Health Care Provider Reference Guide
By Janet E. Gitterman and Marvin Friedlander
Overview
Purpose
The purpose of this article, with the accompanying guide sheet, is to provide
an introduction to and aid in the processing of IRC 501(c)(3) exemption
applications submitted by health care providers, including issues to keep in
mind in evaluating whether activities that “promote health” are also
charitable.
Exhibit 1, Guide Sheet for Hospitals, Clinics and Similar Health Care
Providers, is for the agent’s use in identifying issues specific to health care in
processing applications. A “Q” followed by a number, (Q#) in block labels
(left side of page) refers to questions in the guide.
The information provided in this article is subject to change by published
guidance, court decisions, or tax law changes.
In this Article
This article contains the following topics:
Topic
Page
Overview
1
Qualifying as a Tax-Exempt Health Care Provider
2
Insiders, Disqualified Persons, and Private Benefit
4
Promotion of Health as a Charitable Purpose
9
Meeting the Community Benefit Standard
10
Community Board
11
Open Hospital Staff
12
Corporate Practice of Medicine
13
Emergency Room and Non-Emergency Care
14
Charity Care and Research
15
Private Benefit Issues: Fair Market Value
16
Private Benefit Issues: Compensation
18
Joint Ventures or Partnerships with For-Profit Entities
20
Other Health Care Providers
22
Foundation Status: Hospital
24
Exhibit 1--Guide Sheet for Hospitals, Clinics and Similar
26
Health Care Providers
Appendix A--Sample Conflict of Interest Policy
30
Health Care Provider Reference Guide
Page 1 of 34
Qualifying as a Tax-Exempt Health Care Provider
Promotion of
Health --
Charitable or
Non-charitable
Activity?
The promotion of health for the benefit of the community is a charitable
purpose. Engaging in health care activities alone does not necessarily further
charitable purposes.
For example, in Federation Pharmacy Services, Inc. v. Commissioner,