Federal and State Income Tax Compliance for the Health Care Industry

When an income tax-exempt hospital or health care system enters into a simple contract or a complex joint venture agreement with an individual physician, a physician practice group, or any other taxable entity, the parties must be certain that the agreement or transaction satisfies standards in the Internal Revenue Code (IRC) and applicable Treasury Regulations in order to avoid a variety of tax penalties. We deal regularly with questions regarding private inurement, private benefit, unrelated business taxable income issues, and the so-called “intermediate sanctions” under IRC Section 4958 for our tax-exempt hospital clients.

We have organized many tax-exempt entities providing health care services, drafting articles of incorporation, bylaws, conflicts of interests policies and other governance documents. We have drafted many Form 1023s – the Application for Recognition of Exemption Under IRS Section 501(c)(3) – for our clients and have worked with them in responding to questions posed by the IRS Exempt Organization Branch in securing favorable determination letters.

We work with other FBT lawyers in dealing with all aspects of tax-exempt finance requirements and qualified deferred compensation requirements for income tax-exempt hospital and health care systems.