About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

19 Health Law. 1 (2006-2007)

handle is hein.journals/healaw19 and id is 1 raw text is: THE ABA HEALTH LAW SECTION H EALTH HLAWYER IN THIS ISSUE THE PRICE IS RIGHT! - TAXPAYERS PREVAIL IN THE FIRST CASE TO The Price is Right! - Taxpayers Prevail in the First Case to REVIEW IRS IMPOSITION OF Review IRS Imposition of Intermediate Sanctions .............. 1 INTERMEDIATE SANCTIONS Of PACS and Trolls: How the Patent Wars May Be Coming to a Hospital Near You ................. 15 Advance Directives Day: A Story of Success, A Call to Action, and A How-To Manual ............. 21 Health Care Providers' Rights to Refuse to Provide Treatment on the Basis of Moral or Religious Beliefs ............................... 25 The Quality Variable in Hospital Merger Analysis ................. 34 Volume 19, Number 1 October 2006 Bernadette M. Broccolo, Esq. Elizabeth M. Mills, Esq. McDermott Will & Emery LLP Chicago, IL Robert C. Louthian, Esq. Amy Hooper Kearbey, Esq. McDermott Will & Emery LLP Washington, DC Introduction In the first case arising under the intermediate sanction provisions of Section 4958 of the Internal Revenue Code, the United States Court of Appeals for the Fifth Circuit (the 5th Circuit or the court) delivered a blow to the Internal Revenue Service (IRS) by ruling against the IRS's imposition of Section 4958 excise taxes and its revoca- tion of the Section 501 (c) (3) status of the exempt organizations.' Whereas the United States Tax Court had been willing to overlook a flawed business valuation offered by the IRS in support of its actions and to impose sanctions based on the Tax Court's own valuation analysis, the 5th Circuit concluded that the Tax Court made errors as a matter of law and erro- neous factual findings, reversed the Tax Court's decision, and rendered the case against the IRS. The court's decision not to remand the case was based on its conclusion that even on remand the Commissioner would be unable to meet his burden of proving that the individual disqualified persons involved had received exempt organization assets with a value in excess of the consideration the individuals had paid the assets.' This decision, which comes ten years after the enactment of Section 4958, boldly underscores (1) the critical impor- tance of securing a proper valuation - both as to valuation methodologies and the factual assumptions used in the analy- sis - to demonstrate that a transaction with a disqualified person3 (or insider) does not result in excess benefit or private inurement, and (2) the unique complexi- ties and challenges that can arise in securing a proper valuation of a health care business entity. The 5th Circuit's brutal analysis and commentary concern- ing the IRS's handling of the procedural and substantive aspects of the case also provide clear insights into related tax planning and tax controversy considera- tions and strategies, such as satisfying the appropriate data prong of the Section 4958 rebuttable presumption criteria, the continued on page 3

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most