A bureaucracy can be defined as a group of non-elected governmental officials who are responsible for the implementation of the laws, regulations or other rules of their government. Within the federal government of the United States, bureaucracy is sometimes synonymous with the various agencies subordinated to the executive branch of government and administered by a Cabinet position. Included among these agencies is the Internal Revenue Service, a bureau of the United States Department of Treasury.
Bureaucracies are often demonized as slow, inefficient and burdensome. Excessive regulation and rigid conformity to processes and rules, also referred to as red tape, create this popular impression. Sometimes, this impression is deserved.
In response to changes required by the Affordable Care Act, especially the adoption of section 501(r) which places new statutory requirements on hospitals wishing to obtain (or remain) tax exempt, the IRS proposed revisions to the 2011 Schedule H of Form 990 to gather additional information from such institutions. The IRS requested and received public comment on the proposed revisions.
Among the responses, the American Hospital Association representing over 5,000 member hospitals, the Healthcare Financial Management Association representing over 37,000 healthcare executives and healthcare financial workers and VHA, Inc. with 1,400 member hospitals jointly issued a letter in response to the IRS request. The response is detailed and thoughtful. In general, the letter requests that the IRS make Part V, Section B optional for 2011 (as the IRS did for 2010) to allow additional time to work through the application of these rules to a diverse group of charitable hospitals, to eliminate redundancies that have no clear relationship to the statutory requirements of the law or that do not result in a clear benefit to the public, and to simplify reporting for increased understanding (and to eliminate unneeded paperwork).
Unfortunately, the IRS has decided to leave the draft 2011 Schedule H unchanged and to require completion of all parts of the schedule as drafted (other than lines 1 through 7 of Part V, Section B, relating to Community Health Needs Assessments, which remains optional for 2011). For an agency that has more work to do than it has employees to do it, the unnecessary work it creates for itself (as well as for the healthcare industry) is difficult to understand.