Internal Revenue Service officials have released the final report on its tax-exempt hospital project. The purpose of the project was so that “IRS and other stakeholders could better understand nonprofit hospitals and their community benefit and executive compensation practices and reporting.”
The report is based on the responses to questionnaires the IRS sent to a sample of more than 500 nonprofit hospitals. As part of the study, the IRS also examined 20 nonprofit hospitals regarding their executive compensation practices.
Here is what the report had to say about the IRS’s findings on executive compensation:
In general, the hospitals reported widespread compliance with key indicators of sound compensation practices, including use of formal written compensation policies, use of comparability data, approval in advance by persons without a conflict of interest, and setting compensation within the range of comparability data. This pattern was reported consistently across the community types and revenue size categories, and was confirmed in the examinations of the 20 hospitals.