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

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