermanyBonn
115.07
42,000
GermanyButzbach
86.58
31,600
GermanyCologne
153.9756,200
GermanyDarmstadt110.96
40,500
GermanyFrankfurt am Main
115.62
42,200
GermanyFriedberg88.7732,400
GermanyGarmisch-Partenkirchen102.4737,400
GermanyGelnhausen139.73
51,000
GermanyGermersheim83.8430,600
GermanyGiebelstadt
95.8935,000
GermanyGiessen98.6336,000
GermanyGrafenwoehr110.4140,300
GermanyHanau139.73
51,000
GermanyHannover82.7430,200
GermanyHeidelberg
103.56
37,800
GermanyIdar-Oberstein107.4039,200
GermanyIngolstadt
156.1657,000
GermanyKaiserslautern, Landkreis133.7048,800
GermanyKitzingen
95.8935,000
GermanyLeimen
103.56
37,800
GermanyLudwigsburg
134.52
49,100
GermanyMainz149.86
54,700
GermanyMannheim
103.56
37,800
GermanyMunich
156.1657,000
GermanyNellingen
134.52
49,100
GermanyNeubruecke107.4039,200
GermanyOber Ramstadt110.96
40,500
GermanyOberammergau102.4737,400
GermanyPirmasens133.7048,800
GermanyRheinau
103.56
37,800
GermanySchwetzingen
103.56
37,800
May 20, 201311022013–21 I.R.B.

CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
GermanySeckenheim
103.56
37,800
GermanySembach133.7048,800
GermanyStuttgart
134.52
49,100
GermanyVilseck110.4140,300
GermanyWahn
115.07
42,000
GermanyWertheim
95.8935,000
GermanyWiesbaden149.86
54,700
GermanyWuerzburg
95.8935,000
GermanyZweibrueken133.7048,800
GermanyAll cities other than Augsburg,
Babenhausen, Bad Aibling, Bad Kreuznach,
Bad Nauheim, Baumholder, Berchtesgaden,
Berlin, Birkenfeld, Boeblingen, Bonn,
Bremen, Bremerhaven, Butzbach, Cologne,
Darmstadt, Delmenhorst, Duesseldorf,
Erlangen, Flensburg, Frankfurt am
Main, Friedberg, Fuerth, Garlstedt,
Garmisch-Partenkirchen, Geilenkirchen,
Gelnhausen, Germersheim, Giebelstadt,
Giessen, Grafenwoehr, Grefrath, Greven,
Gruenstadt, Hamburg, Hanau, Handorf,
Hannover, Heidelberg, Heilbronn,
Herongen, Idar-Oberstein, Ingolstadt,
Kaiserslautern, Landkreis, Kalkar,
Karlsruhe, Kerpen, Kitzingen, Koblenz,
Leimen, Leipzig, Ludwigsburg, Mainz,
Mannheim, Mayen, Moenchen-Gladbach,
Muenster, Munich, Nellingen, Neubruecke,
Noervenich, Nuernberg, Ober Ramstadt,
Oberammergau, Osterholz-Scharmbeck,
Pirmasens, Rheinau, Rheinberg,
Schwabach, Schwetzingen, Seckenheim,
Sembach,Stuttgart,Twisteden, Vilseck,
Wahn, Wertheim, Wiesbaden, Worms,
Wuerzburg, Zirndorf and Zweibrueken
108.7739,700
GhanaAccra98.6336,000
GreeceArgyroupolis86.30
31,500
GreeceAthens110.6840,400
GreeceElefsis110.6840,400
GreeceEllinikon110.6840,400
GreeceMt. Hortiatis86.30
31,500
GreeceMt. Parnis110.6840,400
GreeceMt. Pateras110.6840,400
GreeceNea Makri110.6840,400
GreecePerivolaki86.30
31,500
GreecePiraeus110.6840,400
2013–21 I.R.B.1103May 20, 2013

CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
GreeceTanagra110.6840,400
GreeceThessaloniki86.30
31,500
GuatemalaGuatemala City113.70
41,500
GuyanaGeorgetown
95.8935,000
Holy See, TheHoly See, The
150.4154,900
HungaryBudapest89.04
32,500
HungaryPapá121.92
44,500
IndiaMumbai186.0867,920
IndiaNew Delhi82.88
30,252
IndonesiaJakarta
103.50
37,776
IrelandDublin130.9647,800
IrelandShannon Area
103.56
37,800
IsraelTel Aviv139.18
50,800
ItalyCatania88.2232,200
ItalyGenoa
114.52
41,800
ItalyGioia Tauro
85.48
31,200
ItalyLa Spezia110.6840,400
ItalyLeghorn
94.25
34,400
ItalyMilan224.9382,100
ItalyNaples143.01
52,200
ItalyParma
114.25
41,700
ItalyPisa
94.25
34,400
ItalyPordenone-Aviano
114.25
41,700
ItalyRome
150.4154,900
ItalySigonella88.2232,200
ItalyTurin112.6041,100
ItalyVicenza
115.34
42,100
ItalyAll cities other than Avellino, Brindisi,
Catania, Florence, Gaeta, Genoa, Gioia
Tauro, La Spezia, Leghorn, Milan, Mount
Vergine, Naples, Nettuno, Parma, Pisa,
Pordenone-Aviano, Rome, Sardinia,
Sigonella, Turin, Verona, and Vicenza.
92.05
33,600
JamaicaKingston112.8841,200
JapanAkashi107.1239,100
JapanAkizuki
94.25
34,400
JapanAtsugi139.73
51,000
JapanCamp Zama139.73
51,000
JapanChiba-Ken
150.9655,100
JapanFussa139.73
51,000
May 20, 201311042013–21 I.R.B.

CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
JapanGifu
203.56
74,300
JapanGotemba102.1937,300
JapanHaneda139.73
51,000
JapanIwakuni
107.95
39,400
JapanKanagawa-Ken139.73
51,000
JapanKomaki
203.56
74,300
JapanMachidi-Shi139.73
51,000
JapanMisawa116.1642,400
JapanNagoya
203.56
74,300
JapanOkinawa Prefecture188.2268,700
JapanOsaka-Kobe248.3990,664
JapanSagamihara139.73
51,000
JapanSaitama-Ken139.73
51,000
JapanSasebo
115.89
42,300
JapanTachikawa139.73
51,000
JapanTokyo320.82117,100
JapanTokyo-to139.73
51,000
JapanYokohama
175.89
64,200
JapanYokosuka163.01
59,500
JapanYokota139.73
51,000
KazakhstanAlmaty
131.51
48,000
KoreaAmmo Depot #981.1029,600
KoreaCamp Carroll88.7732,400
KoreaCamp Colbern
153.4256,000
KoreaCamp Market
153.4256,000
KoreaCamp Mercer
153.4256,000
KoreaChinhae82.1930,000
KoreaK–16
153.4256,000
KoreaKimhae83.8430,600
KoreaKimpo Airfield
153.4256,000
KoreaMunsan
94.25
34,400
KoreaOsan AB96.71
35,300
KoreaPusan83.8430,600
KoreaPyongtaek96.16
35,100
KoreaSeoul
153.4256,000
KoreaSuwon
153.4256,000
KoreaTaegu
92.05
33,600
KoreaTongduchon87.4031,900
2013–21 I.R.B.1105May 20, 2013

CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
KoreaUijongbu90.9633,200
KoreaWaegwan88.7732,400
KoreaAll cities other than Ammo Depot #9, Camp
Carroll, Camp Colbern, Camp Market,
Camp Mercer, Changwon, Chinhae,
Chunchon, K–16, Kimhae, Kimpo Airfield,
Kunsun, Kwangju, Munsan, Osan AB,
Pusan, Pyongtaek, Seoul, Suwon, Taegu,
Tongduchon, Uijongbu, and Waegwan
88.7732,400
KuwaitKuwait City176.4464,400
KuwaitAll cities other than Kuwait City
158.0857,700
LuxembourgLuxembourg
123.5645,100
MacedoniaSkopje96.99
35,400
MalaysiaKuala Lumpur
126.58
46,200
MalaysiaAll cities other than Kuala Lumpur92.3333,700
MexicoMalta138.36
50,500
MexicoMazatlan84.9331,000
MexicoMerida103.8437,900
MexicoMexico City131.2347,900
MexicoMonterrey90.9633,200
MexicoAll cities other than Ciudad Juarez,
Cuernavaca, Guadalajara, Hermosillo,
Matamoros, Mazatlan, Merida, Metapa,
Mexico City, Monterrey, Nogales, Nuevo
Laredo, Reynosa, Tapachula, Tijuana,
Tuxtla Gutierrez, and Veracruz
107.95
39,400
MozambiqueMaputo108.22
39,500
NamibiaWindhoek
87.95
32,100
NetherlandsAmsterdam144.93
52,900
NetherlandsAruba98.6336,000
NetherlandsBrunssum106.3038,800
NetherlandsEygelshoven106.3038,800
NetherlandsHague, The
179.4565,500
NetherlandsHeerlen106.3038,800
NetherlandsHoensbroek106.3038,800
NetherlandsHulsberg106.3038,800
NetherlandsKerkrade106.3038,800
NetherlandsLandgraaf106.3038,800
NetherlandsMaastricht106.3038,800
NetherlandsPapendrecht108.22
39,500
NetherlandsRotterdam108.22
39,500
NetherlandsSchaesburg106.3038,800
May 20, 201311062013–21 I.R.B.

CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
NetherlandsSchinnen106.3038,800
NetherlandsSchiphol144.93
52,900
NetherlandsYpenburg
179.4565,500
NetherlandsAll cities other than Amsterdam, Aruba,
Brunssum, Coevorden, Eygelshoven,
The Hague, Heerlen, Hoensbroek,
Hulsberg, Kerkrade, Landgraaf, Maastricht,
Margraten, Papendrecht, Rotterdam,
Schaesburg, Schinnen, Schiphol, and
Ypenburg.
108.22
39,500
Netherlands AntillesCuracao
125.4845,800
New ZealandAuckland97.81
35,700
New ZealandChristchurch
87.95
32,100
New ZealandWellington92.6033,800
NicaraguaManagua87.1231,800
NigeriaAbuja98.6336,000
NorwayOslo147.40
53,800
NorwayStavanger
125.2145,700
NorwayAll cities other than Oslo and Stavanger.103.2937,700
PanamaPanama City97.26
35,500
PeruLima107.1239,100
PhilippinesCavite
106.85
39,000
PhilippinesManila
106.85
39,000
PolandPoland
80.55
29,400
PortugalAlverca137.81
50,300
PortugalLisbon137.81
50,300
QatarDoha
99.35
36,264
QatarAll cities other than Doha88.7732,400
RussiaMoscow
295.89
108,000
RussiaSaint Petersburg164.3860,000
RussiaSakhalin Island212.33
77,500
RussiaVladivostok212.33
77,500
RussiaYekaterinburg129.8647,400
RwandaKigali86.30
31,500
Saudi ArabiaJeddah84.0230,667
Saudi ArabiaRiyadh
109.59
40,000
SingaporeSingapore246.0389,800
South AfricaPretoria107.6739,300
SpainBarcelona111.2340,600
SpainMadrid
183.56
67,000
2013–21 I.R.B.1107May 20, 2013

CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
SpainRota
112.05
40,900
SpainValencia
105.4838,500
SurinameParamaribo90.4133,000
SwitzerlandBern193.7070,700
SwitzerlandGeneva269.3298,300
SwitzerlandZurich
107.45
39,219
SwitzerlandAll cities other than Bern, Geneva and
Zurich
90.1432,900
TaiwanTaipei
126.54
46,188
TanzaniaDar Es Salaam
120.55
44,000
ThailandBangkok161.64
59,000
Trinidad and TobagoPort of Spain149.32
54,500
TurkeyIzmir-Cigli
86.58
31,600
TurkeyYamanlar
86.58
31,600
UkraineKiev197.2672,000
United Arab EmiratesAbu Dhabi136.1349,687
United Arab EmiratesDubai
156.6457,174
United KingdomBasingstoke112.6041,099
United KingdomBath112.3341,000
United KingdomBracknell170.1462,100
United KingdomBristol106.0338,700
United KingdomBrookwood
120.55
44,000
United KingdomCambridge117.8143,000
United KingdomCaversham202.1973,800
United KingdomCheltenham146.03
53,300
United KingdomCroughton122.7444,800
United KingdomFairford122.7444,800
United KingdomFarnborough149.86
54,700
United KingdomFelixstowe
115.62
42,200
United KingdomGibraltar122.2444,616
United KingdomHarrogate129.0447,100
United KingdomHigh Wycombe170.1462,100
United KingdomKemble122.7444,800
United KingdomLakenheath
152.0555,500
United KingdomLiverpool106.3038,800
United KingdomLondon241.6488,200
United KingdomLoudwater173.97
63,500
United KingdomMenwith Hill129.0447,100
United KingdomMildenhall
152.0555,500
May 20, 201311082013–21 I.R.B.

CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
United KingdomOxfordshire
119.45
43,600
United KingdomPlymouth
119.45
43,600
United KingdomPortsmouth
119.45
43,600
United KingdomReading170.1462,100
United KingdomRochester124.66
45,500
United KingdomSamlesbury
120.55
44,000
United KingdomSouthampton121.1044,200
United KingdomSurrey132.6148,402
United KingdomWaterbeach124.11
45,300
United KingdomWiltshire113.9741,600
United KingdomAll cities other than Basingstoke,
Bath, Belfast, Birmingham, Bracknell,
Bristol, Brookwood, Brough, Cambridge,
Caversham, Chelmsford, Cheltenham,
Chicksands, Croughton, Dunstable,
Edinburgh, Edzell, Fairford, Farnborough,
Felixstowe, Ft. Halstead, Gibraltar,
Glenrothes, Greenham Common,
Harrogate, High Wycombe, Hythe,
Kemble, Lakenheath, Liverpool, London,
Loudwater, Menwith Hill, Mildenhall,
Nottingham, Oxfordshire, Plymouth,
Portsmouth, Reading, Rochester,
Samlesbury, Southampton, Surrey,
Waterbeach, Welford, West Byfleet, and
Wiltshire.
120.55
44,000
VenezuelaCaracas
156.1657,000
VietnamHanoi128.2246,800
VietnamHo Chi Minh City
115.07
42,000
SECTION 4. ELECTION TO APPLY
2013 ADJUSTED LIMITATIONS TO
2012 TAXABLE YEAR
For some locations, the limitation on
housing expenses provided in section 3 of
this notice may be higher than the limita-
tion on housing expenses provided in the
“Table of Adjusted Limitations for 2012”
in Notice 2012–19. A qualified individ-
ual incurring housing expenses in such a
location during 2012 may apply the ad-
justed limitation on housing expenses pro-
videdinsection3ofthisnoticeinlieu
of the amounts provided in the “Table of
Adjusted Limitations for 2012” in Notice
2012–19 (and as set forth in the Instruc-
tions to Form 2555 (2012)).
The IRS and the Treasury Department
anticipate that future annual notices pro-
viding adjustments to housing expense
limitations will make a similar election
available to qualified individuals that incur
housing expenses in the immediately pre-
ceding year. For example, when adjusted
housing expense limitations for 2014 are
issued, it is expected that taxpayers will
be permitted to apply those adjusted limi-
tations to the 2013 taxable year.
SECTION 5. EFFECT ON OTHER
DOCUMENTS
This notice supersedes Notice 2006–87,
2006–2 C.B. 766; Notice 2007–25,
2007–1 C.B. 760; Notice 2007–77;
2007–2 C.B. 735; Notice 2008–107,
2008–2 C.B. 1266; Notice 2010–27,
2010–15 I.R.B. 531; Notice 2011–8,
2011–8 I.R.B. 503; and Notice 2012–19,
2012–10 I.R.B. 440.
SECTION 6. EFFECTIVE DATE
This notice is effective for taxable years
beginning on or after January 1, 2013.
However, as provided in section 4, a tax-
payer may elect to apply the 2013 adjusted
housing limitations contained in section 3
of this notice to his or her taxable year be-
ginning in 2012.
DRAFTING INFORMATION
The principal author of this notice is
Susan E. Massey of the Office of Associate
Chief Counsel (International). For further
2013–21 I.R.B.1109May 20, 2013

information regarding this notice contact
Ms. Massey at (202) 622–3840 (not a
toll-free call).
26 CFR 601.602: Tax forms and instructions.
(Also: Part 1, §§ 1, 223.)
Rev. Proc. 2013–25
SECTION 1. PURPOSE
This revenue procedure provides the
2014 inflation adjusted amounts for Health
Savings Accounts (HSAs) as determined
under § 223 of the Internal Revenue Code.
SECTION 2. 2014 INFLATION
ADJUSTED ITEMS
Annual contribution limitation. For cal-
endar year 2014, the annual limitation on
deductions under § 223(b)(2)(A) for an in-
dividual with self-only coverage under a
high deductible health plan is $3,300. For
calendar year 2014, the annual limitation
on deductions under § 223(b)(2)(B) for an
individual with family coverage under a
high deductible health plan is $6,550.
High deductible health plan. For cal-
endar year 2014, a “high deductible health
plan” is defined under § 223(c)(2)(A) as
a health plan with an annual deductible
that is not less than $1,250 for self-only
coverage or $2,500 for family coverage,
and the annual out-of-pocket expenses
(deductibles, co-payments, and other
amounts, but not premiums) do not exceed
$6,350 for self-only coverage or $12,700
for family coverage.
SECTION 3. EFFECTIVE DATE
This revenue procedure is effective for
calendar year 2014.
SECTION 4. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Bill Ruane of the Office of
Associate Chief Counsel (Income Tax
& Accounting). For further information
regarding § 223 and HSAs, contact
Karen Levin at (202) 622–6080 (not a
toll-free call). For further information
regarding the calculation of the inflation
adjustments in this revenue procedure,
contact Mr. Ruane at (202) 622–4920 (not
a toll-free call).
May 20, 201311102013–21 I.R.B.

Part IV. Items o
fGeneralInterest
Notice of Prop
osed
Rulemaking
Community Hea
lth Needs
Assessments f
or Charitable
Hospitals
REG–106499–12
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: ACTION: Notice of proposed
rulemaking.
SUMMARY: This document contains
proposed regulations that provide guid-
ance to charitable hospital organizations
on the community health needs assess-
ment (CHNA) requirements, and related
excise tax and reporting obligations, en-
acted as part of the Patient Protection
and Affordable Care Act of 2010. These
proposed regulations also clarify the con-
sequences for failing to meet these and
other requirements for charitable hospital
organizations. These regulations will af-
fect charitable hospital organizations.
DATES: Comments and requests for a
public hearing must be received by July 5,
2013.
ADDRESSES: Send submissions to:
CC:PA:LPD:PR (REG–106499–12), room
5203, Internal Revenue Service, PO Box
7604, Ben Franklin Station, Washing-
ton, DC 20044. Submissions may be
hand-delivered Monday through Friday
between the hours of 8 a.m. and 4 p.m.
to CC:PA:LPD:PR (REG–106499–12),
Courier’s Desk, Internal Revenue Ser-
vice, 1111 Constitution Avenue, NW,
Washington, DC, or sent electroni-
cally via the Federal eRulemaking Por-
tal athttp://www.regulations.gov(IRS
REG–106499–12).
FOR FU
RTHER INFORMATION
CONTA
CT: Concerning these pro-
posed
regulations, Amy F. Giuliano
or Pre
ston J. Quesenberry at (202)
622–
6070; concerning submissions of
comm
ents and requests for a public
hear
ing, Oluwafunmilayo Taylor at (202)
622–
7180 (not toll-free numbers).
SUPPLEMENTAR
Y INFORMATION:
Paperwork Red
uction Act
The collectio
n of information con-
tained in this
notice of proposed rule-
making has bee
nsubmittedtotheOffice
of Management
and Budget for review
and approval
under OMB control number
1545–0047, i
n accordance with the Paper-
work Reducti
on Act of 1995 (44 U.S.C.
3507(d)). Co
mments on the collection
of informati
on should be sent to theOf-
fice of Mana
gement and Budget, Attn:
Desk Office
r for the Department of the
Treasury, O
ffice of Information and Reg-
ulatory Aff
airs, Washington, DC 20503,
with copie
stotheInternal Revenue Ser-
vice,Attn
: IRS Reports Clearance Officer,
SE:W:CAR:
MP:T:T:SP, Washington, DC
20224. Com
ments on the collection of
informat
ion should be received by June 4,
2013.
Comments
are specifically requested
concerni
ng:
Whether t
he proposed collection of in-
formatio
n is necessary for the proper per-
formance
of the functions of the Internal
Revenue S
ervice, including whether the
informat
ion will have practical utility;
The accur
acy of the estimated burden
associat
ed with the proposed collection of
informa
tion;
How the q
uality, utility, and clarity of
the info
rmation to be collected may be en-
hanced;
How the b
urden of complying with the
propose
d collection of information may be
minimiz
ed, including through forms of in-
formati
on technology; and
Estimat
es of capital or start-up costs
and cost
s of operation, maintenance, and
purcha
se of services to provide informa-
tion.
The col
lection of information in these
propos
ed regulations is in §1.501(r)–3
and §1.
6033–2(a)(2)(ii)(l). The collec-
tion of
information flows from sections
501(r)
(3) and 6033(b)(15) of the Internal
Reven
ue Code (Code), which require a
hospi
tal organization to conduct a CHNA
and ad
opt an implementation strategy to
meet t
he community health needs identi-
fied t
hrough the CHNA at least once every
thre
e years, report on its annual informa-
tion
return how it is meeting the needs
identified th
rough the CHNA, and attach
to its annual i
nformation return a copy
of its audited
financial statements. The
expected reco
rdkeepers are hospital orga-
nizations des
cribed in sections 501(c)(3)
and 501(r)(2
).
The following
estimates are based on
information
that is available to the IRS and
averaged ove
r a three-year time period, to
reflect the f
act that the information col-
lection gene
rally will be spread over the
statutory t
hree-year cycle during which a
hospital or
ganization is required to con-
duct a CHNA a
nd adopt an implementa-
tion strate
gy. A particular hospital organ-
ization ma
y require more or less time, de-
pending on
the circumstances.
Estimated
number of recordkeepers:
3,377.
Estimated
average annual burden hours
per record
keeper: 80 hours.
Estimated
total annual recordkeeping
burden: 27
0,160 hours.
The burden
for the collection of infor-
mation con
tained in the proposed amend-
ments to §1
.6033–2 will be reflected in the
burden on
Form 990,Return of Organiza-
tion Exem
pt From Income Tax,afteritis
revised t
o require the additional informa-
tion in th
e regulation.
An agency
may not conduct or sponsor,
and a pers
on is not required to respond to, a
collect
ion of information unless it displays
avalidc
ontrol number assigned by the Of-
fice of M
anagement and Budget.
Books or
records relating to a collection
of infor
mation must be retained as long as
their co
ntents may become material in the
adminis
tration of any internal revenue law.
Genera
lly, tax returns and return informa-
tion ar
e confidential, as required by section
6103.
Backgr
ound
The Pat
ient Protection and Afford-
able Ca
re Act, Public Law 111–148 (124
Stat. 1
19 (2010)) (the “Affordable Care
Act”),
enacted section 501(r) of the Code,
which
imposes additional requirements on
chari
table hospital organizations. Section
501(r
)(1) states that a hospital organiza-
tion d
escribed in section 501(r)(2) will not
be tre
ated as a tax-exempt organization
desc
ribed in section 501(c)(3) unless the
orga
nization meets the requirements of
2013–21 I.R.B.1111May 20, 2013

section 501(r)(3) through 501(r)(6). The
Affordable Care Act did not otherwise
affect the substantive standards for tax
exemption that charitable hospital organi-
zations are required to meet under section
501(c)(3).
Section 501(r)(2)(A) defines a hospital
organization as: (i) an organization that
operates a facility required by a state to
be licensed, registered, or similarly rec-
ognized as a hospital; and (ii) any other
organization that the Secretary determines
has the provision of hospital care as its
principal function or purpose constituting
the basis for its exemption under section
501(c)(3).
Section 501(r)(2)(B)(i) requires a hos-
pital organization that operates more than
one hospital facility to meet the require-
ments of section 501(r) separately with
respect to each hospital facility. Section
501(r)(2)(B)(ii) provides that a hospital
organization will not be treated as de-
scribed in section 501(c)(3) with respect to
any hospital facility for which the require-
ments of section 501(r) are not separately
met.
Section 501(r)(3) requires a hospital or-
ganization to conduct a CHNA at least
once every three years and adopt an imple-
mentation strategy to meet the community
health needs identified through the CHNA.
The CHNA must take into account input
from persons who represent the broad in-
terests of the community served by the
hospital facility, including those with spe-
cial knowledge of or expertise in public
health. The CHNA must also be made
widely available to the public.
Section 4959 imposes a $50,000 excise
tax on a hospital organization that fails to
meet the CHNA requirements for any tax-
able year. A hospital organization must re-
port the amount of any excise tax imposed
on it under section 4959 on its annual in-
formation return (that is, Form 990,Return
of Organization Exempt From Income Tax,
and related schedules) pursuant to section
6033(b)(10)(D).
Section 6033(b)(15)(A) requires a hos-
pital organization to report on its Form
990 a description of how the organization
is addressing the needs identified in each
CHNA and a description of any needs that
are not being addressed together with the
reasons why the needs are not being ad-
dressed.
Section 6033(b)(15)(B) requires a hos-
pital organization to file with its Form 990
a copy of its audited financial statements
(or, in the case of an organization the fi-
nancial statements of which are included
in consolidated financial statements with
other organizations, its consolidated finan-
cial statements).
Notice 2010–39
In May 2010, the Department of the
Treasury (“Treasury Department”) and
the IRS issued Notice 2010–39, 2010–24
I.R.B. 756 (May 27, 2010), which solicited
comments regarding the application of the
additional requirements imposed by sec-
tion 501(r). The Treasury Department and
the IRS received approximately 125 com-
ments in response to Notice 2010–39 and
considered the comments relating to the
consequences for failing a section 501(r)
requirement in drafting these proposed
regulations. The principal comments con-
sidered are discussed in this preamble
under Explanation of Provisions.
Notice 2011–52
In July 2011, the Treasury Depart-
ment and the IRS issued Notice 2011–52,
2011–30 I.R.B. 60 (July 8, 2011), which
addressed the CHNA requirements of sec-
tion 501(r)(3). Notice 2011–52 described
provisions related to the CHNA require-
ments that the Treasury Department and
the IRS anticipated would be included in
these proposed regulations and solicited
comments from the public. Specifically,
Notice 2011–52 described anticipated reg-
ulatory provisions regarding the documen-
tationofaCHNA,howandwhenaCHNA
is conducted, the community served by a
hospital facility, persons representing the
broad interests of the community, making
a CHNA widely available to the public, the
implementation strategy, excise taxes on
failures to meet the CHNA requirements,
reporting requirements related to CHNAs,
and the effective dates of the CHNA pro-
visions. The Treasury Department and the
IRS received more than 80 comments in
response to Notice 2011–52. The princi-
pal comments considered in drafting these
proposed regulations on the CHNA re-
quirements are discussed in this preamble
under Explanation of Provisions.
Notice 2011–52 provided that hospital
organizations could rely on the anticipated
regulatory provisions described in the no-
tice for any CHNA made widely available
to the public, and any implementation
strategy adopted, on or before the date that
is six months after the date further guid-
ance regarding the CHNA requirements
is issued. Thus, hospital organizations
may continue to rely on the interim guid-
ance described in Notice 2011–52 for
any CHNA made widely available to the
public, and any implementation strategy
adopted, on or before October 5, 2013.
Notice of Proposed Rulemaking on
Section 501(r)(4) through 501(r)(6)
On June 26, 2012, the Treasury Depart-
ment and the IRS published a notice of
proposed rulemaking in theFederal Reg-
ister(REG–130266–11; 77 FR 38148)
(“2012 proposed regulations”) that con-
tains proposed regulations regarding the
requirements of section 501(r)(4) (which
requires hospitals to establish financial
assistance and emergency medical care
policies), section 501(r)(5) (which limits
the amount hospitals can charge for certain
care provided to individuals eligible for
financial assistance), and section 501(r)(6)
(which prohibits a hospital from engaging
in extraordinary collection actions before
making reasonable efforts to determine
whether an individual is eligible for finan-
cial assistance).
The 2012 proposed regulations also
provide guidance on the hospital organi-
zations and facilities that must meet the
section 501(r) requirements. In particu-
lar, the 2012 proposed regulations contain
a definitions section that defines “hos-
pital organization,” “hospital facility,”
and other key terms used in the regula-
tions.See§1.501(r)–1 of the proposed
regulations. In accordance with section
501(r)(2)(A)(i), the 2012 proposed regu-
lations define “hospital organization” as
an organization recognized (or seeking
to be recognized) as described in sec-
tion 501(c)(3) that operates one or more
hospital facilities, including a hospital
facility operated through a disregarded
entity. Also in accordance with section
501(r)(2)(A)(i), the 2012 proposed reg-
ulations define “hospital facility” as a
facility that is required by a state to be
licensed, registered, or similarly recog-
nized as a hospital. In addition, the 2012
proposed regulations note that references
May 20, 201311122013–21 I.R.B.

to a hospital facility taking certain actions
are intended to include instances in which
the hospital organization operating the
hospital facility takes action through, or
on behalf of, the hospital facility. These
definitions and concepts generally apply
for purposes of these proposed regula-
tions on the CHNA requirements and
the consequences for failing to meet the
section 501(r) requirements, although
these proposed regulations make minor
amendments to the definitions of “hospital
facility” and “hospital organization” con-
tained in the 2012 proposed regulations,
as discussed further in the “Explanation of
Provisions” section of this preamble.
The comment period for the 2012 pro-
posed regulations closed on September 24,
2012. The Treasury Department and the
IRS have received more than 200 com-
ments in response to the 2012 proposed
regulations and are continuing to consider
these comments as they work toward fi-
nalizing those proposed regulations. The
Treasury Department and the IRS intend to
finalize the 2012 proposed regulations in
conjunction with the finalization of these
proposed regulations.
Explanation of Provisions
These proposed regulations provide
guidance on the CHNA requirements of
section 501(r)(3), and on the related re-
porting obligations of section 6033. In ad-
dition, these proposed regulations provide
guidance on the consequences described in
sections 501(r)(1), 501(r)(2)(B), and 4959
for failing to satisfy any of the section
501(r) requirements, including the section
501(r)(4) through 501(r)(6) requirements
addressed in the 2012 proposed regula-
tions. These proposed regulations gen-
erally do not otherwise provide further
guidance regarding the section 501(r)(4)
through 501(r)(6) requirements. They do,
however, make minor amendments to the
definitions of “hospital facility” and “hos-
pital organization” contained in the 2012
proposed regulations and also provide a
new definition of “operating” a hospital
facility that is applicable for purposes of
all of the section 501(r) requirements.
In interpreting the CHNA requirements
of section 501(r)(3), the Treasury Depart-
ment and the IRS sought to preserve hos-
pital facilities’ flexibility to determine the
best way to identify and meet the particu-
lar health needs of the specific communi-
ties they serve while requiring a transpar-
ent assessment process with ample oppor-
tunity for community input.
1.Hospital Facilities and Organizations
a.Hospital organization for purposes of
section 4959
Section 4959 imposes a $50,000 excise
taxon“ahospitalorganizationtowhich
section 501(r) applies” that fails to meet
the requirements of section 501(r)(3) for
any taxable year. For purposes of sec-
tion 501(r), the 2012 proposed regulations
define the term “hospital organization”
to mean an organization “recognized (or
seeking to be recognized) as described
in section 501(c)(3)” that operates one
or more hospital facilities. These pro-
posed regulations clarify that the section
4959 excise tax will apply to a hospital
organization that fails to meet the section
501(r)(3) requirements during a taxable
year in which its section 501(c)(3) status
is revoked. These proposed regulations
do not otherwise change the substance of
the “hospital organization” definition con-
tained in the 2012 proposed regulations.
b.Multiple buildings under a single
hospital license
The definition of “hospital facility”
in the 2012 proposed regulations pro-
vides that multiple buildings operated
by a hospital organization under a single
state license may be considered a single
hospital facility. This special rule for
multiple buildings was intended to al-
low flexibility but has the disadvantage
of making it harder for the IRS and the
public to understand and to evaluate the
information reported on a hospital organi-
zation’s Form 990, particularly if multiple
buildings under a single state license are
reported differently (as a single facility or
as multiple facilities)from year to year.
To increase the certainty and consistency
in the designation of hospital facilities,
these proposed regulations amend this def-
inition to provide that multiple buildings
operated by a hospital organization under
a single state license “are” (rather than
“may be”) considered a single hospital
facility. The Treasury Department and the
IRS request comments regarding whether
(and under what circumstances) a hospital
organization should be able to treat multi-
ple buildings under a single state license
as separate hospital facilities for purposes
of the CHNA and other section 501(r)
requirements and, if so, how certainty and
consistency in the designation of hospital
facilities can be achieved.
c.Tribal hospital facilities
Several commenters recommended that
these proposed regulations make clear that
a hospital facility operated by an Indian
tribe or tribal organization is not subject
to the section 501(r) requirements, even
if the hospital facility is part of an or-
ganization described insection 501(c)(3).
These commenters stated that tribal hospi-
tal facilities are not typically “required by
a state to be licensed, registered, or sim-
ilarly recognized as a hospital,” as con-
templated in section 501(r)(2)(A)(i). The
Treasury Department and the IRS note that
section 501(r)(2)(A)(i) refers only to a hos-
pital facility licensed or registered by a
state, not an Indian tribal government, and
that section 7871 does not provide that an
Indian tribal government is treated as a
state for purposes of section 501(r). Ac-
cordingly, pending any future guidance re-
garding other categories of hospital organi-
zations or facilities, a tribal facility that is
not required by a state to be licensed, regis-
tered, or similarly recognized as a hospital
is not a “hospital facility” for purposes of
section 501(r), and a section 501(c)(3) or-
ganization will not be considered a “hospi-
tal organization” solely as a result of oper-
ating such a tribal facility.
d.Operating a hospital facility through a
partnership
Notice 2011–52 stated the intention of
the Treasury Department and the IRS to in-
clude within the definition of “hospital or-
ganization” any organization described in
section 501(c)(3) that operates a hospital
facility through a joint venture, limited li-
ability company, or other entity treated as
a partnership for federal tax purposes. No-
tice 2011–52 also requested comments re-
garding whether (and under what circum-
stances) an organization should not be con-
sidered to “operate” a hospital facility for
purposes of section 501(r) as a result of its
owning a small interest (other than a gen-
eral partner or similar interest) in an entity
2013–21 I.R.B.1113May 20, 2013

treated as a partnership for federal tax pur-
poses that operates the hospital facility.
In response to Notice 2011–52, a few
commenters recommended that a hospi-
tal organization generally should not be
considered to operate a hospital facility
through a partnership when it holds a mi-
nority interest in that partnership. In defin-
ing “minority interest,” commenters sug-
gested ownership thresholds ranging from
less than 50 percent to less than 20 per-
cent. Commenters stated that a hospital or-
ganization with such a minority interest in
a hospital facility joint venture would not
have the necessary control over the joint
venture to ensure that the hospital facil-
ity in question complied with the require-
ments of section 501(r).
Another commenter recommended that
section 501(r) should not apply to a hos-
pital facility operated by a partnership if
the partner described in section 501(c)(3)
treats the income derived from that facil-
ity as unrelated business taxable income
(UBTI) that is taxed under section 511.
This commenter argued that the line on the
applicability of section 501(r) should be
drawn based on the taxability of the hospi-
tal facility’s income rather than on the ba-
sis of a particular percentage of ownership.
Yet another commenter suggested that
these proposed regulations should provide
that an organization that owns a minority
limited partnership interest in a partnership
that operates a hospital facility should not
be considered to “operate” that hospital fa-
cility for purposes of section 501(r) if the
organization entered into the limited part-
nership agreement prior to the date sec-
tion 501(r) was enacted (that is, March 23,
2010) and has a primary tax-exempt pur-
pose other than the provision of commu-
nity health care. As an example of such an
organization, this commenter cited a uni-
versity medical school that entered into a
partnership agreement to operate a hospi-
tal facility that gives the university control
over the joint venture sufficient to ensure
the operation of the hospital facility fur-
thers its exempt educational purpose, but
insufficient to ensure the hospital facility
is in compliance with section 501(r).
Rev. Rul. 2004–51, 2004–1 C.B. 975,
provides that the activities of an entity that
is treated as a partnership for federal tax
purposes are treated as the activities of the
tax-exempt partner for purposes of deter-
mining whether the tax-exempt partner is
operated exclusively for exempt purposes
and engages in an unrelated trade or busi-
ness.See alsoRev. Rul. 98–15, 1998–1
C.B. 718. Consequently, consistent with
Notice 2011–52, these proposed regula-
tions provide that, as a general rule, a hos-
pital organization “operates” a hospital fa-
cility if it is a partner in a joint venture,
limited liability company, or other entity
treated as a partnership for federal income
tax purposes that operates the hospital fa-
cility.
However, in light of the comments re-
ceived, these proposed regulations provide
two exceptions to this general rule. First,
as commenters observed, an organization
without the control over the operation of
a hospital facility sufficient to ensure that
the hospital facility furthers an exempt
purpose is unlikely to have the control suf-
ficient to ensure compliance with section
501(r). As a general rule, if a tax-exempt
partner does not have control sufficient
to ensure that a trade or business activity
regularly carried on by the partnership
furthers (or is substantially related to)
its exempt purposes, that activity will be
considered an unrelated trade or business
with respect to the tax-exempt partner.See
Rev. Rul. 2004–51; Rev. Rul. 98–15.
These proposed regulations provide that if
a section 501(c)(3) partner of a partnership
operating a hospital facility does not
have control over the operation of the
hospital facility sufficient to ensure that the
operation of the hospital facility furthers
an exempt purpose described in section
501(c)(3) and thus treats the operation of
the hospital facility, including the facility’s
provision of medical care, as an unrelated
trade or business, the hospital organization
will not be considered to “operate” the
hospital facility for purposes of section
501(r).
Second, as another commenter ob-
served, some tax-exempt organizations
may have entered into partnership ar-
rangements prior to the enactment of
section 501(r) that gave them control over
a partnership sufficient to ensure that the
partnership furthers charitable purposes
other than the provision of community
health care, but not sufficient to ensure
compliance with section 501(r). In re-
sponse to this comment, these proposed
regulations provide a grandfather rule
under which a hospital organization will
not be considered to “operate” a hospital
facility for purposes of section 501(r) if
certain conditions aremet. First,atall
times since March 23, 2010, the hospital
organization must have been organized
and operated primarily for educational or
scientific purposes and must not have en-
gaged primarily in the operation of one or
more hospital facilities. Second, pursuant
to a partnership arrangement (including
any side agreements) entered into before
March 23, 2010, the hospital organization
must not own more than 35 percent of the
capital or profits interest in the partner-
ship, not own a general partner or similar
interest, and not have sufficient control
over the operation of the hospital facility
to ensure that the hospital facility complies
with the requirementsof section 501(r).
Finally, like both Notice 2011–52 and
the 2012 proposed regulations, these pro-
posed regulations make clear that a hospi-
tal organization operates a hospital facility
if it operates a hospital facility through a
wholly-owned entity that is disregarded as
separate from the hospital organization for
federal tax purposes.
e.Activities unrelated to the operation of
a hospital facility
In response to Notice 2010–39, a few
commenters asked whether the require-
ments of section 501(r) apply to those
aspects of a hospital organization’s oper-
ations that do not relate to the operation
of a hospital facility. Section 501(r)(2)(B)
provides that the requirements of sec-
tion 501(r) apply separately with respect
to each of the hospital facilities a hos-
pital organization operates. Similarly,
§1.501(r)–2 of these proposed regulations
(which describes consequences for fail-
ing to satisfy the requirements of section
501(r)) only applies to circumstances in
which a hospital organization fails to meet
one or more of the requirements of sec-
tion 501(r) “separately with respect to one
or more hospital facilities” it operates.
Thus, the Treasury Department and the
IRS intend that a hospital organization is
not required to meet the requirements of
section 501(r) with respect to any activi-
ties unrelated to the operation of a hospital
facility. For example, if a hospital or-
ganization operates a facility that is not
required to be licensed as a hospital by
the state in which the facility is located,
the hospital organization is not required
May 20, 201311142013–21 I.R.B.

to meet the requirements of section 501(r)
with respect to that facility.
f.Authorized body of a hospital
organization or facility
For purposes of determining whether a
hospital organization has established a pol-
icy required under section 501(r)(4) for a
hospital facility it operates, the 2012 pro-
posed regulations would require an autho-
rized body to adopt the policy for the hos-
pital facility. The 2012 proposed regula-
tions define the term “authorized body” to
include: (1) the governing body (that is,
the board of directors, board of trustees,
or equivalent controlling body) of the hos-
pital organization; (2) a committee of, or
other party authorized by, the governing
body of the hospital organization, to the
extent permitted under state law; or (3) in
the case of a hospital facility that has its
own governing body and is recognized as
an entity under state law but is a disre-
garded entity for federal tax purposes, the
governing body of that hospital facility, or
a committee of, or other party authorized
by, that governing body to the extent per-
mitted under state law.
Because the definition of an “autho-
rized body” of a hospital facility that
adopts a CHNA report or implementation
strategy required under section 501(r)(3)
should be the same as the definition of an
“authorized body” for purposes of section
501(r)(4), the term“authorized body of a
hospital facility” is defined in §1.501(r)–1
of these proposed regulations so that it
may apply for purposes of both the sec-
tion 501(r)(3) and the section 501(r)(4)
requirements.
2.Failures to Satisfy the Requirements of
Section 501(r)
a.Minor and inadvertent omissions and
errors
Numerous commenters to Notice
2010–39 requested guidance on the con-
sequences of failing to meet one or more
of the requirements of section 501(r). In
addition, commenters have noted that the
guidance released so far on section 501(r)
(in Notice 2011–52 and the 2012 proposed
regulations) has proposed multiple spe-
cific requirements, and that hospitals, as
large complex institutions, may experi-
ence minor and inadvertent compliance
failures notwithstanding their good faith
efforts to comply with the requirements.
Commenters representing hospitals ex-
pressed the view that a failure to meet a
section 501(r) requirement should only re-
sult in adverse consequences for a hospital
organization if the failure is a substantial
one. The Treasury Department and the
IRS received similar informal comments
from patient advocates. Commenters
also recommended that no adverse con-
sequences should result from a hospital
organization’s failure if the organization
corrects the failure, with many of these
commenters specifically suggesting that
such corrections be required to be made
“by the end of the fiscal year being re-
ported.”
The Treasury Department and the IRS
recognize that minor and inadvertent er-
rors may occur even in circumstances in
which a hospital facility has practices and
procedures in place that are reasonably
designed to facilitate overall compliance
with section 501(r) and has implemented
safeguards reasonably calculated to pre-
vent errors. Therefore, these proposed reg-
ulations provide that a hospital facility’s
omission of required information from a
policy or report described in §1.501(r)–3
or §1.501(r)–4, or error with respect to
the implementation or operational require-
ments described in §1.501(r)–3 through
§1.501(r)–6, will not be considered a fail-
ure to meet a requirement of section 501(r)
if the omission or error was minor, inadver-
tent, and due to reasonable cause, and the
hospital facility corrects such omission or
error as promptly after discovery as is rea-
sonable given the nature of the omission or
error.
b.Excusing certain failures if a hospital
facility corrects and makes disclosure
With respect to omissions or errors that
rise above the level of minor and inadver-
tent, the Treasury Department and the IRS
recognize that a hospital facility’s prompt
discovery and correction of such omis-
sionsorerrorsisinthebestinterestsofpa-
tients and that requiring hospital facilities
to report such omissions or errors and dis-
close how such omissions or errors were
corrected (for example, on the Form 990)
would achieve transparency, which is an
important objective of section 501(r). In-
creased transparency, in turn, will permit
organizations concerned with community
health needs to use this information to pro-
mote adoption of practices and procedures
that advance the goals of the section 501(r)
requirements and encourage promulgation
of best practices. To provide an incen-
tive for hospital facilities to take steps not
only to avoid errors but to correct and pro-
vide disclosure when they occur, the Trea-
sury Department and the IRS will issue a
revenue procedure, notice, or other guid-
ance published in the Internal Revenue
Bulletin which will provide that a hospi-
tal facility’s failure to meet one or more of
the requirements described in §1.501(r)–3
through §1.501(r)–6 that is neither willful
nor egregious will be excused if the hos-
pital facility corrects and provides disclo-
sure in accordance with the rules set forth
in the guidance. The Treasury Department
and the IRS anticipate that this guidance
will provide that correction and disclosure
should be reasonable and appropriate for
the failure at issue.
For purposes of this provision, willful is
to be interpreted consistent with the mean-
ing of that term in the context of civil
penalties, which would include a failure
due to gross negligence, reckless disre-
gard, or willful neglect. Furthermore, cor-
rection and disclosure will not create a pre-
sumption that the failure was neither will-
ful nor egregious.
The Treasury Department and the IRS
intend to issue the guidance regarding cor-
rection and disclosure in proposed form in
order to provide an opportunity to com-
ment on the procedures described therein.
c.Facts and circumstances considered
in determining whether to revoke section
501(c)(3) status
Section 501(r)(1)provides that a hos-
pital organization will not be treated as
described in section 501(c)(3) unless it
meets the requirements of section 501(r).
These proposed regulations interpret this
language as giving the IRS the authority
to revoke a hospital organization’s sec-
tion 501(c)(3) status if the organization
fails to meet one or more requirements
of section 501(r). However, the Treasury
Department and the IRS agree with com-
menters that the IRS should consider the
relative size, scope, nature, and signifi-
cance of any failures to meet the section
501(r) requirements, as well as the reasons
2013–21 I.R.B.1115May 20, 2013

for such failures and whether the same
type of failures have previously occurred,
when determining whether revocation of
section 501(c)(3) status is warranted. In
addition, the Treasury Department and the
IRS consider it desirable that these pro-
posed regulations provide incentives for a
hospital facility to establish and routinely
follow practices and procedures reason-
ably designed to promote and facilitate
overall compliance with the section 501(r)
requirements and identify any problems
that arise and the reasons for their occur-
rence. Hospital facilities should also have
incentives to correct any section 501(r)
failures as promptly after discovery as is
reasonable given the nature of the failure
and implement safeguards reasonably cal-
culated to prevent similar failures from
occurring in the future. Accordingly, these
proposed regulations provide that the IRS
will consider all of these facts and circum-
stances in determining whether to continue
to recognize the section 501(c)(3) status
of a hospital organization that fails to
meet one or more requirements of section
501(r). In general, the Treasury Depart-
ment and the IRS expect that application
of these facts and circumstances will or-
dinarily result in revocation of the section
501(c)(3) status of a hospital organization
if the organization’s failures to meet the
requirements of section 501(r) are willful
or egregious.
d.Taxation of noncompliant hospital
facilities
A number of commenters recom-
mended that if a hospital organization
fails to meet a section 501(r) requirement
with respect to a particular hospital facil-
ity it operates, only that hospital facility
should be treated as not described in sec-
tion 501(c)(3), and the facility’s failure
should not negate the tax exemption of
the hospital organization as a whole. A
few commenters recommended that if a
hospital organization ceases to qualify
as an organization described in section
501(c)(3) with respect to a particular hos-
pital facility but continues to qualify as an
organization described in section 501(c)(3)
overall, then any net income derived from
the disqualified facility should be subject
to the unrelated business income tax under
section 511.
Section 501(r)(2)(B)(ii) provides that a
hospital organization operating more than
one hospital facility shall not be treated as
described in section 501(c)(3) with respect
to any such hospital facility for which the
requirements of section 501(r)(1) are not
separately met (a “noncompliant hospital
facility”). Status under section 501(c)(3) is
determined at the organizational level, and
treating an organization as not described
in section 501(c)(3) “with respect to” a
particular hospital facility it operates (or
a particular branch, division, or activity
of the organization) has no generally rec-
ognized meaning under the provisions of
the Code governing tax-exempt organiza-
tions. Notwithstanding this fact, the lan-
guage in section 501(r)(2)(B)(ii) suggests
that a particular noncompliant hospital fa-
cility operated by a hospital organization
with more than one facility may be treated
as not described in section 501(c)(3) with-
out affecting the section 501(c)(3) status
of the hospital organization. A noncom-
pliant hospital facility that is treated as not
described in section 501(c)(3), but that is
owned and operated by a hospital organ-
ization that continues to be described in
section 501(c)(3), cannot be described in
another subsection of 501(c) (such as sec-
tion 501(c)(4)), since the plain language
of section 501(c) makes clear that only or-
ganizations (not facilities, branches, divi-
sions, or other components of organiza-
tions) can be described in any one subsec-
tion of 501(c). Thus, these proposed regu-
lations interpret section 501(r)(2)(B)(ii) to
mean that a hospital organization that is not
treated as described in section 501(c)(3)
“with respect to” a particular noncompli-
ant hospital facility ceases to be exempt
from taxation under section 501(a) with re-
spect to that facility, even while the hospi-
tal organization as a whole (with respect to
its other hospital facilities and activities)
continues to be otherwise exempt from
taxation under section 501(a) because it is
described in section 501(c)(3).
Accordingly, these proposed regula-
tions provide that if a hospital organization
operating more than one hospital facility
fails to meet one or more of the require-
ments of section 501(r) separately with
respect to a hospital facility during a tax-
able year but continues to be recognized as
described in section 501(c)(3), the income
derived from the noncompliant hospital
facility during that taxable year will be
subject to tax computed as provided in sec-
tion 11 (or as provided in section 1(e) if the
hospital organization is a trust described
in section 511(b)(2)). To maintain consis-
tency with the treatment of organizations
operating a single hospital facility, this tax
will apply only if the hospital organiza-
tion would not continue to be described in
section501(c)(3)basedonthefactsand
circumstances described in section 2.c of
this preamble if the noncompliant hospital
facility were the only hospital facility that
the organization operated. This tax would
not apply in the event of minor and inad-
vertent omissions or errors described in
section 2.a of this preamble or of failures
that are excused in accordance with the
guidance described in section 2.b of this
preamble.
In applying the tax, the income derived
from a noncompliant hospital facility dur-
ing a taxable year will be the gross income
derived from that hospital facility during
the taxable year, less the deductions al-
lowedbychapter1oftheCodethatare
directly connected tothe operation of that
hospital facility during the taxable year.
These proposed regulations provide that
this computation will exclude any gross in-
come and deductions already taken into ac-
count in computing any UBTI described in
section 512 derived from the facility dur-
ing the taxable year.
To be directly connected with the oper-
ation of a noncompliant hospital facility,
these proposed regulations provide that an
item of deduction must have proximate
and primary relationship to the operation
of the hospital facility. Expenses, depreci-
ation, and similar items attributable solely
to the operation of a hospital facility are
proximately and primarily related to such
operation, and therefore qualify for de-
duction to the extent that they meet the
requirements of section 162, section 167,
or other relevant provisions of the Code.
These proposed regulations further pro-
vide that where expenses, depreciation,
and similar items are attributable to more
than one hospital facility operated by the
hospital organization (and/or to activities
of the hospital organization unrelated to
the operation of hospital facilities), such
items shall be allocated between the hos-
pital facilities (and/or other activities) on
a reasonable basis.
In addition, these proposed regulations
provide the gross income and allowed
May 20, 201311162013–21 I.R.B.

deductions of a noncompliant hospital
facility may not be aggregated with the
gross income and allowed deductions of
the hospital organization’s other noncom-
pliant hospital facilities or its unrelated
trade or business activities described in
section 513. Thus, a hospital organization
operating more than one noncompliant
hospital facility that is subject to the facil-
ity-level tax must compute each facility’s
taxable income separately and may not use
net operating losses from one noncom-
pliant hospital facility to offset taxable
income derived from another noncompli-
ant hospital facility. Similarly, a hospital
organization may not use net operating
losses from a noncompliant hospital facil-
ity to offset any UBTI derived from the
organization’s unrelated trade or business
activities.
A number of commenters expressed
concern that interest on bonds issued as
qualified 501(c)(3) bonds to finance a
hospital facility will become taxable if the
facility fails one or more requirements of
section 501(r). These proposed regula-
tions make clear that if a hospital organi-
zation operating a noncompliant hospital
facility continues to be recognized as de-
scribed in section 501(c)(3) and otherwise
exempt from tax under section 501(a), the
fact that a facility-level tax is imposed as
a result of the facility’s failure to comply
with section 501(r) will not itself cause the
interest on such bonds to be taxable.
Finally, these proposed regulations
make clear that the facility-level tax de-
scribed in this section 2.d of the preamble
will be reported on the Form 990-T.
3.Community Health Needs Assessments
Consistent with section 501(r)(3)(A),
these proposed regulations provide that a
hospital organization meets the require-
ments of section 501(r)(3) in any taxable
year with respect to a hospital facility it
operates only if the hospital facility has
conducted a CHNA in such taxable year or
in either of the two immediately preceding
taxable years and an authorized body of
the hospital facility has adopted an imple-
mentation strategy to meet the community
health needs identified through the CHNA
by the end of the taxable year in which
the hospital facility conducts the CHNA.
In general, these proposed regulations are
consistent with the anticipated rules de-
scribed in Notice 2011–52, with certain
modifications intended to be responsive to
the more than 80 comments received on
Notice 2011–52.
a.Conducting a community health needs
assessment
In conducting a CHNA, these proposed
regulations provide that a hospital facility
must define the community it serves and
assess the health needs of that community.
In assessing the community’s health needs,
the hospital facility must, consistent with
section 501(r)(3)(B)(i), take into account
input from persons who represent the
broad interests of its community, including
those with special knowledge of or exper-
tise in public health. The hospital facility
must also document the CHNA in a written
report (“CHNA report”) that is adopted for
the hospital facility by an authorized body
of the hospital facility. Finally, consistent
with section 501(r)(3)(B)(ii), the hospi-
tal facility must make the CHNA report
widely available to the public. These pro-
posed regulations provide that a CHNA
is considered “conducted” on the date the
hospital facility has completed all of these
steps. Because a hospital facility must
make a CHNA report widely available
to the public continuously for a number
of years (as discussed in section 3.a.vi of
this preamble), these proposed regulations
clarify that a hospital facility is considered
to have completed the step of making the
CHNA report widely available to the pub-
lic on the date it first makes the CHNA
report widely available to the public.
i. CommunityServedbytheHospital
Facility
Notice 2011–52 stated the intention
of the Treasury Department and the IRS
to allow a hospital facility to take into
account all of the relevant facts and cir-
cumstances in defining the community it
serves. Notice 2011–52 noted that, gener-
ally, the Treasury Department and the IRS
would expect a hospital facility’s com-
munity to be defined geographically but
that, in some cases, the definition might
also take into account target populations
served or specialized functions. Notwith-
standing this generally flexible approach
to defining community, Notice 2011–52
stated that a community could not be de-
fined in a manner that circumvented the
requirement to assess the health needs
of the hospital facility’s community by
excluding, for example, medically under-
served populations, low-income persons,
minority groups, or those with chronic
disease needs. Finally, Notice 2011–52 re-
quested comments on the relative merits of
different geographically-based definitions
of community and, more specifically, on
whether future guidance should define the
geographic community of a hospital fa-
cility as the Metropolitan Statistical Area
(MSA) or Micropolitan Statistical Area
(μSA) in which the facility is located or, if
the hospital facility is a rural facility not
located in a MSA or μSA, as the county in
which the facility is located.
Many commenters supported the
facts-and-circumstances approach to
defining a hospital facility’s community
outlined in Notice 2011–52 and recom-
mended against a definition based on
specified geographic boundaries. These
commenters noted that each hospital facil-
ity is in the best position to determine its
community and that requiring the commu-
nity to be defined as a specific geographic
area may not be appropriate or corre-
spond to the actual populations served,
especially in the case of specialized and
regional hospitals. These commenters
also recommended against defining the
community served by a hospital facility
as the MSA, μSA, or county in which the
facility is located, noting that such areas or
politically-defined jurisdictions are often
unrelated to hospital service areas.
Other commenters recommended a ge-
ographic definition of community, but re-
quested one that would be flexible in the
method of definition (for example, not re-
stricted to specific political jurisdictions).
A few commenters went further and stated
that the geographic definition of commu-
nity should include the political jurisdic-
tion in which the hospital facility is located
or where the hospital facility is an essen-
tial provider. These commenters recom-
mended against definitions of community
based on the demographics or residence of
the hospital facility’s specific patient pop-
ulations, noting that a hospital facility’s
current patient population does not neces-
sarily reflect the broader community.
Consistent with Notice 2011–52, these
proposed regulations provide a hospital
facility with the flexibility to take into
account all of the relevant facts and cir-
2013–21 I.R.B.1117May 20, 2013

cumstances in defining the community
it serves, including the geographic area
served by the hospital facility, target pop-
ulations served (for example, children,
women, or the aged), and principal func-
tions (for example, focus on a particular
specialty area or targeted disease). These
proposed regulations also clarify that a
hospital facility may define its community
to include populations in addition to its
patient populations and geographic areas
outside of those in which its patient pop-
ulations reside. For example, a hospital
facility collaborating with other hospi-
tal facilities in its MSA in conducting a
CHNA may define its community as the
entire MSA in which all of the collaborat-
ing hospital facilities are located, even if
the hospital facility itself only generally
serves and draws its patients from a por-
tion of that MSA.
While desiring to give a hospital fa-
cility the flexibility it needs to define its
community served ina manner appropri-
ate to its specific facts and circumstances,
the Treasury Department and the IRS con-
tinue to share the interest expressed by
some commenters in ensuring that hospi-
tal facilities assess and address the needs
of medically underserved, low-income,
and minority populations in the areas they
serve. Thus, similar to the restriction in-
cluded in Notice 2011–52, these proposed
regulations provide that a hospital facil-
ity may not define its community in a
way that excludes medically underserved,
low-income, or minority populations who
are part of its patient populations, live in
geographic areas in which its patient pop-
ulations reside (unless they are not part of
the hospital facility’s target populations
or affected by its principal functions), or
otherwise should be included based on
the method used by the hospital facility
to define its community. These proposed
regulations clarify that medically under-
served populations include populations
experiencing health disparities or at risk
of not receiving adequate medical care
as a result of being uninsured or under-
insured or due to geographic, language,
financial, or other barriers. (For reasons
discussed in section 3.a.iii.B of this pre-
amble, these proposed regulations do not
list those with chronic disease needs as a
separate category of persons that must not
be excluded.) Finally, if a hospital facility
uses a method of defining its community
that takes into account patient popula-
tions, these proposed regulations require
the hospital facility to treat as patients
all individuals who receive care from the
hospital facility, without regard to whether
(or how much) they or their insurers pay
for the care received or whether they are
eligible for financial assistance.
ii. Assessing Community Health Needs
These proposed regulations provide
that in order to “assess” the health needs of
the community it serves, a hospital facil-
ity must identify significant health needs
of the community, prioritize those health
needs, and identify potential measures
and resources (such as programs, organi-
zations, and facilities in the community)
available to address the health needs. For
these purposes, health needs include requi-
sites for the improvement or maintenance
of health status in both the community at
large and in particular parts of the com-
munity (such as particular neighborhoods
or populations experiencing health dispar-
ities). Requisites for the improvement or
maintenance of health status in a commu-
nity may include improving access to care
by removing financial and other barriers
to care, such as a lack of information re-
garding sources of insurance designed to
benefit vulnerable populations.
Notice 2011–52 stated the intention of
the Treasury Department and the IRS to
require a hospital facility to prioritize all
of the community health needs identified
through the CHNA. A few commenters
suggested that only the most significant
of the likely extensive list of community
health needs identified through a CHNA
should have to be prioritized. These pro-
posed regulations respond to this comment
by clarifying that a CHNA need only iden-
tify significant health needs and need only
prioritize, and otherwise assess, those sig-
nificant health needs identified. A hospi-
tal facility may determine whether a health
need is significant based on all of the facts
and circumstances present in the commu-
nity it serves.
A few commenters asked for addi-
tional guidance regarding how a CHNA
should prioritize community health needs.
These proposed regulations do not require
a hospital facility to use any particular
methods or criteria in prioritizing health
needs. They do, however, list as possi-
ble examples of prioritization criteria the
burden, scope, severity, or urgency of the
health need; the estimated feasibility and
effectiveness of possible interventions;
the health disparities associated with the
need; and/or the importance the commu-
nity places on addressing the need. This
list of possible prioritization criteria is not
intended to be exhaustive, and a hospital
facility may use any criteria it deems ap-
propriate.
iii. Persons Representing the Broad
Interests of the Community
In assessing the health needs of the
community it serves, these proposed
regulations require a hospital facility to
(consistent with section 501(r)(3)(B)(i))
take into account input from persons who
represent the broad interests of the com-
munity served by the hospital facility,
including those with special knowledge
of or expertise in public health. Specifi-
cally, these proposed regulations require
a hospital facility to take into account
input from, at a minimum: (1) at least
one state, local, tribal, or regional gov-
ernmental public health department (or
equivalent department or agency) with
knowledge, information, or expertise rele-
vant to the health needs of the community;
(2) members of medically underserved,
low-income, and minority populations in
the community, or individuals or organiza-
tions serving or representing the interests
of such populations; and (3) written com-
ments received on the hospital facility’s
most recently conducted CHNA and most
recently adopted implementation strategy.
Notice 2011–52 stated that the Trea-
sury Department and the IRS intended to
require a CHNA to take into account input
from, at a minimum: (1) persons with spe-
cial knowledge of or expertise in public
health; (2) federal, tribal, regional, state, or
local health or other departments or agen-
cies, with current data or other information
relevant to the health needs of the com-
munity served by the hospital facility; and
(3) leaders, representatives, or members
of medically underserved, low-income,
and minority populations, and populations
with chronic disease needs, in the commu-
nity served by the hospital facility.
May 20, 201311182013–21 I.R.B.

A. Governmental public health
departments
With respect to the requirement de-
scribed in Notice 2011–52 to take into ac-
count input from federal, tribal, regional,
state, or local health or other departments,
many commenters urged that a hospital
facility should be able to choose the level
and type of governmental public health
department from which it seeks input,
noting that not every local jurisdiction has
a local public health department. On the
other hand, a number of public health or-
ganizations suggested that these proposed
regulations should require a hospital facil-
ity to consult with the state public health
department in the state where the hospital
facility is licensed and/or the local public
health department in the local jurisdic-
tion where the hospital facility is located.
These organizations noted that such de-
partments can play a critically important
role in coordinating CHNA efforts and
provide expertise in CHNA planning and
execution, access to existing health data,
and knowledge of local conditions, needs,
and resources.
These proposed regulations preserve
the flexibility in Notice 2011–52 of al-
lowing a hospital facility to choose the
jurisdictional level of government (for ex-
ample, state, local, tribal, or regional) that
it feels is most appropriate for its CHNA.
These proposed regulations do not require
a hospital facility to seek input from a
local public health department, in partic-
ular, in recognition of some commenters’
observation that not all jurisdictions will
have local public health departments avail-
able to participate in the CHNA process.
However, in recognition of the planning
and subject-matter expertise that public
health departments can offer to the CHNA
process, a hospital facility is required to
seek input from a public health department
(or equivalent department or agency) in
particular, rather than any governmental
departments with current data or other
information relevant to the health needs
of the community (as described in Notice
2011–52). Such input could include input
from the state public health official or any
local public health official.
In addition, given commenters’ empha-
sis on the importance of input from pub-
lic health departments at the state or local
level, these proposed regulations require a
hospital facility to seek input from a pub-
lic health department at a state or local, not
a federal, level. Because a governmental
public health department presumably has
special knowledge of or expertise in pub-
lic health, requiring input from a public
health department eliminates the need for a
separate requirement to consult with a per-
son with special knowledge of or exper-
tise in public health (as provided in Notice
2011–52).
B. Medically underserved, low-income,
and minority populations
Commenters generally supported the
purpose behind the requirement to take
into account input from medically un-
derserved, low-income, and minority
populations in the community but asked
for clarification on who may be consid-
ered “leaders” or “representatives” of such
populations. One commenter noted that
the term “chronic disease needs” is broad
and could potentially require a hospital
facility to seek input from a large number
of individuals in order to address every
chronic disease in its community.
These proposed regulations maintain
the requirement to take into account input
from medically underserved, low-income,
and minority populations in the commu-
nity served by the hospital facility but
respond to comments by clarifying and
simplifying the approach taken in No-
tice 2011–52. To address the numerous
comments expressingconfusion over the
terms “leaders” and “representatives” of
such populations, these proposed regula-
tions clarify that a hospital facility may
seek input either directly from members of
medically underserved, low-income, and
minority populations in the community
(for example, in the form of meetings,
focus groups, surveys, or interviews) or
from individuals or organizations serv-
ing or representing the interests of those
populations. To address the concern with
requiring input related to every chronic
disease in a community, these proposed
regulations do not refer to chronic dis-
ease needs in particular but rather define
“medically underserved populations” in a
manner that focuses on disparities in cov-
erage, access, and other barriers to care
for persons with health needs that may
include, but are not limited to, chronic
diseases.
C. Written comments
A few commenters recommended an
input requirement not contained in No-
tice 2011–52: a requirement that a hos-
pital facility take into account public in-
put and comments on a draft version of
its CHNA report before the report is final-
ized. These commenters noted the impor-
tance of a public comment process for en-
suring that the CHNA accurately reflects
the community’s views and priorities and
adequately analyzes available data.
These proposed regulations do not
adopt the specific recommendations to
require hospital facilities to make a draft
copy of a CHNA report available for pub-
lic comment due to the complexity of the
additional timeframes and procedures such
a process would require. However, the
Treasury Department and the IRS recog-
nize the value of providing a mechanism
for public feedback on CHNA reports and
their related implementation strategies.
Therefore, these proposed regulations re-
spond to these comments by requiring a
hospital facility to consider written com-
ments received from the public on the
hospital facility’s most recently conducted
CHNA and most recently adopted im-
plementation strategy. (As discussed in
section 4 of this preamble, the public will
be able to review a hospital facility’s most
recently adopted implementation strategy
because it will either be attached to the
Form 990 of the hospital organization that
operates it or made widely available on a
Web site.) Because a new CHNA must be
conducted and an implementation strategy
adopted at least once every three years,
this requirement establishes the same sort
of continual feedback on CHNA reports
suggested by commenters, albeit over a
longer period of time. It is anticipated that
this opportunity for feedback on CHNA
reports and implementation strategies will
result in a meaningful exchange over time
and that the longer timeframe will give
the public sufficient time to provide com-
ments and hospital facilities sufficient
time to consider the public’s comments
and take the comments into account when
conducting their next CHNA. In addi-
tion, as discussed in section 3.a.vi of this
preamble, to help facilitate the option of
posting a draft CHNA report for public
review and comment, these proposed reg-
ulations provide that the posting of draft
2013–21 I.R.B.1119May 20, 2013

CHNA reports will not trigger the start of
a hospital facility’s next three-year CHNA
cycle.
D. Input on financial and other barriers
and from other sources
In addition, some commenters recom-
mended that a hospital facility should be
required to integrate evaluations of finan-
cial assistance policies and procedures and
the need for uncompensated care into its
CHNA. The Treasury Department and the
IRS recognize that the need to improve
access to care by removing financial bar-
riers can be among the significant health
needs assessed in a CHNA. Accordingly,
these proposed regulations provide that in-
put from persons representing the broad in-
terests of the community includes, but is
not limited to, input on any financial and
other barriers to access to care in the com-
munity.
Finally, similar to Notice 2011–52,
these proposed regulations provide that a
hospital facility may take into account in-
put from a broad range of persons located
in or serving its community who may have
special knowledge of or expertise in public
health, including, but not limited to, health
care consumers and consumer advocates,
nonprofit and community-based organiza-
tions, academic experts, local government
officials, local schooldistricts,health care
providers and community health centers,
health insurance and managed care organi-
zations, private businesses, and labor and
workforce representatives. As discussed
in section 3.a.vi of this preamble, one way
for a hospital facility to take into account
input from such a broad range of persons is
to pursue the option of posting on its Web
site a draft CHNA report for public review
and comment. The Treasury Department
and the IRS believe a CHNA with broad
input from the community can increase
the likelihood of well-targeted initiatives
that address the needs of communities and
improve the health of residents.
iv. Documentation of a CHNA
Similar to the documentation rule de-
scribed in Notice 2011–52, these proposed
regulations provide that a hospital facility
must document its CHNA in a CHNA re-
port that is adopted by an authorized body
of the hospital facility and includes: (1)
a definition of the community served by
the hospital facility and a description of
how the community was determined; (2)
a description of the process and methods
used to conduct the CHNA; (3) a descrip-
tion of how the hospital facility took into
account input from persons who represent
the broad interests of the community it
serves; (4) a prioritized description of the
significant health needs of the community
identified through the CHNA, along with a
description of the process and criteria used
in identifying certain health needs as sig-
nificant and prioritizing such significant
health needs; and (5) a description of po-
tential measures and resources identified
through the CHNA to address the signif-
icant health needs.
Like Notice 2011–52, the proposed reg-
ulations provide more detail about two of
these required elements of the CHNA re-
port: the description of the process and
methods used to conduct the CHNA and
the description of how the hospital facil-
ity took into accountinput from persons
who represent the broad interests of the
community. However, in response to com-
ments about the need for greater flexibil-
ity, these proposed regulations provide that
a hospital facility’s CHNA report “will be
considered to” describe each of these el-
ements if it contains certain information
instead of prescribing a single method of
meeting the requirement.
A. Description of process and methods
These proposed regulations provide
that a hospital facility’s CHNA report will
be considered to describe the process and
methods used to conduct the CHNA if
the CHNA report: (1) describes the data
andotherinformationusedintheassess-
ment, as well as the methods of collecting
and analyzing this data and information,
and (2) identifiesany parties with whom
the hospital facility collaborated, or with
whom it contracted for assistance, in con-
ducting the CHNA.
B. Description of community input
In describing how the hospital facility
took into account input from persons who
represent the broad interests of the com-
munity it serves, Notice 2011–52 stated
that a hospital facility would have to de-
scribe when and how the organization
consulted with such persons. A number
of commenters sought clarification that
a general summary of “when and how”
would be sufficient. Specifically, some of
these commenters noted that a detailed ac-
count of each instance of feedback could
be quite burdensome and may create the
impression that less formal interactions
with community members are insufficient
or unworthy of consideration or hinder the
free flow of information.
In response to these comments, these
proposed regulations clarify that the
CHNA report may summarize, in general
terms, how and over what time period
input was provided (for example, whether
through meetings, focus groups, inter-
views, surveys, or written comments and
between what dates) and need not provide
a detailed description of each instance of
feedback. These proposed regulations also
clarify that the CHNA report may contain
a general summary of the input received.
Thus, for example, a hospital facility may
describe a series of town hall meetings
by noting that four meetings were held
over a three-month period and generally
summarizing the inputreceived, without
necessarily having to provide the specific
dates of each meeting, a list of attendees,
or minutes of the discussion.
Notice 2011–52 stated that a hospital
facility taking into account input from an
organization would be required to iden-
tify in the CHNA report not only the or-
ganization but also the name and title of
at least one individualin the organization
with whom the hospital facility consulted.
Commenters, however, were generally op-
posed to inclusion in the publicly avail-
able CHNA report of the names and roles
of private individuals who gave input into
the CHNA process, noting that the infor-
mation may not add much value to the
overall CHNA but could raise privacy con-
cerns and deter individuals from provid-
ing input. In response to these comments,
these proposed regulations do not specif-
ically require the CHNA report to con-
tain the names or titles of any individu-
als contacted within an organization. In
addition, the proposed regulations specify
that a CHNA report does not need to name
or otherwise individually identify any in-
dividuals participating in community fo-
rums, focus groups, survey samples, or
similar groups.
May 20, 201311202013–21 I.R.B.

However, the Treasury Department
and the IRS continue to believe that a
CHNA report should identify the orga-
nizations that provided input into the
CHNA and summarize the nature and ex-
tent of that input. In addition, a CHNA
report should describe the medically
underserved, low-income, or minority
populations being represented by the or-
ganizations or individuals providing input.
Accordingly, these proposed regulations
provide that a hospital facility’s CHNA
report will be considered to describe how
the hospital facility took into account input
if the CHNA report: (1) summarizes, in
general terms, the input provided and how
and over what time period such input was
provided; (2) provides the names of orga-
nizations providing input and summarizes
the nature and extent of the organization’s
input; and (3) describes the medically
underserved, low-income, or minority
populations being represented by organi-
zations or individuals providing input.
The Treasury Department and the IRS
request comments regarding whether these
proposed rules provide for sufficient dis-
closure regarding the community input
into a CHNA report, or whether the CHNA
report should be required to provide any
other information regarding input pro-
vided, in order to ensure transparency in
the CHNA process.
C. Description of prioritization of the
community’s health needs and of potential
measures and identified resources to
address such needs
With respect to the requirement in
Notice 2011–52 to describe the existing
health care facilities and other resources
within the community available to meet
the health needs identified through the
CHNA, many commenters asked that the
description of these resources be limited
to known or available facilities and re-
sources. These commenters argued that a
community-wide inventory of health care
resources is not the responsibility of any
one hospital facility, but rather a task more
appropriate to public health departments.
Accordingly, these proposed regulations
limit the description of resources available
to address health needs to those known or
identified in the course of conducting the
CHNA.
Additional commenters remarked that
both the prioritization of health needs and
a description of resources available to meet
the health needs identified through the
CHNA are more appropriate in an imple-
mentation strategy than in a CHNA report.
On the other hand, other commenters
noted the importance of community input
in the overall CHNA process and sought
an opportunity to provide input on po-
tential interventions and programs that
may be included in a hospital facility’s
implementation strategy. In fact, such
commenters asked that the implementa-
tion strategy, in addition to the CHNA, be
subject to public input and made widely
available to the public.
The Treasury Department and the IRS
recognize that conducting a CHNA and
developing an implementation strategy are
part of one fluid process, with no definite
point at which the CHNA ends and the
implementation strategy begins. Prioritiz-
ing health needs and identifying potential
measures and resources to address health
needs, for example, could reasonably be
interpreted as part of “assessing” those
health needs or, alternatively, as the first
step in devising a strategy to meet those
needs. Accordingly,these proposed reg-
ulations respond to commenters’ requests
for enhanced transparency and an oppor-
tunity for community input by requiring
items that could reasonably be included
as part of either the CHNA or the im-
plementation strategy to be described in
the CHNA report. Thus, these proposed
regulations require the CHNA report to
include a prioritized description of the
significant health needs of the community
identified through the CHNA, along with
a description of the process and criteria
used in prioritizing these health needs.
These proposed regulations also require
the CHNA report to include a description
of the potential measures and resources
identified through the CHNA to address
the significant health needs.
v. Collaboration on CHNA Reports
Notice 2011–52 stated that the Trea-
sury Department and the IRS intend to
allow a hospital organization to conduct a
CHNA in collaboration with other orga-
nizations, including related organizations,
other hospital organizations, for-profit and
government hospitals, and public health
and other departments of state and local
governments. However, even in cases
where collaboration between hospitals
occurs, Notice 2011–52 stated that the
Treasury Department and the IRS intended
to require each hospital facility to doc-
ument its CHNA in a separate written
report. Many commenters recommended
that when several hospital facilities within
the same defined community work col-
laboratively on a CHNA, they should be
able to issue a joint CHNA report or sep-
arate CHNA reports that are substantively
identical. These commenters argued that
joint reporting would encourage collab-
oration, reduce redundancy and expense,
and provide a more coherent picture of
the community’s health needs. Some of
these commenters suggested that the joint
CHNA report could be required to con-
tain different sections for each particular
hospital facility. On the other hand, other
commenters recommended retaining the
requirement for separate CHNA reports,
noting that facility-level reporting ensures
that information for each hospital facility
is clearly presented and easily accessible.
In balancing these concerns, these pro-
posed regulations provide, generally, that
every hospital facility must document its
CHNA in a separate CHNA report. How-
ever, these proposed regulations provide
that if a hospital facility is collaborating
with other facilities and organizations
in conducting its CHNA or is basing its
CHNA, in part, on a CHNA for all or part
of its community conducted by another
organization, portions of the hospital facil-
ity’s CHNA report may be substantively
identical to the CHNA report of a collabo-
rating hospital facility or the other organi-
zation conducting a CHNA, if appropriate
under the facts and circumstances. For
example, if a hospital facility conducts a
survey of the health needs of residents of
homeless shelters located in the commu-
nity in collaboration with other hospital
facilities, the description of that survey in
the hospital facility’s CHNA report may be
identical to the description contained in the
CHNA reports for the other collaborating
hospital facilities. Similarly, if the state or
local public health department with juris-
diction over the community served by the
hospital facility conducts an inventory of
community health improvement resources
available in that community, the hospital
2013–21 I.R.B.1121May 20, 2013

facility may include that inventory in its
CHNA report.
These proposed regulations also pro-
vide an exception to the general require-
ment of separate CHNA reports: namely,
if a hospital facility collaborates with
other hospital facilities in conducting its
CHNA, all of the collaborating hospital fa-
cilities may produce a joint CHNA report
as long as all of the facilities define their
community to be the same and conduct a
joint CHNA process. In addition, the joint
CHNA report must clearly identify each
hospital facility to which it applies and an
authorized body of each collaborating hos-
pital facility must adopt the joint CHNA
report as its own.
Thus, for example, if a hospital facil-
ity collaborates with nine other hospital fa-
cilities that are all located in and serving
a particular MSA, all ten hospital facili-
ties define their community as constituting
the entire MSA, and all ten hospital facil-
ities conduct a joint CHNA process, the
ten hospital facilities may prepare a joint
CHNA report that identifies all of the col-
laborating hospital facilities by name. Un-
der these proposed regulations, such a joint
CHNA report would satisfy the require-
ment to document the CHNA in a written
CHNA report for any one of the collabo-
rating hospital facilities as long as the joint
CHNA report is adopted by an authorized
body of the hospital facility.
vi. Making the CHNA Report Widely
Available to the Public
Consistent with Notice 2011–52, these
proposed regulations provide that in order
to make its CHNA report widely available
to the public, a hospital facility must post
the CHNA report on the hospital facility’s
Web site or, if the hospital facility does not
have its own Web site separate from the
hospital organization that operates it, on
the hospital organization’s Web site. Al-
ternatively, the hospital facility may post
the CHNA report on a Web site established
and maintained by another entity as long
as either the hospital facility or hospital or-
ganization’s Web site (if the facility or or-
ganization has a Web site) provides a link
to the web page on which the CHNA report
is posted, along with clear instructions for
accessing the report on that Web site. In
addition, the hospital facility must ensure
that individuals with access to the Inter-
net can access, download, view, and print a
hard copy of the CHNA report without re-
quiring special computer hardware or soft-
ware (other than software that is readily
available to members of the public with-
out payment of any fee) and without pay-
ment of a fee to the hospital facility, hos-
pital organization, orother entity maintain-
ing the Web site. Finally, the hospital facil-
ity must provide individuals who ask how
to access a copy of the CHNA report online
with the direct Web site address, or URL,
of the web page on which the document is
posted.
Commenters generally supported the
requirement outlined in Notice 2011–52 to
make the CHNA report widely available
on a Web site. Many of these commenters
believed that this Web posting require-
ment alone was sufficient to make the
CHNA report widely available to the pub-
lic. Others, however, urged the Treasury
Department and the IRS to expand the
requirements for making a CHNA widely
available to the public to require the hos-
pital facility to provide paper copies of the
CHNA report for free to any individual re-
questing it. Some commenters requested a
requirement that the hospital facility iden-
tify strategies to inform various sectors of
the community that the CHNA report is
widely available on a Web site.
A few commenters also recommended
expanding the requirements associated
with making CHNA reports widely avail-
able on a Web site. Some commenters
recommended requiring that the CHNA
reports be conspicuously posted on the
applicable Web site, for example by re-
quiring a highly visible link on the Web
site’s homepage. Another commenter
recommended requiring past, as well as
current, CHNA reports to be posted, to
demonstrate improvement of health care
objectives over the long term. Yet another
commenter recommended requiring that
individuals do not need to provide person-
ally identifiable information or create an
account to access the CHNA report.
Because of the focus on increased trans-
parency of hospital facilities in section
501(r), the Treasury Department and the
IRS have adopted most of the comments
seeking to enhance transparency of a hos-
pital facility’s CHNA by expanding the
requirements to make the CHNA report
widely available to the public. Specif-
ically, these proposed regulations make
four changes to the interim rule described
in Notice 2011–52 for making the CHNA
report widely available to the public. First,
these proposed regulations require a com-
plete version of theCHNAreporttobe
“conspicuously” posted on a Web site, to
ensure that the CHNA report can be easily
located on the Web site. Second, instead
of requiring the CHNA report to be posted
on the Web site until the next CHNA re-
port is posted, these proposed regulations
require the CHNA report to remain on
the Web site until two subsequent CHNA
reports have been posted, so information
on trends will be available to the public.
Third, these proposed regulations add that
an individual must not be required to cre-
ate an account or otherwise be required to
provide personally identifiable informa-
tion in order to access the CHNA report
on a Web site. Fourth, these proposed
regulations add a requirement that a hos-
pital facility must make a paper copy of its
CHNA report available for public inspec-
tion without charge at the hospital facility
at least until the date the hospital facility
has made available for public inspection,
without charge, a paper copy of its two
subsequent CHNAs.
Because the requirement to make a
document “widely available on a Web
site” applies not only to a hospital facil-
ity’s CHNA reports but also, under the
2012 proposed regulations, to its financial
assistance policy and related documents,
the term “widely available on a Web site”
is defined in the definitions section of
these proposed regulations and will apply
to both rules.
Finally, to facilitate the sharing of draft
versions of the CHNA report for comment
as requested by some commenters, these
proposed regulations provide that a hospi-
tal facility will not be considered to have
made the CHNA report widely available
to the public for purposes of determining
the date on which the hospital facility has
conducted the CHNA if it makes widely
available on a Web site (and/or for pub-
lic inspection) a version of the CHNA re-
port that is expressly marked as a draft on
which the public may comment. Thus, a
hospital facility may post a draft CHNA re-
port for public review and comment with-
out starting its next three-year CHNA cy-
cle.
May 20, 201311222013–21 I.R.B.

b.Implementation strategies
Notice 2011–52 noted the intention of
the Treasury Department and the IRS to
define an “implementation strategy” for a
hospital facility as a written plan that ad-
dresses each of the health needs identi-
fied through a CHNA for the facility. No-
tice 2011–52 further provided that an im-
plementation strategy would “address” a
health need identified through a CHNA
if the written plan either: (1) describes
how the hospital facility plans to meet the
health need, or (2) identifies the health
need as one the hospital facility does not
intend to meet and explains why the hos-
pital facility does not intend to meet the
health need.
A number of commenters asked that
the implementation strategy be required to
address only significant or priority health
needs identified through the CHNA. Other
commenters asked if the implementation
strategy could address health needs iden-
tified from a source other than the hospital
facility’s CHNA.
As indicated in section 3.a.ii of this pre-
amble, these proposed regulations limit the
health needs that a hospital facility must
identify through its CHNA to significant
health needs and the health needs cov-
ered in the implementation strategy are
limited to those significant health needs
identified through the CHNA. In addition,
these proposed regulations do not require
a hospital facility to develop a strategy
or plan to address each identified signifi-
cant health need. Rather, consistent with
section 6033(b)(15)(A) of the Code, these
proposed regulations follow the approach
set forth in Notice 2011–52 and clarify that
a hospital facility’s implementation strat-
egy must, with respect to each significant
health need identified through the CHNA,
either: (1) describe how the hospital facil-
ity plans to address the health need; or (2)
identify the health need as one the hospi-
tal facility does not intend to address and
explain why the hospital facility does not
intend to address the health need. Accord-
ingly, an implementation strategy may de-
scribe how the hospital facility plans to ad-
dress only a few of the significant health
needs identified through a CHNA, as long
as it explains why it does not intend to ad-
dress the other identified significant health
needs for which no plan is provided.
Although an implementation strategy
must address the significant health needs
identified through a hospital facility’s
CHNA, these proposed regulations do not
limit an implementation strategy to ad-
dressing only those health needs, and it
may describe activities to address health
needs that the hospital facility identifies in
other ways.
i. Describing How a Hospital Facility
Plans to Address a Significant Health
Need
Commenters recommended that the im-
plementation strategy be required to de-
scribe its intended impact on health out-
comes. Some of these commenters recom-
mended that the descriptions of intended
impacts include short- and long-term mea-
surable goals and objectives, as well as
methods to evaluate the plan’s effective-
ness. One commenter stated that an imple-
mentation strategy should assign an eco-
nomic value to each strategy or activity,
and an aggregate total benefit. Others rec-
ommended requiring the implementation
strategy to include a mechanism to receive
ongoing community feedback.
In describing how a hospital facility
plans to address a significant health need
identified through the CHNA, these pro-
posed regulations adopt some of the com-
menters’ recommendations by requiring
the implementation strategy to describe,
in addition to the actions the hospital fa-
cility intends to take to address the health
need, the anticipated impact of these ac-
tions and the plan to evaluate such impact.
For example, a hospital facility’s CHNA
may identify as significant health needs
financial or other barriers to care in the
community, such as high rates of financial
need or large numbers of uninsured indi-
viduals and families. Its implementation
strategy could describe a program to de-
crease the impact of these barriers, such
as by expanding its financial assistance
program or helping uninsured individu-
als and families learn about and enroll in
sources of insurance such as Medicare,
Medicaid, Children’sHealth Insurance
Program (CHIP), and the new Health In-
surance Marketplaces (also known as the
Exchanges); state how it anticipates its
program will reduce these barriers to care;
and identify the data sources it will use to
track the program’s impact on the barriers.
These proposed regulations also require
the implementation strategy to identify the
programs and resources the hospital facil-
ity plans to commit to address the health
need. Finally, the implementation strat-
egy must describe any planned collabora-
tion between the hospital facility and other
facilities or organizations in addressing the
health need.
While these proposed regulations do
not require the implementation strategy
itself to include any particular mechanism
for community input, they do provide that
a hospital facility must establish an ongo-
ing feedback mechanism by requiring a
hospital facility, in conducting a CHNA,
to take into account written comments
received on its most recently adopted
implementation strategy, as described in
section 3.a.iii.C of this preamble.
ii. Describing Why a Hospital Facility Is
Not Addressing a Significant Health Need
Several commenters sought clarifica-
tion regarding the level of detail required
in the implementation strategy’s explana-
tion of why the hospital facility does not
intend to address a significant health need.
Some of these commenters stated that an
explanation of the prioritization strategy
together with comments noting that an-
other facility or organization is addressing
the health need should be sufficient.
These proposed regulations clarify that
a brief explanation of why a hospital facil-
ity does not intend to address the signifi-
cant health need is sufficient. Some pos-
sible examples of reasons a hospital facil-
ity might offer for not addressing a health
need, include, but are not limited to, re-
source constraints, relative lack of exper-
tise or competency to effectively address
the need, a relatively low priority assigned
to the need, a lack of identified effective
interventions to address the need, and/or
the fact that the need is being addressed by
other facilities or organizations in the com-
munity. This list of possible reasons is not
intended to be exhaustive, and a hospital
facility may provide whatever reasons re-
flect its particular facts and circumstances.
iii. Joint Implementation Strategies
Notice 2011–52 noted that the Trea-
sury Department and the IRS intended
to allow hospital facilities to collaborate
with other facilities and organizations in
2013–21 I.R.B.1123May 20, 2013

developing an implementation strategy
but to still require each hospital facility to
separately document its implementation
strategy. Some commenters requested
that hospital facilities conducting a joint
CHNA should be permitted to adopt a
joint implementation strategy while other
commenters recommended retaining the
requirement for separate implementation
strategies, with each side advancing argu-
ments similar to those advanced for and
against joint CHNA reports.
In balancing these concerns, these pro-
posed regulations state that a hospital facil-
ity may develop an implementation strat-
egy in collaboration with other facilities
and organizations. In addition, these pro-
posed regulations provide that a hospital
facility that collaborates with other facil-
ities or organizations in developing its im-
plementation strategy generally must doc-
ument its implementation strategy in a sep-
arate written plan that is tailored to the hos-
pital facility and takes into account its spe-
cific programs and resources.
However, these proposed regulations
also provide an exception to the general
requirement of separate implementation
strategies: namely, a hospital facility col-
laborating with other hospital facilities
may adopt a joint implementation strategy
as long as it documents its CHNA in a joint
CHNA report (as described in section 3.a.v
of this preamble) and the joint implemen-
tation strategy meets three requirements.
First, the joint implementation strategy
must be clearly identified as applying to
the hospital facility. Second, the joint im-
plementation strategy must clearly identify
the hospital facility’s particular role and
responsibilities in taking the actions de-
scribed in the implementation strategy and
the programs and resources the hospital
facility plans to commit in taking those
actions. Third, the joint implementation
strategy must include a summary or other
tool that helps the reader easily locate
those portions of the joint implementation
strategy that relate to the hospital facility.
iv. When the Implementation Strategy
Must Be Adopted
In order to satisfy the CHNA require-
ments with respect to any taxable year,
section 501(r)(3)(A)(ii) requires a hospital
facility to adopt an implementation strat-
egy to meet the health needs identified
through the CHNA described in section
501(r)(3)(A)(i). Consistent with this statu-
tory language, Notice 2011–52 stated
the intention of the Treasury Department
and the IRS to require a hospital facility
to adopt an implementation strategy to
meet the health needs identified through
aCHNAbytheendofthesametaxable
year in which it conducts that CHNA. A
number of commenters sought additional
time to complete the implementation strat-
egy, in part to accommodate collaborating
hospital facilities with different taxable
years. Most of these commenters recom-
mended that the implementation strategy
should be adopted within 12 months after
completion of the CHNA or by the end of
the next taxable year, rather than by the
end of the same taxable year in which the
CHNA is completed.
Because a hospital facility only has to
conduct a CHNA once every three years
and may begin the CHNA process at any
time during the three-year period, a hospi-
tal facility should have ample time to com-
plete the CHNA earlier in the third taxable
year and adopt an implementation strat-
egy by the end of that same taxable year.
The flexibility afforded by a three-year
cycle should also allow hospital facilities
with different tax years sufficient time to
collaborate. Thus, consistent with Notice
2011–52, these proposed regulations pro-
vide that an authorized body of the hos-
pital facility must adopt the implementa-
tion strategy by the end of the same tax-
able year in which the hospital facility fin-
ishes conducting the CHNA (typically, by
making the CHNA report widely available
to the public). These proposed regulations
also clarify that if a hospital facility be-
gins working on a CHNA in one taxable
year but completes the final required step
for the CHNA (and hence is considered to
have conducted it) in the subsequent tax-
able year, it is not required to adopt the
implementation strategy until the taxable
year in which the CHNA process is con-
sidered conducted, not the year it began.
The Treasury Department and the IRS seek
comments on whether this rule will materi-
ally inhibit the ability of hospital facilities
with different taxableyears to collaborate
with each other or otherwise burden hospi-
tal facilities unnecessarily.
Notwithstanding the general rule that
the implementation strategy must be
adopted in the same taxable year the
CHNA is considered conducted, these
proposed regulations provide transition
relief for the adoption of a hospital facil-
ity’s implementation strategy for its first
CHNA conducted after the effective date
of section 501(r)(3), in recognition of the
fact that certain hospital facilities may not
have a full three years in which to conduct
their first CHNA. This transition relief is
described in section 3.d of this preamble.
c.New hospital facilities
Notice 2011–52 requested comments
regarding when a hospital facility that is
newly acquired or placed into service must
conduct a CHNA. Comments received
on this issue ranged from requiring such
a hospital facility to conduct a CHNA
within the first taxable year of acquisition
or licensing to allowing the facility three
taxable years following the date of acqui-
sition or licensing. In addition, at least
two commenters asked for clarification on
when a for-profit hospital that converts
to section 501(c)(3)status must conduct
a CHNA. Additional commenters asked
if a short taxable year resulting from, for
example, a change in ownership, is con-
sidered a “taxable year” for purposes of
the three-year CHNA cycle.
These proposed regulations provide
that a hospital facility that is newly ac-
quired or placed into service by a hospital
organization, or that becomes newly sub-
ject to section 501(r) because the hospital
organization that operates it is newly rec-
ognized as described in section 501(c)(3),
must conduct a CHNA and adopt an imple-
mentation strategy to meet the community
health needs identified through that CHNA
by the last day of the second taxable year
beginning after the date, respectively, the
hospital facility is acquired or placed into
service, or newly subject to section 501(r).
A short taxable year of less than twelve
months is considered a taxable year for
purposes of section 501(r). Thus, the tax-
able year in which a hospital facility is ac-
quired or placed into service, or becomes
subject to section 501(r), is a taxable year
for purposes of the CHNA requirements,
regardless of whether that taxable year is
less than twelve months. As a result, a
deadline of the last day of the second tax-
able year beginning after the date of ac-
quisition, licensure, or section 501(c)(3)
recognition provides these new hospital fa-
May 20, 201311242013–21 I.R.B.

cilities with three taxable years (even if
less than three full calendar years) to meet
the section 501(r)(3) requirements.
d.Transition rules
A number of commenters requested
various forms of transition relief, noting
the complexity of the new CHNA require-
ments. In particular, a few commenters
asked if a CHNA conducted before the
effective date of the CHNA requirements
could satisfy the CHNA requirements for
a taxable year beginning after the effective
date (that is, for a taxable year beginning
after March 23, 2012). In addition, sev-
eral commenters specifically requested
transition relief with respect to the first
implementation strategy adopted after the
effective date of the CHNA requirements.
The suggestions for transition relief for
the adoption of the first implementation
strategy ranged from 30 to 60 days after
the end of the taxable year in which the
CHNA was conducted to the end of the
taxable year following the taxable year in
which the CHNA was conducted. In re-
sponse to these comments, these proposed
regulations provide transition relief that is
tailored to the taxable year after March 23,
2010, in which a hospital facility conducts
its first CHNA.
i. CHNA Conducted in Taxable Year
Beginning Before March 23, 2012
These proposed regulations provide
that a hospital facility that conducted a
CHNAdescribedinsection501(r)(3)in
either of its first two taxable years be-
ginning after March 23, 2010, does not
need to meet the requirements of section
501(r)(3) again until the third taxable year
following the taxable year in which the
hospital facility conducted the CHNA. To
qualify for this transition relief, the hospi-
tal facility must adopt an implementation
strategy to meet the community health
needs identified through the CHNA con-
ducted in its first taxable year beginning
after March 23, 2010 or 2011 on or before
the 15th day of the fifth calendar month
following the close of its first taxable year
beginning after March 23, 2012. Thus, for
example, if a hospital facility reporting on
a calendar-year basis conducts a CHNA in
2012 and adopts an implementation strat-
egy for that CHNA on or before May 15,
2014, it does not need to meet the section
501(r)(3) requirements again until 2015.
ii. CHNA Conducted in First Taxable
Year Beginning after March 23, 2012
If a hospital facility conducts a CHNA
described in section 501(r)(3) in its first
taxable year beginning after March 23,
2012, these proposed regulations provide
that the hospital facility will be deemed
to satisfy the requirement to adopt an
implementation strategy in the same tax-
able year the CHNA is conducted if an
authorized body of thehospital facility
adopts an implementation strategy to meet
the community health needs identified
through that CHNA on or before the 15th
day of the fifth calendar month following
the close of its first taxable year beginning
after March 23, 2012.
4.Reporting Requirements Related to
CHNAs
Notice 2011–52 stated the intention of
the Treasury Department and the IRS to
require a hospital organization to attach
to its annual information return (Form
990) the most recently adopted implemen-
tation strategy for each of the hospital
facilities it operates. A few commenters
stated that, rather than require the entire
implementation strategy to be attached to
the Form 990, the Treasury Department
and the IRS should permit a narrative
summary description of the contents of its
implementation strategy to be provided on
the Form 990. One of these commenters
noted that the implementation strategy is
only required to be updated every three
years, so in many instances a narrative
may provide more relevant and timely in-
formation. A number of other commenters
recommended requiring the implementa-
tion strategy to be made widely available
to the public, rather than merely attached
to the Form 990, in order to encourage
greater transparency and provide an op-
portunity for public input and comment.
These proposed regulations allow a
hospital organization either to attach to
its Form 990 a copy of the most recently
adopted implementation strategy for each
hospital facility it operates or to provide
on the Form 990 the URL(s) of the web
page(s) on which it has made each im-
plementation strategy widely available on
a Web site. An implementation strategy
must describe, with respect to each sig-
nificant health need identified through the
CHNA, how the hospital facility plans
to address the health need or why the
hospital facility does not intend to ad-
dress the health need. Similarly, section
6033(b)(15)(A) requires a hospital organ-
ization to furnish annually information
setting forth a “description of how the
organization is addressing the needs iden-
tified in each” CHNA and “a description
of any such needs that are not being ad-
dressed together with the reasons why
such needs are not being addressed.” Thus,
the requirement in these proposed regula-
tions to attach the implementation strategy
to the Form 990, or provide on the Form
990 the URL where the implementation
strategy is made widely available on a
Web site, partially implements section
6033(b)(15)(A).
However, the requirement in section
6033(b)(15)(A) also encompasses an an-
nual, up-to-date description of the actions
actually taken by a hospital facility during
the taxable year to address the significant
health needs identified through the most
recently conducted CHNA (which, pre-
sumably, will typically be steps taken dur-
ing a taxable year to execute the hospital
facility’s most recently adopted imple-
mentation strategy). Accordingly, these
proposed regulations require a hospital
organization to provide annually on the
Form 990 a description of the actions taken
during the taxable year to address the sig-
nificant health needs identified through
its most recent CHNA for each hospital
facility it operates or, if no actions were
taken with respect to one or more of these
health needs, the reason or reasons why
no actions were taken.
These proposed regulations also
reiterate the requirement of section
6033(b)(15)(B) that a hospital organiza-
tion attach to its Form 990 a copy of its
audited financial statements for the taxable
year — or in the case of an organization the
financial statements of which are included
in consolidated financial statements with
other organizations, such consolidated
financial statements. The Treasury De-
partment and the IRS request comments
regarding whether hospital organizations
whose financial statements are included in
consolidated financial statements should
be able to redact financial information
2013–21 I.R.B.1125May 20, 2013

about any taxable organizations that are
members of the consolidated group.
Finally, consistent with section
6033(b)(10), these proposed regulations
require a hospital organization to disclose
the amount of the excise tax imposed on
the organization under section 4959 dur-
ing the taxable year for failures to meet
the requirements of section 501(r)(3).
A few commenters requested clarifica-
tion regarding whether government hospi-
tals will continue to be excepted from these
and other Form 990 reporting require-
ments under Rev. Proc. 95–48, 1995–2
C.B. 418. In Rev. Proc. 95–48, the IRS
exercised its discretionary authority under
section 6033(a)(3)(B) to relieve certain
governmental units and affiliates of gov-
ernmental units from the requirement to
file a Form 990. The Affordable Care Act
did not change the requirements regarding
which organizations are required to file
a Form 990. Accordingly, a government
hospital (other than one that is described
in section 509(a)(3)) that has been excused
from filing a Form 990 under Rev. Proc.
95–48 or a successor revenue procedure is
not required to file a Form 990. Because
government hospitals described in Rev.
Proc. 95–48 (other than those described
in section 509(a)(3)) are relieved from
the annual filing requirements under sec-
tion 6033, they are also relieved from any
new reporting requirements imposed on
hospital organizations by these proposed
regulations under section 6033, including
under sections 6033(b)(10)(D) and (b)(15)
and the proposed requirement to attach
one or more implementation strategies to
a Form 990.
5.Excise Tax on Failure to Meet CHNA
Requirements
Section 4959 imposes a $50,000 excise
tax on a hospital organization that fails to
meet the CHNA requirements of section
501(r)(3) with respectto any taxable year.
Notice 2011–52 indicated the intent of
the Treasury Department and the IRS to
impose the $50,000 tax with respect to
a failure by a hospital facility to satisfy
section 501(r)(3) in any three-year period,
making it possible for the excise tax to ap-
ply in sequential years. Notice 2011–52
provided an example of a hospital organ-
ization that reports on a calendar-year ba-
sis and operates only one hospital facility,
which is subject to the $50,000 excise tax
in 2013 because the hospital facility failed
to conduct a CHNA in 2011, 2012, and
2013. If the hospital facility again fails to
conduct a CHNA by the last day of 2014,
Notice 2011–52 noted the hospital organi-
zation will again be subject to the $50,000
excise tax in 2014 for the hospital facil-
ity’s failure to conduct a CHNA in 2012,
2013, and 2014. These proposed regula-
tions include this example of the applica-
tion of the section 4959 excise tax and con-
firm that the excise tax may be imposed
for each taxable year that a hospital facility
fails to meet the section 501(r)(3) require-
ments. These proposed regulations also
make clear that the excise tax may be im-
posed in addition to any tax imposed on a
noncompliant hospital facility as described
in section 2.d of this preamble or that re-
sults from revocation of a hospital organi-
zation’s section 501(c)(3) status.
In addition, Notice 2011–52 stated the
intention of the Treasury Department and
the IRS to apply the section 4959 excise
tax separately with respect to each hos-
pital facility’s failure to meet the CHNA
requirements. Thus, if a hospital organ-
ization that operates two hospital facili-
ties fails to meet the requirements of sec-
tion 501(r)(3) with respect to both facilities
in any taxable year, the hospital organiza-
tion will be subject to a total excise tax of
$100,000 ($50,000 for each hospital facil-
ity) for that taxable year.
At least one commenter argued that
applying the $50,000 excise tax on a fa-
cility-by-facility basis is inconsistent with
the statutory language in section 4959 that
“there is imposed on the organization a tax
equal to $50,000.” On the other hand, two
commenters explicitly supported applying
the section 4959 excise tax at the hospital
facility level. One of these commenters
expressed concern that if the $50,000
excise tax were imposed on a hospital
organization without regard to the number
of hospital facilities it operates that have
failed the section 501(r)(3) requirements,
a hospital organization operating multiple
facilities may choose to pay the tax rather
than conduct a CHNA and adopt an im-
plementation strategy for every facility it
operates.
The Treasury Department and the IRS
note that section 501(r)(2)(B)(i) requires
a hospital organization operating more
than one hospital facility to meet the
CHNA requirements “separately with re-
spect to each such facility” and section
501(r)(2)(B)(ii) suggests that one hospital
organization can fail to meet the CHNA
requirements separately with respect to
each hospital facility. Thus, a hospital
organization with multiple hospital facil-
ities can “fail[] to meet the requirements
of section 501(r)(3)” within the meaning
of section 4959 separately with respect to
each hospital facility. Accordingly, these
proposed regulations adopt the approach
in Notice 2011–52 of applying the excise
tax on a facility-by-facility basis.
One commenter requested clarification
that the excise tax will be imposed on any
hospital organization that fails to satisfy
any requirement under section 501(r)(3),
including the requirement to adopt an
implementation strategy, and is not lim-
ited to a failure related to conducting
the CHNA. These proposed regulations,
in adopting the approach taken in No-
tice 2011–52, clarify that the excise tax
is imposed on a failure to meet any of
the requirements under section 501(r)(3),
including the requirement to adopt an im-
plementation strategy described in section
501(r)(3)(A)(ii).
Effective/Applicability Dates
The 2012 proposed regulations under
section 501(r)(4) through (r)(6) were pro-
posed to apply for taxable years begin-
ning on or after the date those rules are
published in theFederal Registeras fi-
nal or temporary regulations. By con-
trast, these proposed regulations provide
that both these proposed regulations and
the 2012 proposed regulations will gener-
ally be effective on the date these rules are
published in theFederal Registeras final
or temporary regulations. Providing for
an immediate effective date gives immedi-
ate effect to the transition relief described
in §1.501(r)–3(e) and will also allow the
Treasury Department and the IRS to con-
sider transition relief for the requirements
under §1.501(r)–4 through §1.501(r)–6 of
the 2012 proposed regulations based on
the estimated amount of time to come into
compliance with those rules rather than a
particular hospital organization’s taxable
year. The proposed regulations under sec-
tions 6033(b)(10) and (b)(15)(A) are pro-
posed to be effective for returns filed on or
after the date these rules are published in
May 20, 201311262013–21 I.R.B.

theFederal Registeras final or temporary
regulations.
A hospital facility may rely on
§1.501(r)–3 of these proposed regulations
for any CHNA conducted or implemen-
tation strategy adopted on or before the
date that is six months after the date these
proposed regulations are published as final
or temporary regulations in theFederal
Register. As provided in Notice 2011–52,
hospital organizations may continue to
rely on the interim rules described in No-
tice 2011–52 for any CHNA conducted
or implementation strategy adopted on or
before October 5, 2013, which is the date
that is six months after these proposed
regulations are published. After October
5, 2013, Notice 2011–52 is obsolete. The
Treasury Department and the IRS invite
comments on whether, and what type of,
additional transitional relief may be nec-
essary.
Hospital organizations should note
that the statutory effective date of section
501(r)(3) is a hospital organization’s first
taxable year beginning after March 23,
2012. The effectivedatefortheother
requirements under section 501(r) is a
hospital organization’s first taxable year
beginning after March 23, 2010.
Availability of IRS Documents
IRS notices, revenuerulings, and rev-
enue procedures cited in this preamble are
made available by the Superintendent of
Documents, U.S. Government Printing Of-
fice, Washington, DC 20402.
Special Analyses
It has been determined that this notice
of proposed rulemaking is not a significant
regulatory action as defined in Executive
Order 12866, as supplemented by Execu-
tive Order 13563. Therefore, a regulatory
assessment is not required. It also has been
determined that section 553(b) of the Ad-
ministrative Procedure Act (5 U.S.C. chap-
ter 5) does not apply to this proposed reg-
ulation. It is hereby certified that the col-
lection of information in these regulations
will not have a significant economic im-
pact on a substantial number of small en-
tities. The collection of information is in
§1.501(r)–3 and §1.6033–2(a)(2)(ii)(l)of
the regulations. This certification is based
on the following:
Consistent with the requirements im-
posed by statute, §1.501(r)–3 of the regu-
lations requires hospital facilities to con-
duct a CHNA and adopt an implemen-
tation strategy. However, these require-
ments need only be satisfied once over
a period of three taxable years. More-
over, some hospital facilities already con-
duct similar community needs assessments
under state law, and the Treasury Depart-
ment and the IRS expect that these facili-
ties will be able to draw upon pre-existing
processes and resources to some extent.
Consistent with the requirements im-
posed by statute, §1.6033–2(a)(2)(ii)(l)of
the regulations requires affected organiza-
tions to report annually on a Form 990 ac-
tions taken during the year to address com-
munity health needs and to attach audited
financial statements to the Form 990. To
assist the IRS and the public, the regula-
tions also require affected organizations to
attach to the Form 990 a copy of the most
recently adopted implementation strategy
or provide the URL of a web page where
it is available to the public. For affected
organizations, the burden of providing ei-
ther a copy of the implementation strategy
or the address of a Web site where it can
be found will be minimal. Consequently,
the regulations do not add to the impact
on small entities imposed by the statutory
scheme.
For these reasons, the collection of in-
formation in this regulation that is sub-
ject to the Regulatory Flexibility Act will
not impose a significant economic bur-
den upon the affected organizations. Ac-
cordingly, a Regulatory Flexibility Analy-
sis under the Regulatory Flexibility Act (5
U.S.C. chapter 6) is not required. Pursuant
to section 7805(f) of the Code, this regula-
tion has been submitted to the Chief Coun-
sel for Advocacy of the Small Business
Administration for comment on its impact
on small entities.
Comments and Requests for Public
Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any comments that are
submittedtimelytotheIRSasprescribed
in this preamble under “Addresses.” The
Treasury Department and the IRS request
comments on all aspects of the proposed
rules. All comments will be available at
www.regulations.govor upon request.
A public hearing will be scheduled if
requested in writing by any person that
timely submits written comments. If a
public hearing is scheduled, notice of the
date, time, and place for the public hearing
will be published in theFederal Register.
Drafting Information
The principal authors of these proposed
regulations are Preston J. Quesenberry
and Amy F. Giuliano, Office of the Chief
Counsel (Tax-Exempt and Government
Entities). However, other personnel from
the Treasury Department and the IRS
participated in their development.
*****
Proposed Amendments to the
Regulations
Accordingly, 26 CFR parts 1 and 53 are
proposed to be amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.501(r)–0 as proposed
to be amended at 77 FR 38160 (June 26,
2012) is proposed to be further amended
as follows:
1. Adding a new entry to §1.501(r)–1,
paragraph (c).
2. Adding new entries to §1.501(r)–2
and §1.501(r)–3.
3. Revising the entry to §1.501(r)–7.
The revision and additions to read as
follows:
§1.501(r)–0 Outline of regulations.
*****
§1.501(r)–1 Definitions.
*****
(c) Additional definitions.
(1) Authorized body of a hospital facil-
ity.
(2) Operating a hospital facility.
(3) Partnership agreement.
(4) Widely available on a Web site.
2013–21 I.R.B.1127May 20, 2013

§1.501(r)–2 Failures to satisfy section
501(r).
(a) Revocation of section 501(c)(3) sta-
tus.
(b) Minor and inadvertent omissions
and errors.
(c) Excusing certain failures if hospital
facility corrects and discloses.
(d) Taxation of noncompliant hospital
facilities.
(1) In general.
(2) Noncompliant facility income.
(3) No aggregation.
(4) Interaction with other Code provi-
sions.
§1.501(r)–3 Community health needs
assessments.
(a) In general.
(b) Conducting a CHNA.
(1) In general.
(2) Date a CHNA is conducted.
(3) Community served by the hospital
facility.
(4) Assessing community health needs.
(5) Persons representing the broad in-
terests of the community.
(6) Medically underserved populations.
(7) Documentation of a CHNA.
(8) Making the CHNA report widely
available to the public.
(c) Implementation strategy.
(1) In general.
(2) Description of how the hospital fa-
cility plans to address a significant health
need.
(3) Description of why a hospital facil-
ity is not addressinga significant health
need.
(4) Joint implementation strategies.
(5) When the implementation strategy
must be adopted.
(d) New hospital facilities.
(e) Transition rules.
(1) CHNA conducted in taxable year
beginning before March 23, 2012.
(2) CHNA conducted in first taxable
year beginning after March 23, 2012.
*****
§1.501(r)–7 Effective/applicability dates.
(a) Effective/applicability date.
(b) Reliance and transition period.
Par. 3. Section 1.501(r)–1 as proposed
to be amended at 77 FR 38160 (June 26,
2012) is proposed to be further amended
by revising paragraphs (b)(15) and (b)(16)
and adding new paragraph (c) to read as
follows:
§1.501(r)–1 Definitions.
*****
(b) * * *
(15)Hospital facilitymeans a facility
that is required by a state to be licensed,
registered, or similarly recognized as a
hospital. Multiple buildings operated un-
der a single state license are considered to
be a single hospital facility. For purposes
of this paragraph (b)(15), the term “state”
includes only the 50 states and the District
of Columbia and not any U.S. territory or
foreign country. References to a hospital
facility taking actions include instances in
which the hospital organization operating
the hospital facility takes actions through
or on behalf of the hospital facility.
(16)Hospital organizationmeans an
organization recognized (or seeking to
be recognized) as described in section
501(c)(3) that operates one or more hospi-
tal facilities. If the section 501(c)(3) status
of such an organization is revoked, the
organization will, for purposes of section
4959, continue to be treated as a hospital
organization during the taxable year in
which such revocation becomes effective.
*****
(c)Additional definitions—(1)Autho-
rized body of a hospital facilitymeans—
(i) The governing body (that is, the
board of directors, board of trustees, or
equivalent controlling body) of the hospi-
tal organization that operates the hospital
facility, or a committee of, or other party
authorized by, that governing body to the
extent such committee or other party is
permitted under state law to act on behalf
of the governing body; or
(ii) If the hospital facility has its own
governing body and is recognized as an en-
tity under state law but is a disregarded en-
tity for federal tax purposes, the governing
body of that hospital facility, or a commit-
tee of, or other party authorized by, that
governing body to the extent such commit-
tee or other party is permitted under state
law to act on behalf of the governing body.
(2)Operating a hospital facilityin-
cludes operating the facility through the
organization’s own employees or contract-
ing out to another organization to operate
the facility. For example, if an organi-
zation hires a management company to
operate the facility, the hiring organization
is considered to operate the facility. An or-
ganization also operates a hospital facility
if it is the sole member or owner of a dis-
regarded entity that operates the hospital
facility. In addition, an organization oper-
ates a hospital facility if it owns a capital
or profits interest in, or is a member of,
a joint venture, limited liability company,
or other entity treated as a partnership for
federal income tax purposes that operates
the hospital facility unless either—
(i) The organization does not have con-
trol over the operation of the hospital fa-
cility sufficient to ensure that the operation
of the hospital facility furthers an exempt
purpose described in section 501(c)(3) and
thus treats the operation of the hospital fa-
cility, including the facility’s provision of
medical care, as an unrelated trade or busi-
ness described in section 513(a) with re-
spect to the hospital organization; or
(ii) At all times since March 23, 2010,
the organization has been organized and
operated primarily for educational or sci-
entific purposes and has not engaged pri-
marily in the operation of one or more hos-
pital facilities and, pursuant to a partner-
ship agreement entered into prior to March
23, 2010,—
(A) Does not own more than 35 per-
cent of the capital or profits interest in
the partnership (determined in accordance
with section 707(b)(3));
(B) Does not own a general partner in-
terest, managing-member interest, or sim-
ilar interest in the partnership; and
(C) Does not have control over the op-
eration of the hospitalfacility sufficient to
ensure that the hospital facility complies
with the requirementsof section 501(r).
(3)Partnership agreement,forpur-
poses of paragraph (c)(2)(ii) of this sec-
tion, includes all written agreements
among the partners, or between one or
more partners and the partnership, con-
cerning affairs of the partnership and
responsibilities of the partners, whether or
not embodied in a document referred to by
the partners as the partnership agreement,
entered into before March 23, 2010. A
partnership agreement also includes any
modifications to the agreement agreed to
by all partners, or adopted in any other
manner provided by the partnership agree-
ment, but no such modifications adopted
May 20, 201311282013–21 I.R.B.

on or after March 23, 2010, that affect
whether or not the agreement is described
in paragraph (c)(2)(ii) of this section. In
addition, a partnership agreement includes
provisions of federal, state, or local law,
as in effect before March 23, 2010, that
govern the affairs of the partnership or are
considered under such law to be part of
the partnership agreement.
(4)Widely available on a Web site
means—
(i) The hospital facility conspicuously
posts a complete and current version of the
document on—
(A) The hospital facility’s Web site;
(B) If the hospital facility does not have
its own Web site separate from the hospital
organization that operates it, the hospital
organization’s Web site; or
(C) A Web site established and main-
tained by another entity, but only if the
Web site of the hospital facility or hospi-
tal organization (if the facility or organi-
zation has a Web site) provides a conspic-
uously-displayed link to the web page on
which the document is posted, along with
clear instructions for accessing the docu-
ment on that Web site;
(ii) Individuals with access to the Inter-
net can access, download, view, and print a
hard copy of the document without requir-
ing special computer hardware or software
(other than software that is readily avail-
able to members of the public without pay-
ment of any fee); without payment of a fee
to the hospital facility, hospital organiza-
tion, or other entity maintaining the Web
site; and without creating an account or be-
ing otherwise required to provide person-
ally identifiable information; and
(iii) The hospital facility provides indi-
viduals who ask how to access a copy of
the document online with the direct Web
site address, or URL, of the web page on
which the document is posted.
Par. 4. Sections 1.501(r)–2 and
1.501(r)–3 are added to read as follows:
§1.501(r)–2 Failures to satisfy section
501(r).
(a)Revocation of section 501(c)(3) sta-
tus. Except as otherwise provided in para-
graphs (b) and (c) of this section, a hospi-
tal organization failing to meet one or more
of the requirements of section 501(r) sepa-
rately with respect to one or more hospital
facilities it operates may have its section
501(c)(3) status revoked as of the first day
of the taxable year in which the failure oc-
curs. In determiningwhether to continue
to recognize the section 501(c)(3) status of
a hospital organization that fails to meet
one or more of the requirements of section
501(r) with respect to one or more hospi-
tal facilities, the Commissioner will con-
sider all relevant facts and circumstances
including, but not limited to, the follow-
ing—
(1) Whether the organization has pre-
viously failed to meet the requirements of
section 501(r), and, ifso, whether the same
type of failure previously occurred;
(2) The size, scope, nature, and signifi-
cance of the organization’s failure(s);
(3) In the case of an organization that
operates more than one hospital facility,
the number, size, and significance of the
facilities that have failed to meet the sec-
tion 501(r) requirements relative to those
that have complied with these require-
ments;
(4) The reason for the failure(s);
(5) Whether the organization had, prior
to the failure(s), established practices and
procedures (formal or informal) reason-
ably designed to promote and facilitate
overall compliance with the section 501(r)
requirements;
(6) Whether the practices and proce-
dures had been routinely followed and the
failure(s) occurred through an oversight or
mistake in applying them;
(7) Whether the organization has imple-
mented safeguards that are reasonably cal-
culated to prevent similar failures from oc-
curring in the future;
(8) Whether the organization corrected
the failure(s) as promptly after discovery
as is reasonable given the nature of the
failure(s); and
(9) Whether the organization took the
measures described in paragraphs (a)(7)
and (a)(8) of this section before the Com-
missioner discovered the failure(s).
(b)Minor and inadvertent omissions
and errors. A hospital facility’s omis-
sion of required information from a policy
or report described in §1.501(r)–3 or
§1.501(r)–4, or error with respect to the
implementation or operational require-
ments described in §1.501(r)–3 through
§1.501(r)–6, will not be considered a fail-
ure to meet a requirement of section 501(r)
if—
(1) Such omission or error was minor,
inadvertent, and due to reasonable cause;
and
(2) The hospital facility corrects such
omission or error as promptly after discov-
ery as is reasonable given the nature of the
omission or error.
(c)Excusing certain failures if hospital
facility corrects and discloses.Pursuant
to guidance set forth by revenue proce-
dure, notice, or other guidance published
in the Internal Revenue Bulletin, a hospi-
tal facility’s failure to meet one or more of
the requirements described in §1.501(r)–3
through §1.501(r)–6 that is neither will-
ful nor egregious shall be excused for pur-
poses of this section if the hospital facil-
ity corrects and makes disclosure in accor-
dance with the rules set forth in the guid-
ance. If a hospital facility’s failure was
willful or egregious, the failure will not be
excused, even if the hospital facility cor-
rects and makes disclosure in accordance
with the guidance, and no presumption will
be created by a hospital facility’s correc-
tion and disclosure that the failure was nei-
ther willful nor egregious. For purposes
of this paragraph (c), willful is to be inter-
preted consistent with the meaning of that
term in the context of civil penalties, which
would include a failure due to gross neg-
ligence, reckless disregard, or willful ne-
glect. Furthermore, notwithstanding a hos-
pital facility’s compliance with such future
guidance, a hospital facility may, in the
discretion of the IRS, be subject to an ex-
cise tax under section 4959 for failures to
meet the requirements of section 501(r)(3).
(d)Taxation of noncompliant hospital
facilities—(1)In general. Except as oth-
erwise provided in paragraphs (b) and (c)
of this section, if a hospital organization
that operates more than one hospital facil-
ity fails to meet one or more of the require-
ments of section 501(r) separately with re-
spect to a hospital facility during a taxable
year, the income derived from the non-
compliant hospital facility (“noncompliant
facility income”) during that taxable year
will be subject to tax computed as provided
in section 11 (or as provided in section 1(e)
if the hospital organization is a trust de-
scribed in section 511(b)(2)), but substi-
tuting “noncompliant facility income” for
“taxable income,” if—
(i) The hospital organization continues
to be recognized as described in section
501(c)(3) during the taxable year, but
2013–21 I.R.B.1129May 20, 2013

(ii) The hospital organization would not
continue to be recognized as described in
section 501(c)(3) during the taxable year
based on the facts and circumstances de-
scribed in paragraph (a) of this section (but
disregarding paragraph (a)(3)) if the non-
compliant hospital facility were the only
hospital facility operated by the organiza-
tion.
(2)Noncompliant facility income—(i)
In general. For purposes of this paragraph
(d), the noncompliant facility income de-
rived from a hospital facility during a tax-
able year will be the gross income derived
from that hospital facility during the tax-
able year, less the deductions allowed by
chapter 1 of the Internal Revenue Code
(Code) that are directly connected to the
operation of that hospital facility during
the taxable year, excluding any gross in-
come and deductions taken into account in
computing any unrelated business taxable
income described in section 512 that is de-
rived from the facility during the taxable
year.
(ii)Directly connected deductions.For
purposes of this paragraph (d), to be di-
rectly connected with the operation of a
hospital facility that has failed to meet the
requirements of section 501(r), an item of
deduction must have proximate and pri-
mary relationship to the operation of the
hospital facility. Expenses, depreciation,
and similar items attributable solely to the
operation of a hospital facility are proxi-
matelyandprimarilyrelatedtosuchoper-
ation, and therefore qualify for deduction
to the extent that they meet the require-
ments of section 162, section 167, or other
relevant provisions of the Code. Where
expenses, depreciation, and similar items
are attributable to a noncompliant hospi-
tal facility and other hospital facilities op-
erated by the hospital organization (and/or
to other activities of the hospital organiza-
tion unrelated to the operation of hospital
facilities), such items shall be allocated be-
tween the hospital facilities (and/or other
activities) on a reasonable basis. The por-
tion of any such item so allocated to a non-
compliant hospital facility is proximately
andprimarilyrelatedtotheoperationof
that facility and shall be allowable as a
deduction in computing the facility’s non-
compliant facility income in the manner
and to the extent it would meet the require-
ments of section 162, section 167, or other
relevant provisions of the Code.
(3)No aggregation. In computing the
noncompliant facility income of a hospital
facility, the gross income from (and the de-
ductions allowed with respect to) the hos-
pital facility may not be aggregated with
the gross income from (and the deductions
allowed with respect to) the hospital organ-
ization’s other noncompliant hospital fa-
cilities subject to tax under this paragraph
(d) or its unrelated trade or business activ-
ities described in section 513.
(4)Interaction with other Code pro-
visions—(i)Hospital organization op-
erating a noncompliant hospital facility
continues to be treated as tax-exempt.A
hospital organization operating a noncom-
pliant hospital facility subject to tax under
this paragraph (d) shall continue to be
treated as an organization that is exempt
from tax under section 501(a) because it is
described in section 501(c)(3) for all pur-
poses of the Code. Thus, for example, the
application of this paragraph (d) shall not,
by itself, affect the tax-exempt status of
bonds issued to finance the noncompliant
hospital facility.
(ii)Noncompliant hospital facility op-
erated by a tax-exempt hospital organi-
zation is subject to tax. A noncompli-
ant hospital facility described in paragraph
(d)(1) of this section is subject to tax under
this paragraph (d), notwithstanding the fact
that the hospital organization operating the
hospital facility is otherwise exempt from
tax under section 501(a) and subject to tax
under section 511(a) and that §1.11–1(a) of
this chapter states such organizations are
not liable to the tax imposed under section
11.
(iii)Noncompliant hospital facility not
a business entity. A noncompliant hospi-
tal facility subject to tax under this para-
graph (d) is not considered a business en-
tity for purposes of §301.7701–2(b)(7) of
this chapter.
§1.501(r)–3 Community health needs
assessments.
(a)In general. With respect to any tax-
able year, a hospital organization meets the
requirements of section 501(r)(3) with re-
spect to a hospital facility it operates only
if—
(1) The hospital facility has conducted
a community health needs assessment
(CHNA) that meets the requirements of
paragraph (b) of this section in such tax-
able year or in either of the two taxable
years immediately preceding such taxable
year; and
(2) An authorized body of the hospital
facility (as defined in §1.501(r)–1(c)(1))
has adopted an implementation strategy to
meet the community health needs identi-
fied through the CHNA, as described in
paragraph (c) of this section, by the end of
the taxable year in which the hospital fa-
cility conducts the CHNA.
(b)Conducting a CHNA—(1)In gen-
eral. To conduct a CHNA for purposes of
paragraph (a) of this section, a hospital fa-
cility must complete all of the following
steps—
(i) Define the community it serves;
(ii) Assess the health needs of that com-
munity;
(iii) In assessing the health needs of the
community, take into account input from
persons who represent the broad interests
of that community, including those with
special knowledge of or expertise in public
health;
(iv) Document the CHNA in a written
report (“CHNA report”) that is adopted for
the hospital facility by an authorized body
of the hospital facility; and
(v) Make the CHNA report widely
available to the public.
(2)Date a CHNA is conducted.For
purposes of this section, a hospital facil-
ity will be considered to have conducted
a CHNA on the date it has completed all
of the steps described in paragraph (b)(1)
of this section. Solely for purposes of de-
termining the date on which a CHNA has
been conducted, a hospital facility will be
considered to have made the CHNA report
widely available to the public on the date it
first makes the CHNA report widely avail-
able to the public as described in paragraph
(b)(8)(i) of this section.
(3)Community served by the hospi-
tal facility. Indefiningthecommunityit
serves for purposes of paragraph (b)(1)(i)
of this section, a hospital facility may take
into account all of the relevant facts and
circumstances, including the geographic
area served by the hospital facility, target
populations served (for example, children,
women, or the aged), and principal func-
tions (for example, focus on a particular
specialty area or targeted disease). A hos-
pital facility may define its community
to include populations in addition to its
patient populations and geographic areas
May 20, 201311302013–21 I.R.B.

outside of those in which its patient popu-
lations reside. However, a hospital facility
may not define its community to exclude
medically underserved, low-income, or
minority populations who are part of its
patient populations, live in geographic ar-
eas in which its patient populations reside
(unless they are not part of the hospital fa-
cility’s target populations or affected by its
principal functions), or otherwise should
be included based on the method the hos-
pital facility uses to define its community.
In addition, if a hospital facility’s method
of defining its community takes into ac-
count patient populations, the hospital
facility must treat as patients all individ-
uals who receive care from the hospital
facility, without regard to whether (or how
much) they or their insurers pay for the
care received or whether they are eligible
for assistance under the hospital facility’s
financial assistance policy.
(4)Assessing community health needs.
To assess the health needs of the commu-
nity it serves for purposes of paragraph
(b)(1)(ii) of this section, a hospital facil-
ity must identify significant health needs
of the community, prioritize those health
needs, and identify potential measures
and resources (such as programs, organi-
zations, and facilities in the community)
available to address the health needs.
For these purposes, the health needs of
a community include requisites for the
improvement or maintenance of health
status in both the community at large and
in particular parts of the community (such
as particular neighborhoods or popula-
tions experiencing health disparities). A
hospital facility may determine whether
a health need is significant based on all
of the facts and circumstances present in
the community it serves. In addition, a
hospital facility may use any criteria to
prioritize the significant health needs it
identifies, including, but not limited to, the
burden, scope, severity, or urgency of the
health need; the estimated feasibility and
effectiveness of possible interventions; the
health disparities associated with the need;
or the importance the community places
on addressing the need.
(5)Persons representing the broad in-
terests of the community.Totakeinto
account input from persons who repre-
sent the broad interests of the community
it serves (including those with special
knowledge of or expertise in public health)
for purposes of paragraph (b)(1)(iii) of
this section, a hospital facility must take
into account input from the sources listed
in paragraphs (b)(5)(i), (b)(5)(ii), and
(b)(5)(iii) of this section in assessing the
health needs of its community. Input from
these persons includes, but is not limited
to, input on any financial and other bar-
riers to access to care in the community.
In addition, a hospital facility may take
into account input from a broad range of
persons located in or serving its commu-
nity, including, but not limited to, health
care consumers and consumer advocates,
nonprofit and community-based organiza-
tions, academic experts, local government
officials, local schooldistricts, health care
providers and community health centers,
health insurance and managed care orga-
nizations, private businesses, and labor
and workforce representatives. A hospi-
tal facility must take into account input
from the following sources in assessing
the health needs of its community—
(i) At least one state, local, tribal, or re-
gional governmental public health depart-
ment (or equivalent department or agency)
with knowledge, information, or expertise
relevant to the health needs of that commu-
nity;
(ii) Members of medically underserved,
low-income, and minority populations in
the community served by the hospital fa-
cility, or individuals or organizations serv-
ingorrepresentingtheinterestsofsuch
populations; and
(iii) Written comments received on the
hospital facility’s most recently conducted
CHNA and most recently adopted imple-
mentation strategy.
(6)Medically underserved populations.
For purposes of this paragraph (b), med-
ically underserved populations include
populations experiencing health dispari-
ties or at risk of not receiving adequate
medical care as a result of being uninsured
or underinsured or due to geographic, lan-
guage, financial, or other barriers.
(7)Documentation of a CHNA—(i)
In general. For purposes of paragraph
(b)(1)(iv) of this section, the CHNA report
adopted for the hospital facility by an au-
thorized body of the hospital facility must
include—
(A) A definition of the community
served by the hospital facility and a de-
scription of how the community was
determined;
(B) A description of the process and
methods used to conduct the CHNA;
(C) A description of how the hospital
facility took into account input from per-
sons who represent the broad interests of
the community it serves;
(D) A prioritized description of the sig-
nificant health needs of the community
identified through the CHNA, along with a
description of the process and criteria used
in identifying certain health needs as sig-
nificant and prioritizing such significant
health needs; and
(E) A description of the potential mea-
sures and resources identified through the
CHNA to address the significant health
needs.
(ii)Process and methods used to con-
duct the CHNA. A hospital facility’s
CHNA report will be considered to de-
scribe the process and methods used to
conduct the CHNA for purposes of para-
graph (b)(7)(i)(B) of this section if the
CHNA report describes the data and other
information used in the assessment, as well
as the methods of collecting and analyzing
this data and information, and identifies
any parties with whom the hospital facility
collaborated, or with whom it contracted
for assistance, in conducting the CHNA.
(iii)Input from persons who repre-
sent the broad interests of the community
served by the hospital facility.Ahospital
facility’s CHNA report will be consid-
ered to describe how the hospital facility
took into account input from persons who
represent the broad interests of the com-
munity it serves for purposes of paragraph
(b)(7)(i)(C) of this section if the CHNA
report summarizes, in general terms, the
input provided by such persons and how
and over what time period such input was
provided (for example, whether through
meetings, focus groups, interviews, sur-
veys, or written comments and between
what dates); provides the names of orga-
nizations providing input and summarizes
the nature and extent of the organiza-
tion’s input; and describes the medically
underserved, low-income, or minority
populations being represented by organi-
zations or individuals that provided input.
A CHNA report does not need to name
or otherwise individually identify any
individuals participating in community
forums, focus groups, survey samples, or
similar groups.
2013–21 I.R.B.1131May 20, 2013

(iv)Separate CHNA reports. While a
hospital facility may conduct its CHNA in
collaboration with other organizations and
facilities (including, but not limited to, re-
lated and unrelated hospital organizations
and facilities, for-profit and government
hospitals, governmental departments, and
nonprofit organizations), every hospital fa-
cility must document the information de-
scribed in this paragraph (b)(7) in a sep-
arate CHNA report to satisfy paragraph
(b)(1)(iv) of this section unless it is eligi-
bletoadoptajointCHNAreportasde-
scribed in paragraph (b)(7)(v) of this sec-
tion. However, if a hospital facility is col-
laborating with other facilities and organi-
zations in conducting its CHNA or if an-
other organization has conducted a CHNA
for all or part of the hospital facility’s com-
munity, portions of the hospital facility’s
CHNA report may be substantively identi-
cal to portions of a CHNA report of a col-
laborating hospital facility or the other or-
ganization conducting a CHNA, if appro-
priate under the facts and circumstances.
For example, if a hospital facility conducts
a survey of the health needs of residents
of homeless shelters located in the com-
munity in collaboration with other hospital
facilities, the description of that survey in
the hospital facility’s CHNA report may be
identical to the description contained in the
CHNA reports for the other collaborating
hospital facilities. Similarly, if the state or
local public health department with juris-
diction over the community served by the
hospital facility conducts an inventory of
community health improvement resources
available in that community, the hospital
facility may include that inventory in its
CHNA report.
(v)Joint CHNA reports—(A)In gen-
eral. A hospital facility that collaborates
with other hospital facilities in conducting
its CHNA will satisfy paragraph (b)(1)(iv)
of this section if an authorized body of the
hospital facility adopts for the hospital fa-
cility a joint CHNA report produced for
all of the collaborating hospital facilities,
as long as all of the collaborating hospital
facilities define their community to be the
same and conduct a joint CHNA process,
and the joint CHNA report is clearly iden-
tified as applying to the hospital facility.
(B)Example. The following example
illustrates this paragraph (b)(7)(v):
Example. P is one of ten hospital facilities lo-
cated in and serving the populations of a particular
Metropolitan Statistical Area (MSA). P and the other
nine facilities in the MSA, some of which are un-
related to P, decide to collaborate in conducting a
CHNA for the MSA and to each define their commu-
nity as constituting the entire MSA. The ten hospital
facilities work together with the state and local health
departments of jurisdictions in the MSA to assess the
health needs of the MSA and collaborate in conduct-
ing surveys and holding public forums to receive in-
put from the MSA’s residents, including its medically
underserved, low-income, and minority populations.
The hospital facilities then work together to prepare
a joint CHNA report documenting this joint CHNA
process that contains all of the elements described in
paragraph (b)(7)(i) of this section. The joint CHNA
report identifies all of the collaborating hospital fa-
cilities, including P, by name, both within the report
itself and on the cover page. The board of directors of
the hospital organization operating P adopts the joint
CHNA report for P. P has complied with the require-
ments of this paragraph (b)(7)(v) and, accordingly,
has satisfied paragraph (b)(1)(iv) of this section.
(8)Making the CHNA report widely
available to the public—(i)In general.For
purposes of paragraph (b)(1)(v) of this sec-
tion, a hospital facility’s CHNA report is
made widely available to the public only if
the hospital facility—
(A) Makes the CHNA report widely
available on a Web site, as defined in
§1.501(r)–1(c)(4), atleast until the date the
hospital facility has made widely available
on a Web site its two subsequent CHNA
reports; and
(B) Makes a paper copy of the CHNA
report available for public inspection with-
out charge at the hospital facility at least
until the date the hospital facility has made
available for public inspection without
charge a paper copy of its two subsequent
CHNA reports.
(ii)Making draft CHNA reports widely
available. Notwithstanding paragraph
(b)(8)(i) of this section, if a hospital fa-
cility makes widely available on a Web
site (and/or for public inspection) a ver-
sion of the CHNA report that is expressly
marked as a draft on which the public may
comment, the hospital facility will not be
considered to have made the CHNA report
widely available to the public for purposes
of determining the date on which the hos-
pital facility has conducted a CHNA under
paragraph (a) of this section.
(c)Implementation strategy—(1)In
general. For purposes of paragraph (a)(2)
of this section, a hospital facility’s imple-
mentation strategy to meet the community
health needs identified through the hospi-
tal facility’s CHNA is a written plan that,
with respect to each significant health need
identified through the CHNA, either—
(i) Describes how the hospital facility
plans to address the health need; or
(ii) Identifies the health need as one the
hospital facility does not intend to address
and explains why the hospital facility does
not intend to address the health need.
(2)Description of how the hospital fa-
cility plans to address a significant health
need. In describing how a hospital fa-
cility plans to address a significant health
need identified through a CHNA for pur-
poses of paragraph (c)(1)(i) of this sec-
tion, the implementation strategy must de-
scribe the actions the hospital facility in-
tends to take to address the health need, the
anticipated impact of these actions, and a
plan to evaluate such impact. The imple-
mentation strategy must also identify the
programs and resources the hospital facil-
ity plans to commit to address the health
need. Finally, the implementation strat-
egy must describe any planned collabora-
tion between the hospital facility and other
facilities or organizations in addressing the
health need.
(3)Description of why a hospital facil-
ity is not addressing a significant health
need. In explaining why it does not in-
tend to address a significant health need for
purposes of paragraph (c)(1)(ii) of this sec-
tion, a hospital facility may provide a brief
explanation of its reason for not addressing
the health need, including, but not limited
to, resource constraints, other facilities or
organizations in the community addressing
the need, relative lack of expertise or com-
petencies to effectively address the need, a
relatively low priority assigned to the need,
and/or a lack of identified effective inter-
ventions to address the need.
(4)Joint implementation strategies.A
hospital facility may develop an imple-
mentation strategy in collaboration with
other facilities and organizations, includ-
ing, but not limited to, related and un-
related hospital organizations and facili-
ties, for-profit and government hospitals,
governmental departments, and nonprofit
organizations. In general, a hospital fa-
cility that collaborates with other facili-
ties and organizations in developing its
implementation strategy must still docu-
ment its implementation strategy in a sep-
arate written plan that is tailored to the
particular hospital facility, taking into ac-
count its specific programs and resources.
May 20, 201311322013–21 I.R.B.

However, a hospital facility that adopts a
joint CHNA report described in paragraph
(b)(7)(v) of this section may also adopt a
joint implementation strategy that, with re-
spect to each significant health need iden-
tified through the joint CHNA, either de-
scribes how the collaborating hospital fa-
cilities plan to address the health need or
identifies the health need as one the hos-
pital facilities do not intend to address and
explains why the hospital facilities do not
intend to address the health need, as long
as the joint implementation strategy—
(i) Is clearly identified as applying to
the hospital facility;
(ii) Clearly identifies the hospital fa-
cility’s particular role and responsibilities
in taking the actions described in the im-
plementation strategy and the programs
and resources the hospital facility plans to
commit to such actions; and
(iii) Includes a summary or other tool
that helps the reader easily locate those
portions of the joint implementation strat-
egy that relate to the hospital facility.
(5)When the implementation strategy
must be adopted—(i)In general. For pur-
poses of paragraph (a)(2) of this section, in
order to have adopted an implementation
strategy to meet the health needs identi-
fied through a hospital facility’s CHNA by
the end of the same taxable year in which
the hospital facility conducts that CHNA,
an authorized body of the hospital facil-
ity must adopt the implementation strategy
during the taxable year in which the hos-
pital facility completes the final step for
the CHNA described in paragraph (b)(1) of
this section, regardless of whether the hos-
pital facility began working on the CHNA
in a prior taxable year.
(ii)Example. The following example
illustratesthisparagraph(c)(5):
Example. M is a hospital facility that last con-
ducted a CHNA and adopted an implementation strat-
egy in Year 1. In Year 3, M defines the community
it serves, assesses the health needs of that commu-
nity, and takes into account input from persons who
represent the broad interests of that community. In
Year 4, M documents its CHNA in a CHNA report
that is adopted by an authorized body of M, makes
the CHNA report widely available on a Web site, and
makes paper copies available for public inspection.
To meet the requirements of paragraph (a)(2) of this
section, an authorized body of M must adopt an im-
plementation strategy to meet the health needs iden-
tified through that CHNA by the last day of Year 4.
(d)New hospital facilities.Ahospital
facility that is newly acquired or placed
into service, or that becomes newly subject
to the requirements of section 501(r) be-
cause the hospital organization that oper-
ates it is newly recognized as described in
section 501(c)(3), must meet the require-
ments of section 501(r)(3) by the last day
of the second taxable year beginning af-
ter the date, respectively, the hospital fa-
cility is acquired; licensed, registered, or
similarly recognized by its state as a hos-
pital; or newly subject to the requirements
of section 501(r) as a result of the hospital
organization operating it being recognized
as described in section 501(c)(3).
(e)Transition rules—(1)CHNA con-
ducted in taxable year beginning before
March 23, 2012. A hospital facility that
conducted a CHNA described in section
501(r)(3) in either its first taxable year
beginning after March 23, 2010, or its
first taxable year beginning after March
23, 2011, does not need to meet the re-
quirements of section 501(r)(3) again un-
til the third taxable year following the tax-
able year in which thehospital facility con-
ducted that CHNA, provided that the hos-
pital facility has adopted an implementa-
tion strategy to meet the community health
needs identified through that CHNA on or
before the 15th day of the fifth calendar
month following the close of its first tax-
able year beginning after March 23, 2012.
(2)CHNA conducted in first taxable
year beginning after March 23, 2012.A
hospital facility that conducts a CHNA de-
scribed in section 501(r)(3) in its first tax-
able year beginning after March 23, 2012,
will be deemed to satisfy paragraph (a)(2)
of this section during that taxable year if
an authorized body of the hospital facil-
ity adopts an implementation strategy to
meet the community health needs identi-
fied through that CHNA on or before the
15th day of the fifth calendar month fol-
lowing the close of its first taxable year be-
ginning after March 23, 2012.
Par. 5. Section 1.501(r)–7 as proposed
to be amended at 77 FR 38169 (June 26,
2012) is proposed to be further amended
by revising the section to read as follows:
§1.501(r)–7 Effective/applicability dates.
(a)Effective/applicability date.The
rules of §1.501(r)–1 through §1.501(r)–6
are effective on the date of publication of
the Treasury decision adopting these rules
as final or temporary regulations.
(b)Reliance and transition period.A
hospital facility mayrely on §1.501(r)–3
of the proposed regulations published in
theFederal Registeron April 5, 2013, for
any CHNA conducted or implementation
strategy adopted on or before the date that
is six months after these regulations are
published as final or temporary regulations
in theFederal Register.
Par. 6. Section 1.6012–2 is amended by
redesignating paragraphs (i) through (k) as
paragraphs (j) through (l) and adding new
paragraph (i) to read as follows:
§1.6012–2 Corporations required to make
returns of income.
*****
(i)Hospital organizations with non-
compliant hospital facilities.Every
hospital organization (as defined in
§1.501(r)–1(b)(16)) that is subject to
the tax imposed by §1.501(r)–2(d) shall
make a return on Form 990-T. The filing
of a return to pay the tax described in
§1.501(r)–2(d) does not relieve the organ-
ization of the duty of filing other required
returns.
*****
Par. 7. Section 1.6012–3 is amended
by adding new paragraph (a)(10) to read
as follows:
§1.6012–3 Returns by fiduciaries.
(a) * * *
(10)Hospital organizations organized
as trusts with noncompliant hospital facil-
ities. Every fiduciary for a hospital organ-
ization (as defined in §1.501(r)–1(b)(16))
organized as a trust described in section
511(b)(2) that is subject to the tax imposed
by §1.501(r)–2(d) shall make a return on
Form 990-T. The filing of a return to pay
the tax described in §1.501(r)–2(d) does
not relieve the organization of the duty of
filing other required returns.
*****
Par. 8. Section 1.6033–2 is amended by
adding paragraphs (a)(2)(ii)(l) and (k)(4)
to read as follows:
§1.6033–2 Returns by exempt
organizations (taxable years beginning
after December 31, 1969) and returns by
certain nonexempt organizations (taxable
2013–21 I.R.B.1133May 20, 2013

years beginning after December 31,
1980).
(a) * * *
(2) * * *
(ii) * * *
(I) In the case of a hospital organiza-
tion (as defined in §1.501(r)–1(b)(16)) de-
scribed in section 501(c)(3) during the tax-
able year—
(1) A copy of its audited financial state-
ments for the taxable year (or, in the case of
an organization the financial statements of
which are included in consolidated finan-
cial statements with other organizations,
such consolidated financial statements);
(2) Either a copy of the most recently
adopted implementation strategy, within
the meaning of §1.501(r)–3(c), for each
hospital facility it operates or the URL
of each web page on which it has made
each such implementation strategy widely
available on a Web site within the mean-
ing of §1.501(r)–1(c)(4) along with or as
part of the community health needs assess-
ment (CHNA) to which the implementa-
tion strategy relates;
(3) For each hospital facility it operates,
a description of the actions taken during
the taxable year to address the significant
health needs identified through its most re-
cently conducted CHNA, within the mean-
ing of §1.501(r)–3(b), or, if no actions
were taken with respect to one or more of
these health needs, the reason(s) why no
actions were taken; and
(4) The amount of the excise tax im-
posed on the organization under section
4959 during the taxable year.
*****
(k) * * *
(4) The applicability of paragraph
(a)(2)(ii)(l) of this section shall be limited
to returns filed on or after the date the reg-
ulations adding (a)(2)(ii)(l) are published
as final or temporary regulations in the
Federal Register.
PART 53—FOUNDATION AND
SIMILAR EXCISE TAXES
Par. 9. The authority citation for part
53 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 10. Section 53.4959–1 is added to
read as follows:
§53.4959–1 Taxes on failures by hospital
organizations to meet section 501(r)(3).
(a)Excise tax for failure to meet the sec-
tion 501(r)(3) requirements—(1)In gen-
eral. If a hospital organization (as defined
in §1.501(r)–1(b)(16)) fails to meet the re-
quirements of section 501(r)(3) separately
with respect to a hospital facility it oper-
ates in any taxable year, there is imposed
on the hospital organization a tax equal to
$50,000. If a hospital organization oper-
ates multiple hospital facilities and fails to
meet the requirements of section 501(r)(3)
with respect to more than one facility it op-
erates, the $50,000 tax is imposed on the
hospital organization separately for each
hospital facility’s failure. The tax may be
imposed for each taxable year that a hos-
pital facility fails tomeet the requirements
of section 501(r)(3). The tax imposed by
this section may be imposed in addition to
any tax imposed by §1.501(r)–2(d) or as a
result of revocation of a hospital organiza-
tion’s section 501(c)(3) status.
(2)Examples. The following examples
illustrate this paragraph (a):
Example 1. (i) U is a hospital organization that
operates only one hospital facility, V. In Year 1,
V conducts a community health needs assessment
(CHNA) and adopts an implementation strategy to
meet the health needs identified through the CHNA.
In Years 2 and 3, V does not conduct a CHNA. V
fails to conduct a CHNA by the last day of Year 4.
Accordingly, U has failed to meet the requirements of
section 501(r)(3) with respect to V in Year 4 because
V has failed to conduct a CHNA in Years 2, 3, and 4.
U is subject to a tax equal to $50,000 for Year 4.
(ii) V also fails to conduct a CHNA by the last
day of Year 5. Accordingly, U has failed to meet the
requirements of section 501(r)(3) with respect to V
in Year 5 because V has failed to conduct a CHNA
in Years 3, 4, and 5. U is subject to a tax equal to
$50,000 for Year 5.
Example 2. P is a hospital organization that
operates only one hospital facility, Q. In Year 1, Q
conducts a CHNA and adopts an implementation
strategy to meet the health needs identified through
the CHNA. In Years 2 and 3, Q does not conduct
a CHNA. In Year 4, Q conducts a CHNA but does
not adopt an implementation strategy to meet the
health needs identified through that CHNA by the
last day of Year 4. Accordingly, P has failed to meet
the requirements of section 501(r)(3) with respect
to Q in Year 4 because Q has failed to adopt an
implementation strategy by the end of the taxable
year in which Q conducted its CHNA. P is subject to
a tax equal to $50,000 for Year 4.
Example 3. R is a hospital organization that oper-
ates two hospital facilities, S and T. In Year 1, S and T
each conduct a CHNA and adopt an implementation
strategy to meet the health needs identified through
the CHNA. In Years 2 and 3, S and T do not conduct
a CHNA. S and T each fail to conduct a CHNA by the
last day of Year 4. Accordingly, R has failed to meet
the requirements of section 501(r)(3) with respect to
both S and T in Year 4. R is subject to a tax equal
to $100,000 ($50,000 for S’s failure plus $50,000 for
T’s failure) for Year 4.
(b)Effective/applicability dates.These
rules are effective on the date of publi-
cation of the Treasury decision adopting
these rules as final or temporary regula-
tions.
Steven T. Miller,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on April 3, 2013,
4:15 p.m., and published in the issue of the Federal Register
for April 5, 2013, 78 F.R. 20523)
Section 1446 Tax for Fiscal
Year Partnerships in 2013
Announcement 2013–30
Partnerships that have effectively con-
nected taxable income (ECTI) allocable to
a foreign partner must file a 2012 Form
8804,Annual Return for Partnership With-
holding Tax (Section 1446), for any taxable
year that begins in 2012. In all such cases,
the 2012 Form 8804 continues to apply the
tax rates in effect in 2012 for purposes of
determining the amount of section 1446
withholding tax that partnerships must pay
for taxable years beginning in 2012.
Foreign partners in a fiscal year part-
nership with a taxable year ending in 2013
nonetheless must pay tax on their distribu-
tive share of the partnership’s ECTI based
on the tax rates in effect in the taxable year
of their inclusion as determined under sec-
tion 706(a).
This Announcement is effective for
partnership taxable years beginning in
2012.
DRAFTING INFORMATION
The principal author of this an-
nouncement is Ronald M. Gootzeit of
the Office of Associate Chief Counsel
(International). For further information
regarding this announcement contact
Ronald M. Gootzeit at (202) 622–3860
(not a toll-free call).
May 20, 201311342013–21 I.R.B.

Deletions From Cumulative
List of Organizations
Contributions to Which
areDeductibleUnderSection
170 of the Code
Announcement 2013–31
The Internal Revenue Service has re-
voked its determination that the organi-
zations listed below qualify as organiza-
tions described in sections 501(c)(3) and
170(c)(2) of the Internal Revenue Code of
1986.
Generally, the Service will not disallow
deductions for contributions made to a
listed organization on or before the date
of announcement in the Internal Revenue
Bulletin that an organization no longer
qualifies. However, the Service is not
precluded from disallowing a deduction
for any contributions made after an or-
ganization ceases to qualify under section
170(c)(2) if the organization has not timely
filed a suit for declaratory judgment under
section 7428 and if the contributor (1) had
knowledge of the revocation of the ruling
or determination letter, (2) was aware that
such revocation was imminent, or (3) was
in part responsible for or was aware of the
activities or omissions of the organization
that brought about this revocation.
If on the other hand a suit for declara-
tory judgment has been timely filed, con-
tributions from individuals and organiza-
tions described in section 170(c)(2) that
are otherwise allowable will continue to
be deductible. Protection under section
7428(c) would begin on May 20, 2013, and
would end on the date the court first deter-
mines that the organization is not described
in section 170(c)(2) as more particularly
set forth in section 7428(c)(1). For indi-
vidual contributors, the maximum deduc-
tion protected is $1,000, with a husband
and wife treated as one contributor. This
benefit is not extended to any individual, in
whole or in part, for the acts or omissions
of the organization that were the basis for
revocation.
21
st
Century Animal Resource &
Education Services
Dolan Springs, AZ
Books For People
Yuma, AZ
California Nairobi International Childrens
Organization
Fresno, CA
Cape Verdean Club of Falmouth Inc.
Teaticket, MA
Congressional District Programs, Inc.
Falls Church, VA
Dr. R.C. Samanta Roy Institute of Science
and Technology, Inc.
Green Bay, WI
Eko Club, Inc.
Houston, TX
Everything Must Change, Inc.
Philadelphia, PA
Excalibur Foundation
Sparks, NV
Functional Social Solutions, Inc.
Long Beach, CA
Gateway Educational Services
Honolulu, HI
Good Housing, Inc.
Merrick, NY
Holland Peck Charitable Foundation
Carefree, AZ
Kona University, Inc.
Honolulu, HI
Lakeland-Winter Haven Kennel Club, Inc.
Lakeland, FL
Life Changes Ministries International Inc.
Fort Mill, SC
Marley Fund
Greenville, NC
Needham Community Theatre, Inc.
Needham, MA
2013–21 I.R.B.1135May 20, 2013

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the ef-
fect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is be-
ingextendedtoapplytoavariationofthe
fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that the
same principle also applies to B, the earlier
ruling is amplified. (Compare withmodi-
fied,below).
Clarifiedis used in those instances
where the language in a prior ruling is be-
ing made clear because the language has
caused, or may cause, some confusion.
It is not used where a position in a prior
ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modifiedis used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
withamplifiedandclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.
Revokeddescribes situations where the
position in the previously published ruling
is not correct and the correct position is
beingstatedinanewruling.
Supersededdescribes a situation where
the new ruling does nothing more than re-
state the substance and situation of a previ-
ously published ruling (or rulings). Thus,
the term is used to republish under the
1986 Code and regulations the same po-
sition published under the 1939 Code and
regulations. The term is also used when
it is desired to republish in a single rul-
ing a series of situations, names, etc., that
were previously published over a period of
time in separate rulings. If the new rul-
ing does more than restate the substance
of a prior ruling, a combination of terms
is used. For example,modifiedandsu-
persededdescribes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is self
contained. In this case, the previously pub-
lished ruling is first modified and then, as
modified, is superseded.
Supplementedis used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names in
subsequent rulings. After the original rul-
ing has been supplemented several times, a
new ruling may be published that includes
the list in the original ruling and the ad-
ditions, and supersedes all prior rulings in
the series.
Suspendedis used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of cases
in litigation, or the outcome of a Service
study.
Abbreviations
The fol
lowing abbreviations in current use
and for
merly used will appear in material
publis
hedintheBulletin.
A—Individual.
Acq.—A
cquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank
.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cu
mulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Coo
perative.
Ct.D.—Court Decision.
CY—County.
D—Decede
nt.
DC—Dummy Corporation.
DE—Donee.
Del. Order
—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Emp
loyer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduc
iary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Fo
reign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Fed
eral Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grante
e.
GP—General Partner.
GR—Grantor.
IC—Insura
nce Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited
Partner.
LR—Lessor.
M—Minor.
Nonacq.—No
nacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Persona
l Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Pa
rtnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Re
al Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsi
diary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target
Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Trans
feree.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpay
er.
TR—Trust.
TT—Trustee.
U.S.C.—Uni
ted States Code.
X—Corporation.
Y—Corporation.
Z—Corporat
ion.
May 20, 2013i2013–21 I.R.B.

Numerical Finding List
1
Bulletins 2013–1 through 2013–21
Announcements:
2013-1, 2013-1 I.R.B.251
2013-2, 2013-2 I.R.B.271
2013-3, 2013-2 I.R.B.271
2013-4, 2013-4 I.R.B.440
2013-5, 2013-3 I.R.B.306
2013-6, 2013-3 I.R.B.307
2013-7, 2013-3 I.R.B.308
2013-8, 2013-4 I.R.B.440
2013-9, 2013-4 I.R.B.441
2013-10, 2013-3 I.R.B.311
2013-11, 2013-6 I.R.B.483
2013-12, 2013-11 I.R.B.651
2013-13, 2013-9 I.R.B.532
2013-14, 2013-11 I.R.B.651
2013-15, 2013-11 I.R.B.652
2013-16, 2013-14 I.R.B.738
2013-17, 2013-16 I.R.B.911
2013-19, 2013-14 I.R.B.760
2013-20, 2013-14 I.R.B.761
2013-21, 2013-17 I.R.B.980
2013-22, 2013-17 I.R.B.981
2013-23, 2013-16 I.R.B.940
2013-26, 2013-16 I.R.B.940
2013-27, 2013-17 I.R.B.981
2013-28, 2013-17 I.R.B.982
2013-29, 2013-18 I.R.B.1024
2013-30, 2013-21 I.R.B.1134
2013-31, 2013-21 I.R.B.1135
2013-33, 2013-20 I.R.B.1098
Notices:
2013-1, 2013-3 I.R.B.281
2013-2, 2013-6 I.R.B.473
2013-3, 2013-7 I.R.B.484
2013-4, 2013-9 I.R.B.527
2013-5, 2013-9 I.R.B.529
2013-6, 2013-10 I.R.B.540
2013-7, 2013-6 I.R.B.477
2013-8, 2013-7 I.R.B.486
2013-9, 2013-9 I.R.B.529
2013-10, 2013-8 I.R.B.503
2013-11, 2013-11 I.R.B.610
2013-12, 2013-10 I.R.B.543
2013-13, 2013-12 I.R.B.659
2013-14, 2013-13 I.R.B.712
2013-15, 2013-14 I.R.B.739
2013-16, 2013-14 I.R.B.740
2013-17, 2013-20 I.R.B.1082
2013-18, 2013-14 I.R.B.742
2013-19, 2013-14 I.R.B.743
2013-20, 2013-15 I.R.B.902
Notices— Continued:
2013-21, 2013-15 I.R.B.903
2013-22, 2013-15 I.R.B.904
2013-23, 2013-16 I.R.B.906
2013-24, 2013-16 I.R.B.909
2013-25, 2013-17 I.R.B.978
2013-26, 2013-18 I.R.B.984
2013-27, 2013-18 I.R.B.985
2013-28, 2013-19 I.R.B.1039
2013-29, 2013-20 I.R.B.1085
2013-30, 2013-21 I.R.B.1099
2013-31, 2013-21 I.R.B.1099
Proposed Regulations:
REG-160873-04, 2013-20 I.R.B.1089
REG-155929-06, 2013-11 I.R.B.650
REG-106918-08, 2013-13 I.R.B.714
REG-141066-09, 2013-3 I.R.B.289
REG-148873-09, 2013-7 I.R.B.494
REG-102966-10, 2013-10 I.R.B.579
REG-120391-10, 2013-18 I.R.B.1005
REG-132702-10, 2013-19 I.R.B.1042
REG-140649-11, 2013-12 I.R.B.666
REG-106499-12, 2013-21 I.R.B.1111
REG-118315-12, 2013-14 I.R.B.746
REG-122706-12, 2013-19 I.R.B.1043
REG-122707-12, 2013-5 I.R.B.450
REG-148500-12, 2013-13 I.R.B.716
REG-154563-12, 2013-20 I.R.B.1097
Revenue Procedures:
2013-1, 2013-1 I.R.B.1
2013-2, 2013-1 I.R.B.92
2013-3, 2013-1 I.R.B.113
2013-4, 2013-1 I.R.B.126
2013-5, 2013-1 I.R.B.170
2013-6, 2013-1 I.R.B.198
2013-7, 2013-1 I.R.B.233
2013-8, 2013-1 I.R.B.237
2013-9, 2013-2 I.R.B.255
2013-10, 2013-2 I.R.B.267
2013-11, 2013-2 I.R.B.269
2013-12, 2013-4 I.R.B.313
2013-13, 2013-6 I.R.B.478
2013-14, 2013-3 I.R.B.283
2013-15, 2013-5 I.R.B.444
2013-16, 2013-7 I.R.B.488
2013-17, 2013-11 I.R.B.612
2013-18, 2013-8 I.R.B.503
2013-19, 2013-11 I.R.B.648
2013-20, 2013-14 I.R.B.744
2013-21, 2013-12 I.R.B.660
2013-22, 2013-18 I.R.B.985
2013-23, 2013-17 I.R.B.978
2013-25, 2013-21 I.R.B.1110
Revenue Rulings:
2013-1, 2013-2 I.R.B.252
2013-2, 2013-10 I.R.B.533
2013-3, 2013-8 I.R.B.500
2013-4, 2013-9 I.R.B.520
2013-5, 2013-9 I.R.B.525
2013-6, 2013-13 I.R.B.701
2013-7, 2013-11 I.R.B.608
2013-8, 2013-15 I.R.B.763
2013-9, 2013-15 I.R.B.764
2013-11, 2013-20 I.R.B.1059
Tax Conventions:
2013-16, 2013-14 I.R.B.738
Treasury Decisions:
9601, 2013-10 I.R.B.535
9603, 2013-3 I.R.B.273
9605, 2013-11 I.R.B.587
9606, 2013-11 I.R.B.586
9607, 2013-6 I.R.B.469
9608, 2013-3 I.R.B.274
9609, 2013-12 I.R.B.655
9610, 2013-15 I.R.B.765
9611, 2013-13 I.R.B.699
9612, 2013-13 I.R.B.678
9613, 2013-15 I.R.B.900
9614, 2013-17 I.R.B.947
9615, 2013-19 I.R.B.1026
9616, 2013-20 I.R.B.1061
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2012–27 through 2012–52 is in Internal Revenue Bulletin
2012–52, dated December 27, 2012.
2013–21 I.R.B.iiMay 20, 2013

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2013–1 through 2013–21
Announcements:
2012-42
Obsoleted by
T.D. 9610, 2013-15 I.R.B.765
2013-12
Supplemented by
Ann. 2013-22, 2013-17 I.R.B.981
Notices:
87-64
Obsoleted by
T.D. 9614, 2013-17 I.R.B.947
2000-45
Modified and superseded by
Notice 2013-18, 2013-14 I.R.B.742
2006-87
Superseded by
Notice 2013-31, 2013-21 I.R.B.1099
2007-25
Superseded by
Notice 2013-31, 2013-21 I.R.B.1099
2007-77
Superseded by
Notice 2013-31, 2013-21 I.R.B.1099
2008-10
Obsoleted by
T.D. 9615, 2013-19 I.R.B.1026
2008-107
Superseded by
Notice 2013-31, 2013-21 I.R.B.1099
2010-27
Superseded by
Notice 2013-31, 2013-21 I.R.B.1099
2010-60
Obsoleted by
T.D. 9610, 2013-15 I.R.B.765
2011-8
Superseded by
Notice 2013-31, 2013-21 I.R.B.1099
2011-14
Amplified and supplemented by
Notice 2013-7, 2013-6 I.R.B.477
2011-34
Obsoleted by
T.D. 9610, 2013-15 I.R.B.765
Notices— Continued:
2011-38
Obsoleted by
REG-148873-09, 2013-7 I.R.B.494
2011-53
Obsoleted by
T.D. 9610, 2013-15 I.R.B.765
2012-19
Superseded by
Notice 2013-31, 2013-21 I.R.B.1099
2012-60
Superseded by
Notice 2013-1, 2013-3 I.R.B.281
2013-1
Modified and superseded by
Notice 2013-16, 2013-14 I.R.B.740
Proposed Regulations:
REG-140668-07
Corrected by
Ann. 2013-6, 2013-3 I.R.B.307
Revenue Procedures:
87-57
Modified by
Rev. Proc. 2013-13, 2013-6 I.R.B.478
2004-66
Modified and superseded by
Rev. Proc. 2013-11, 2013-2 I.R.B.269
2008-35
Modified and superseded by
Rev. Proc. 2013-14, 2013-3 I.R.B.283
2008-50
Modified and superseded by
Rev. Proc. 2013-12, 2013-4 I.R.B.313
2011-14
Modified by
Rev. Proc. 2013-20, 2013-14 I.R.B.744
2011-49
Modified by
Rev. Proc. 2013-6, 2013-1 I.R.B.198
2011-52
Modified and partly superseded by
Rev. Proc. 2013-15, 2013-5 I.R.B.444
2011-55
Amplified and supplemented by
Notice 2013-7, 2013-6 I.R.B.477
2011-61
Superseded by
Rev. Proc. 2013-17, 2013-11 I.R.B.612
Revenue Procedures— Continued:
2011-62
Superseded by
Rev. Proc. 2013-18, 2013-8 I.R.B.503
2012-1
Superseded by
Rev. Proc. 2013-1, 2013-1 I.R.B.1
2012-2
Superseded by
Rev. Proc. 2013-2, 2013-1 I.R.B.92
2012-3
Superseded by
Rev. Proc. 2013-3, 2013-1 I.R.B.113
2012-4
Superseded by
Rev. Proc. 2013-4, 2013-1 I.R.B.126
2012-5
Superseded by
Rev. Proc. 2013-5, 2013-1 I.R.B.170
2012-6
Superseded by
Rev. Proc. 2013-6, 2013-1 I.R.B.198
2012-7
Superseded by
Rev. Proc. 2013-7, 2013-1 I.R.B.233
2012-8
Superseded by
Rev. Proc. 2013-8, 2013-1 I.R.B.237
2012-9
Superseded by
Rev. Proc. 2013-9, 2013-2 I.R.B.255
2012-10
Superseded by
Rev. Proc. 2013-10, 2013-2 I.R.B.267
2012-30
Corrected and clarified by
Ann. 2013-3, 2013-2 I.R.B.271
Updated by
Ann. 2013-10, 2013-3 I.R.B.311
2012-46
Corrected by
Ann. 2013-11, 2013-6 I.R.B.483
2013-1
Corrected by
Ann. 2013-9, 2013-4 I.R.B.441
2013-4
Modified by
Rev. Proc. 2013-22, 2013-18 I.R.B.985
2013-6
Revised by
Ann. 2013-15, 2013-11 I.R.B.652
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2012–27 through 2012–52 is in Internal Revenue Bulletin 2012–52, dated December 27,
2012.
May 20, 2013iii2013–21 I.R.B.

Revenue Procedures— Continued:
Corrected by
Ann. 2013-13, 2013-9 I.R.B.532
2013-8
Modified by
Rev. Proc. 2013-22, 2013-18 I.R.B.985
2013-14
Modified by
Rev. Proc. 2013-19, 2013-11 I.R.B.648
Revenue Rulings:
92-19
Supplemented in part by
Rev. Rul. 2013-4, 2013-9 I.R.B.520
Treasury Decisions:
9564
Corrected by
Ann. 2013-4, 2013-4 I.R.B.440
Amended by
Ann. 2013-7, 2013-3 I.R.B.308
9604
Corrected by
Ann. 2013-19, 2013-14 I.R.B.760
2013–21 I.R.B.ivMay 20, 2013

Internal Revenue Service
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ashington,DC20224
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INTERNAL REVENUE BULLETIN
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Bulletins are available atwww.irs.gov/irb/.
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