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Taxation & Benefits
Squire Sanders advises tax exempt organizations of all sizes on US federal, state and local tax matters. This experience includes formation of nonprofit entities under state law, obtaining and maintaining tax exempt status under the US Internal Revenue Code, as well as exemption from state and local income, franchise, sales/use and property taxes.
We advise exempt organizations, including many hospitals, on various operational issues including compensation issues and the application of the “intermediate sanctions” provisions of the Internal Revenue Code. We have reviewed joint ventures, acquisitions, restructurings and business proposals with respect to their effect on the exempt status of the organization and the treatment of the income from such arrangements for purposes of the unrelated business income tax (UBIT).
Our experience includes:
- Reviewing more than 100 joint ventures between healthcare systems and for-profit entities (ambulatory surgery centers, cardiac cath labs, radiology services and rehabilitation services) including analysis of issues raised by IRS Revenue Rulings and case law.
- Representing exempt organizations in IRS audits; issues include compensation, unrelated business income, joint venture analysis and deferred compensation arrangements.
- Reviewing compensation policies of exempt organizations operating assisted living and retirement facilities.
- Advising large hospital systems on federal income tax requirements in various areas (employment tax, unrelated business income, compliance with intermediate sanctions provisions, physician recruitment, Form 990 disclosure issues and company counsel on issuance of tax exempt bonds).
- Reviewing retirement packages provided by exempt organizations to CEOs including analysis of federal income tax and director fiduciary issues.
- Reviewing employment tax issues including treatment of physicians and other medical personnel as employees or independent contractors.
- Reviewing management agreements between exempt organizations and for-profit managers.
- Analyzing international operations of exempt organizations.
- Reviewing Form 990 (annual tax return) to ensure compliance with IRS disclosure requirements.
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