Radiology Business

Authors: Paul W. Pitts Thomas W. Greeson

The Internal Revenue Service is moving toward a more flexible approach when evaluating contacts between tax-exempt entities—such as many hospitals—and private, for-profit entities such as radiology groups.

With the release of IRS Rev. Proc. 2016-44, the IRS is replacing Rev. Proc. 97-13 with a new approach for hospital bond counsel to evaluate contacts like radiology group-hospital professional services agreements to assure they do not constitute impermissible “private activity” use of tax-exempt bond financed properties.

The current IRS regulations restricting the term of professional service agreements or management contracts between tax-exempt hospitals and hospital-based physicians have been in place for almost 20 years... Continue Reading