Tax Matters: For-Profit and Exempt Organization Issues

Davis Wright Tremaine tax lawyers provide comprehensive services to taxable and tax-exempt purchasers, payers and providers of health care services. The firm's tax lawyers work in multi-disciplinary teams with health care lawyers to respond to specific client needs.

With regard to tax-exempt organizations, the firm provides tax advice on issues such as qualification for tax-exempt status, avoidance of private inurement and private benefit, application of the tax on unrelated business income and restructuring to avoid the impact of such taxes, obtaining IRS private letter rulings, and the proper structuring of capital-raising transactions to meet the requirements of the provider's tax-exempt status. The tax group has a close working relationship with the national office of the IRS dealing with exempt organizations, and is uniquely qualified to advise on the IRS's thinking on issues of tax exemption in the health care context.

Examples of the firm's representation of tax-exempt institutions include:

• Obtaining a determination of tax-exempt status from the National Office of the IRS for the first tax-exempt integrated delivery system approved by the IRS in the 1990's.



• Advising on the conversion of tax-exempt organizations to proprietary corporations, and the implications of such transactions under state charitable trust and federal tax law.



• Forming a limited liability company and affiliated professional corporation through which two tax-exempt health systems conduct a large, regional primary care network.

Increasingly, proprietary models of health care financing and delivery are predominating in the marketplace. The tax group provides sophisticated advice in structuring such for-profit enterprises, including counseling on choice of legal entity, and structuring acquisitions and mergers to minimize federal and state tax consequences and maximize capital access. The firm's tax attorneys work closely with the firm's securities practice in structuring private placements and public offerings.

Examples of the firm's transactions on behalf of for-profit organizations include:

• Structuring the tax-free consolidation of licensed health plans.



• Organizing single-specialty and multi-specialty physician networks as public and private companies. Providing ongoing legal advice to national proprietary ancillary service providers.

visit DWT's Tax-Exempt Organizations page

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