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Table of Contents
Preface ix
About the Authors xi
Book Citations xv
1 Tax-Exempt Healthcare Organizations: An Overview 1
1.2 Defining Tax-Exempt Organizations 1
1.5 Charitable Healthcare Organizations 1
1.8 Promotion of Health 2
1.10 ABLE Programs 2
3 Public Charities and Private Foundations (New) 5
3.3 Commerciality Doctrine 5
4 Private Inurement, Private Benefit, and Excess Benefit Transactions 9
4.4 Private Inurement—Scope and Types 9
4.6 Essence of Private Benefit 10
4.9 Excess Benefit Transactions 12
5 Public Charities and Private Foundations 13
5.1 Public Institutions 13
5.6 Recognition of Change in Public Charity Status 13
7 Lobbying and Political Activities 15
7.1 Legislative Activities Limitation 15
7.4 Political Activities Limitation 16
7.5 Business Expense Deduction Rules and Political Activities 18
7.7 Public Policy Advocacy Activities 19
7.8 Political Activities of Social Welfare Organizations 19
8 Hospitals 21
8.3 Public Hospitals 21
9 Managed Care Organizations 23
9.3 Commercial-Type Insurance Providers 23
9.5 Recent Developments 23
13 Other Provider and Supplier Organizations 27
13.3 Qualified Nonprofit Health Insurance Issuers 27
13.5 Accountable Care Organizations 28
16 For-Profit Subsidiaries 33
16.3 Attribution of Subsidiary’s Activities to Exempt Parent 33
17 Exempt and Nonexempt Cooperatives 35
17.1 Cooperative Hospital Service Organizations 35
18 Business Leagues 37
18.1 Business Leagues in General 37
18.2 Healthcare Trade Associations 38
19 Other Health-Related Organizations 39
19.4 Hospital Management Services Organizations 39
19.5 Regional Health Information Organizations 40
20 Healthcare Provider Reorganizations 41
20.1 Some Basics about Reorganizations 41
21 Mergers and Conversions 43
21.4 Conversion from Nonexempt to Exempt Status 43
22 Partnerships and Joint Ventures (New) 45
22.9 Whole-Hospital Joint Ventures 45
24 Tax Treatment of Unrelated Business Activities 47
24.2 Definition of Trade or Business 47
24.3 Definition of Regularly Carried On 49
24.5 Application of Substantially Related Test to Healthcare Organizations 50
24.11 Pharmacy, Medical Supplies, and Service Sales 51
24.12 Laboratory Testing Services 51
24.13 Medical Research 52
24.18 Other Exceptions to Unrelated Income Taxation 53
24.20 Revenue from Controlled Organizations 55
24.21 Unrelated Debt-Financed Income 55
24.23 Computation of Unrelated Business Taxable Income 55
25 Physician Recruitment and Retention 61
25.5 Specific Recruitment and Retention Techniques 61
26 Charity Care 63
26.6 Definitional and Reporting Issues 63
26.9 Charity Care and National Health Reform 64
26.10 Additional Statutory Requirements for Hospitals 64
26.12 Provider Taxes (New) 82
27 Worker Classification and Employment Taxes 85
27.7 Medical Residents and the Student Exception 85
28 Compensation and Employee Benefits 87
28.3 Executive Compensation 87
28.5 Overview of Employee Benefits Law 87
28.6 Deferred Compensation in General 88
28.7 Excessive Executive Compensation (New) 91
30 Tax-Exempt Bond Financing 95
30.3 Disqualification of Tax-Exempt Bonds 95
31 Fundraising Regulation 105
31.2 Federal Law Regulation 105
33 Governance 107
33.4A IRS Ruling Policy 107
34 Exemption and Public Charity Recognition Processes 111
34.1 Exemption Recognition Process 111
34.5 Public Charity Status 121
34.6 Group Exemption 121
34.7A Notice Requirements for Social Welfare Organizations (New) 122
34.8 Procedure Where Determination Is Adverse 123
34.9 Constitutional Law Aspects of Process 125
35 Maintenance of Tax-Exempt Status and Avoidance of Penalties 127
35.1 Material Changes 127
35.2A Modification of Tax Exemption (New) 129
35.4 Redesigned Annual Information Return 129
35.5 Disclosure Requirements 130
35.6 IRS Disclosure to State Officials 131
36 IRS Audits of Healthcare Organizations 133
36.2 Audit Procedures 133
Cumulative Table of Cases 139
Cumulative Table of IRS Revenue Rulings 149
Cumulative Table of IRS Revenue Procedures 153
Cumulative Table of IRS Private Letter Rulings 155
Cumulative Table of IRS Technical Advice Memoranda 161
Table of Chief Counsel Advice Memoranda 163
Cumulative Table of IRS General Counsel Memoranda 165
Table of Tax Reform Legislation 167
Cumulative Index 173
