Article 4 in our series on CARF accreditation
How CARF-accredited healthcare organizations can avoid tax compliance challenges
Healthcare organizations face an increasingly complex regulatory environment, especially when it comes to tax compliance. For CARF-accredited agencies, maintaining compliance with tax regulations is essential for both operational success and maintaining accreditation.
Tax compliance challenges
- Maintaining tax-exempt status
Many healthcare organizations, particularly non-profits, benefit from tax-exempt status. However, maintaining this status requires strict adherence to IRS regulations. One key challenge is Unrelated Business Income Tax (UBIT), which applies to revenue generated from activities unrelated to the organization’s exempt purpose. Even for CARF-accredited agencies, failure to properly manage and report unrelated income can jeopardize tax-exempt status. - Healthcare-specific tax regulations
The healthcare sector often has unique tax structures which can add complexity to adhering to federal and state tax rules. CARF-accredited organizations must ensure they meet all these tax regulations while staying compliant with the standards set forth by CARF. - State and local tax compliance
In addition to federal regulations, CARF-accredited healthcare practices must navigate complex state and local tax requirements, including sales tax, property tax, and payroll taxes. These taxes vary depending on location and can present significant challenges for multi-state organizations.
Staying ahead of tax compliance issues
- Conduct regular internal reviews to ensure tax compliance.
- Engage a tax specialist with healthcare and CARF experience to review your organization’s financial and operational structures.
- Stay updated on evolving healthcare regulations that may affect tax obligations, such as changes in reimbursement rates or state healthcare tax credits.
For CARF-accredited organizations, staying compliant with tax regulations is critical for maintaining accreditation and avoiding financial penalties. Partnering with a tax specialist who understands both healthcare and CARF standards can help ensure ongoing compliance and operational efficiency.
Questions? Keiter’s Healthcare and Medical Services tax team can consult on tax planning and savings opportunities. Contact us. Email or Call: 804.747.0000
About the Authors
Zac serves clients in the healthcare industry and is a leader in Keiter’s Healthcare and Medical Services Practice. He assists his clients with financial reporting in conformity with generally accepted accounting principles, consulting on strategic business initiatives, as well as helping them understand the accounting and financial reporting implications of complex equity transactions and implementation of new accounting standards. Read more of Zac’s accounting insights on our blog.
Jim works predominately with clients in the medical and dental industry where he provides tax planning and compliance services related to practice acquisitions and transitions. Jim strives to add value to his client relationships by being a trusted advisor. He is a leader in Keiter’s Healthcare and Medical Practices team. Read more of Jim’s accounting insights on our blog.
Rachel brings a passion for providing superior value to her assurance and audit clients through the highest form of quality service. Understanding her clients’ organizational missions and providing tailored engagement services is paramount to her approach. Her clients include healthcare companies, and she is a member of the Healthcare and Medical Practices team. Read more of Rachel’s accounting insights on our blog.
The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.
