Citizens Medical Center is a non for profit, short term acute care facility controlled by the county government and is therefore considered tax exempt under section 501(c)(3) of the Internal Revenue Service. Citizens is mostly provided their funding through state government, non partisan/non political donations, and gross patient revenue.
Due to their non for profit status Citizens is required to maintain three main requirements set forth by the Internal Revenue Service. First they are required to be organized and operate exclusively in compliance with their exempt purposes, (The Internal, 2007). Citizens Medical Center complies with this condition in that they are solely intended to provide medical and educational services for the community, regardless payment ability, of Victoria, TX and the surrounding counties. Secondly, they are required to use all revenue for the purpose of the company and ensure none of the profit is provided to private shareholders or individuals, (The Internal, 2007).
Citizens fulfills this requirement in that they are considered "community owned" where their resources stay in the immediate area with the excess revenue being reinvested in the hospital, its technology, and the employees. Lastly, they "may not be an action organization." In other words, the organization "may not attempt to influence legislation as a substantial part of its activities or participate in any campaign activities," (The Internal, 2007). Citizens has no affiliation with any political campaigns and has not received funds from any partisan or political donations. Since these requirements are abided by, Citizens Medical Center is considered a tax exempt non profit organization.
If Citizens is a non for profit then where do they obtain funds to operate? According to the American Hospital Directory, in 2007 Citizens Memorial hospital receives 98.3 percent of their income from gross patient revenue totaling 400,084,761 dollars. The remaining 1.7...