Continued IRS Attack on "Zero Out" of Profits

[...]the practice entity (organized as a professional corporation or professional association under local law) will pay little or no federal income taxes. The year-end payments (characterized by the taxpayer as "management fees") were made roughly based on share ownership rather than based...

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Bibliographic Details
Published inJournal of Health Care Compliance Vol. 24; no. 5; pp. 21 - 39
Main Author Levy, Ralph
Format Trade Publication Article
LanguageEnglish
Published Frederick Aspen Publishers, Inc 01.09.2022
Subjects
Boards of directors
Bonuses
C corporations
Closely held corporations
Compensation
Construction
Income taxes
Licenses
Medical practices
Professionals
State court decisions
Stockholders
Tax court decisions
Wages & salaries
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Summary:[...]the practice entity (organized as a professional corporation or professional association under local law) will pay little or no federal income taxes. The year-end payments (characterized by the taxpayer as "management fees") were made roughly based on share ownership rather than based on the value of services provided by each individual who directly or indirectly owned the taxpayer. [...]the taxpayer made payments to the two corporate shareholders rather than to the individuals who performed services on behalf of the corporate shareholders. The Eighth Circuit Court of Appeals rejected the appeal by the taxpayer of the Tax Court's decision and upheld the Tax Court decision.
ISSN:1520-8303