SECTION 3. RELIANCE

Because the preamble to the 2013 proposed regulations did not expressly mention whether taxpayers could rely on sections other than § 1.501(r)–3 pending the publication of final or temporary regulations, some commenters have asked

whether they can rely currently on the other sections of the 2013 proposed regulations. The Treasury Department and the IRS confirm that tax-exempt organizations may rely on all of the provisions of both the 2012 and 2013 proposed regulations pending the publication of final or temporary regulations or other applicable guidance. In addition, organizations may rely on § 1.501(r)–3 of the 2013 proposed regulations for any CHNA conducted or implementation strategy adopted on or before the date that is six months after final or temporary regulations are published.

The 2013 proposed regulations make minor amendments to the definitions of “hospital facility” and “hospital organization” contained in the 2012 proposed regulations. Tax-exempt hospital organizations may rely on either the definitions in the 2012 proposed regulations or the amended definitions in the 2013 proposed regulations until final or temporary regulations or other applicable guidance are published. Thus, for example, in accordance with the definition of “hospital facility” in § 1.501(r)–1(b)(15) of the 2012 proposed regulations, a hospital organization may, but is not required to, treat multiple buildings operated under a single state license as a single hospital facility. In addition, organizations may rely on the definition of what it means to be “operating a hospital facility” in § 1.501(r)– 1(c)(2) of the 2013 proposed regulations – including the exceptions provided in § 1.501(r)–1(c)(2)(i) and (ii) for certain tax-exempt organizations that are partners in partnerships that operate hospital facilities - to determine whether an organization “operates” a hospital facility and is, therefore, subject to the requirements of § 501(r). Organizations may rely on the two exceptions provided in § 1.501(r)– 1(c)(2)(i) and (ii) of the 2013 proposed regulations for purposes of the 2013 Form 990, Return of Organization Exempt from Income Tax, and Schedule H, Hospitals, of the Form 990, notwithstanding the fact that the instructions to the 2013 Form 990 and Schedule H do not mention these exceptions.

Bulletin No. 2014–3 407 January 13, 2014