Healthcare Accounting Services & Nonprofit Healthcare Organizations

Healthcare Accounting Services & Nonprofit Healthcare Organizations

Miami Accounting Service  Gustavo A Viera CPA specializing in Healthcare Accounting Services describes the federal income tax treatment of healthcare organizations that are exempt from tax under §501(a) of the Internal Revenue Code.

Healthcare Accounting Services VieraCPA notes that since many nonprofit healthcare organizations qualify for exemption under §501(c)(3) and how a healthcare organization may qualify as a charity, emphasizing the evolution of the current requirement that the organization be organized and operated for the promotion of health. Miami Accounting Service VieraCPA specializing in Healthcare Accounting Services describes the types of healthcare organizations that may qualify under §501(c)(3) and tells how they may achieve public charity status, either as a per se public organization, a publicly supported organization, or a supporting organization.

Healthcare Accounting Services VieraCPA site presents an overview of the federal income tax laws applicable to nonprofit healthcare organizations, such as hospitals, managed care organizations, and integrated delivery systems. In recent years the healthcare industry has experienced unprecedented change  and growth. Miami Accounting Service VieraCPA specializing in Healthcare Accounting Services notes that hospitals have added ancillary operations to their systems and joint venture arrangements between hospitals and physicians are common. The IRS has ruled on a number of whole-hospital joint ventures and they have been reviewed by the courts as well. More guidance from the IRS for joint venture arrangements, and in particular ancillary joint ventures, is expected to continue as joint ventures become more prevalent.

Healthcare Accounting Services VieraCPA states the importance of these contemporary joint ventures and analyzes the related federal income tax issues. Financing these ventures and the income derived from these operations all must be analyzed for federal income tax purposes. Many of these arrangements and transactions have created a new set of issues for healthcare administrators, Miami Accounting Service specializing in Healthcare Accounting Services and the IRS to resolve, and in some cases present issues of first impression; not only with respect to whether the particular arrangement or transaction may produce unrelated business taxable income, but more importantly, whether the activity may adversely affect the organization’s ongoing tax-exempt status.

In a nutshell, Healthcare Accounting Services VieraCPA notes the requirements for tax-exempt recognition, and what is required to maintain it; physician-hospital relationships; managed healthcare organizations; tax-exempt financing; unrelated business income tax issues; taxable subsidiaries; employment tax issues; IRS audits of hospitals; fundraising activities; and reporting rules.

Miami Accounting Service VieraCPA specializing in Healthcare Accounting Services addresses the IRS has been stressing for some time the importance of a conflicts of interest policy. In the wake of the Enron scandal, and influenced by the Sarbanes-Oxley Act, the governing bodies of healthcare organizations, both for-profit and non-profit, have had to re-examine their corporate responsibilities. Many of these principles are discussed in this Portfolio generally.

Healthcare Accounting Services VieraCPA also details the federal anti-kickback and anti-referral statutes, with which healthcare organizations must comply to maintain their tax-exempt status. It discusses this important body of nontax law which has significant tax implications for all healthcare organizations participating in the Medicare and Medicaid programs.

Finally, Miami Accounting Service VieraCPA specializing in Healthcare Accounting Services notes a number of other issues that have become significant in the healthcare field in recent years. These include transactions with hospital staff physicians; deferred compensation and profit-sharing arrangements with physicians and staff; healthcare partnerships and joint ventures; the status of managed care organizations, including health maintenance organizations; integrated delivery systems and the purchase of physician practices; the unrelated business income tax; the creation and use of for-profit subsidiaries; tax-exempt financing; employment tax issues; IRS healthcare audits; tax and reporting requirements related to fund-raising; and general compliance, filing, and disclosure issues.  Medicare and Medicaid fraud and abuse are addressed. Although not involving federal income tax issues, compliance with the anti-fraud statutes and anti-referral statutes is integrally related to continuing tax-exempt status. Moreover, there are many instances where the IRS rules are at odds with federal fraud and abuse laws. For example, many of incentives permitted by the IRS in the case of physician recruitment would implicate either the federal Anti-Kickback Statute or the anti-referral law, commonly referred to as the “Stark Laws.” Gainsharing arrangements are another example where the IRS provided a favorable ruling only to be found by the Office of Inspector General of the Department of Human Services to violate the federal fraud and abuse laws. This friction is discussed as well as other instances involving transactions with tax-exempt healthcare organizations that may be affected by both federal income tax consequences and the federal fraud and abuse laws.

The Worksheets contain selected IRS publications and determination letters related to current tax issues in the healthcare area. They also include the relevant Medicare and Medicaid statutes.

Healthcare Accounting Services VieraCPA allows you to benefit from:

Hundreds of hours of original research on specific tax planning topics from leading practitioners in this area

  • Invaluable practice documents including tables, charts and lists
  • Plain-English guidance from world-class experts
  • Real-world and in-depth analysis that lets you explore various options
  • Time-saving access to relevant sections of tax laws, regulations, court cases, IRS documents and more
  • Alternative approaches to both common and unique tax scenarios


By Gustavo Viera

Gustavo A Viera, CPA, is the managing partner in Gustavo A Viera, PA, CPA. His experience spans more than 25 years. His public accounting experience includes a senior audit manager at PriceWaterHouseCoopers with a focus in the healthcare industry, and Chief Financial Officer of Hewlett Packard Latin America and Telefonica of Spain. Gus also writes a blog twice a week that addresses issues his clients have at He has also taught in the SBA program in Miami FL, and is admitted to practice in the State of Florida licensed Certified Public Accountant. Gus welcomes questions and he can be reached at Gustavo A Viera, PA, CPA, One Alhambra Plaza Floor PH Coral Gables FL 33134 (786) 250-4450.