Originally published in Healthcare Michigan, Volume 40, No. 9 Adverse tax issues can arise for physicians and other professional practice groups interested in issuing equity to attract and retain junior physicians. If equity is issued at below fair market value, the new equity owner will incur significant federal income tax consequences on issuance. If the new …
Continued IRS Attack On ‘Zero Out’ Of Profits
A prior article in this publication (IRS Attack on Zeroed Out Taxable Income in Recent Tax Court Cases) discussed the lessons that physician and other incorporated medical practice groups could learn from taxpayer losses in two then recent Tax Court cases in use of the “zero out” technique in the payment of compensation to the …
Continue reading “Continued IRS Attack On ‘Zero Out’ Of Profits”
IRS ATTACK ON THE “ZERO OUT” IN RECENT TAX COURT CASES
Taxpayer losses in two recent Tax Court cases serve as reminders that physician and other incorporated medical practice groups should take care in the “zero out” approach to the payment of compensation to the group’s owners and that success in this area may depend on whether the practice is organized as a “C” corporation or …
Continue reading “IRS ATTACK ON THE “ZERO OUT” IN RECENT TAX COURT CASES”
The OIG’s FAQs Related to COVID-19
The Office of the Inspector General (“OIG”) for the Department of Health and Human Services (“HHS”) has developed a process for interested parties to obtain regulatory compliance guidance from the OIG prior to pursuing arrangements related to COVID-19. The OIG has dubbed this process FAQs–Application of OIG’s Administrative Enforcement Authorities to Arrangements Directly Connected to the Coronavirus Disease …
Stark Law and Anti-Kickback Statute Waivers for COVID-19
In light of the COVID-19 pandemic, on March 30, 2020, the Secretary of the U.S. Department of Health and Human Services (the “Secretary”) released blanket waivers (the “Waivers”) under Section 1135 of the Social Security Act (the “Act”) as to certain referral-related activities that would normally result in sanctions under the Federal Physician Self-Referral Law, …
Continue reading “Stark Law and Anti-Kickback Statute Waivers for COVID-19”
IRS Issues Proposed Regulations On Deduction for Owners of Pass-Through Businesses: The Good, Bad and Ugly for Health Care Providers
In early August, the Internal Revenue Service (IRS) issued proposed regulations that provide guidance to owners of pass-through businesses as to eligibility for a federal tax deduction of 20% of the income generated by the businesses. This deduction was part of the Tax Cuts and Jobs Act (TCJA). Although the stated purpose of the proposed …
Caution As To Compensation Paid By Professional Corporations
Two recent Tax Court cases raise caution flags as to the deductibility of shareholder compensation by medical, dental and other professional practice groups organized as professional corporations (PCs) or professional associations (PAs) that are taxed as “C” corporations for federal tax purposes. In each case, on audit, the IRS sought to disallow deductions for a …
Continue reading “Caution As To Compensation Paid By Professional Corporations”