IRS determination letter - Hospital “cooperative” not qualifying under section 501(e) 

August 18:  The IRS publicly released a final adverse determination letter, concluding that a corporation does not qualify as a “hospital cooperative” under section 501(e). LTR 201433018 (released August 15, 2014; dated May 20, 2014)

Read text of the determination letter: LTR 201433018 [PDF 495 KB]


The applicant’s articles of incorporation set forth that the purpose of the corporation is to enhance collaboration and development of shared services among nonprofit hospital members.


The IRS, however, determined that the corporation does not qualify as a cooperative hospital service organization under section 501(e) because: (1) it is not organized or operated on a cooperative basis; and (2) it is not organized and operated solely to perform on a centralized basis a service enumerated in section 501(e)(1)(A).



For more information, contact KPMG’s National Director of Cooperative Tax Services:


David Antoni, in Philadelphia

(267) 256-1627


Or Associate National Director of KPMG’s Cooperative Tax Services


Brett Huston, in Sacramento


(916) 554-1654




©2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

Share this

Share this

Subscribe

Current and future KPMG clients may subscribe to TaxNewsFlash email alerts.


Email your contact information.

TaxNewsFlash-Cooperatives by year