TAX ISSUES ARE GAINING PROMINENCE  for healthcare organizations regardless of their status with the Internal Revenue Service, and 2008 could prove to be a challenging year for hospital finance professionals.

But while most accounting departments grapple with the tricky tenets of taxation, their situations follow two distinctly different paths, depending on whether they are not-for-profit or for-profit.

On the not-for-profit side, hospitals are being pressured to justify their tax-exempt status by demonstrating that they provide an appropriate level of charity care or community benefit. A not-for-profit that isn’t meeting the minimum threshold could see its tax-exempt status jeopardized.

Conversely, for-profits must be cognizant of the Financial Accounting Standards Board Interpretation 48 (FIN 48), a standard designed to create greater detail and transparency in tax accounting. Launched at the beginning of 2007, industry experts contend that FIN 48 will force for-profit hospitals to scrutinize and report their tax positions much more thoroughly than in the past.