Federal Law Update: Ancillary Joint Ventures After ... - Honigman

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Ancillary Services Joint Ventures • IRS likely to apply Rev. Rul. 98-15 • Issue is control of contributed charitable assets • Exemption denial upheld by Tax Court in Redlands; appeal pending (9th Circuit) • PLR due out Dec. 1999 delayed pending Redlands and now TBOR2 final regulations • IRS may limit to UBI if not whole hospital
Redlands: Why Not Exempt? • Sole purpose: ASC joint venture with for-profit • 50/50 board of General Partnership – veto rights only (for both parties) – no initiation rights for RSS • No other influence for RSS – physicians owned stock in SCIA – no active supervision by RCH • Partnership Agreements fail to mention primacy of charitable motives
Page 1 and 2: Federal Law Update: Ancillary Joint
Page 3 and 4: Areas not addressed • Non-tax con
Page 5 and 6: Audit Activity • Ongoing joint ve
Page 7 and 8: Defining “Insiders” • No Free
Page 9 and 10: TBOR2 Basics • Two-tier tax on di
Page 11 and 12: Ancillary Joint Ventures •Two-pro
Page 13 and 14: Typical Whole Hospital Joint Ventur
Page 15 and 16: Ancillary Services Joint Venture (H
Page 17: Redlands Community Hospital Foundat
Page 21 and 22: Redlands: Why Not Exempt? • RSS w
Page 23 and 24: Expanded Control Test • Initiatio
Page 25 and 26: Community Benefit •New services
Page 27 and 28: Exemption Impact of 50/50 Ventures
Page 29 and 30: Other Structuring Options • Taxab
Page 31: Non-tax Considerations • Antifrau

Federal Law Update: Ancillary Joint Ventures After ... - Honigman

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