Charity Care. The local newspaper of a large urban area printed a story titled Charity Care by

Charity Care. The local newspaper of a large urban area printed a story titled €œCharity Care by Hospitals Stirs Debate.€ The story quotes one legislator who wants €œto ensure that the state€™s nonprofit hospitals are fulfilling their obligation that is to provide charity care at least equal to the tax exemption they receive as a nonprofit entity.€ The following table is provided:

Required
a. What are the obligations of IRC Sec. 501 (c) (3) organizations to provide charity care?
b. Do you agree that the hospitals are not fulfilling their obligations? Why or why not?
c. What additional information would you like to have? Do you expect to find this information in the audited annual financialstatements?

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Comparison of Selected Factors in Three Nonprofit Hospitals (dollars in millions) St. Pat's Capitol Hospital Норе Hospital Hospital Estimated taxes the hospitals would pay if they were not tax-exempt Charity and other uncompensated care $6.8 $2.2 $4.5 $3.1, not including bad debts $17.8, of which $3.8 is bad debts $1.6 $6.7 $1.0 Community service programs* Unpaid cost of Medicaid n.a. and Medicare $3.4 $0.6 n.a. Nonreimbursed research and graduate medical education $2.0 $0.7 п.а.