| A MEDAXIOM WEBCAST | |
| The Aftermath of Pediatric Surgical Associates - C-Corp vs. S-Corp | |
| DATE: Wednesday, January 26, 2005 @ 1pm Pacific Time TOPIC: “The Aftermath of Pediatric Surgical Associates - C-Corp vs. S-Corp” GUEST: Taft Group SPEAKERS: From the Law Firm Taft, Stettinius and Hollister in Cincinnati, OH |
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| GENERAL OBJECTIVES: | |
| If you are a C Corp and you haven't developed a strategy for dealing with income from sources other than direct physician services, you need to attend our Web Conference. Examples of such income include ancillary technical income, mid-level practitioner income, employed physician income, clinical research income, etc. | |
| BACKGROUND: | |
| In 2001 the United States Tax Court gave the Internal Revenue Service a way to impose taxable income on medical practice corporations whose compensation payments might be characterized as something other than payments for personal services actually rendered. In the Pediatric Surgical Associates case the Internal Revenue Service recharacterized compensation to owner physicians as dividends, subjecting the deemed dividend amount to corporate tax at the 35% rate. This line of attack has not been reversed or repealed and professional service corporations are subject to increased scrutiny in this area by the Internal Revenue Service.
There are a number of responses which can be made by a professional service corporation to reduce or eliminate the risk of this attack on its compensation structure. Dividing compensation equally or on the basis of individual productivity does not solve the problem if the income generated by the corporation includes income from any sources (including other physicians) other than the services of the doctors who are receiving the pay. Many groups have ancillary service income or income from physician extenders and unless documentation is provided of the full range of services for which compensation is paid, including administrative, management and supervision services, an IRS attack could succeed. Stark prohibits division of ancillary service income based on referrals and the IRS can attack equal division.
We want to inform you of steps which can be taken to minimize or eliminate the impact of the Pediatric Surgical Associates case. We think you and your advisers will find this web-seminar informative, concise and quite possibly a necessary protection against a substantial assessment of tax at the corporate level. |
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| BIOS: | |
| STEPHEN M. NECHEMIAS is a partner in the Tax Department where he has been engaged in the practice of tax law since 1969. He received his B.S. from Ohio State University (1966) and his J.D. from the University of Cincinnati College of Law (1969). Mr. Nechemias was admitted to the Ohio bar in 1969 and also is admitted before the Tax Court of the United States, the United States Court of Claims and the U. S. District Court, Southern District of Ohio. He is a member of the American Bar Association, Taxation Section (Member, Committee on S Corporations), the Cincinnati Bar Association (Chairman, Taxation Section 1985), the Ohio State Bar Association (Chairman 1993-1995; Chairman, Sales and Use Tax Subcommittee of the Taxation Committee, 1989-1991), the Tax Curriculum Committee of the Ohio CLE Institute, and has lectured at numerous continuing legal education programs. Mr. Nechemias served as president of the Board of Trustees of the Legal Aid Society of Cincinnati, and has served as president of the Cincinnati College of Law Alumni Association. His practice areas are principally federal corporate taxation and state and local taxation, including multi-state sales, use, income and franchise tax matters. Mr. Nechemias served as chairman of the Taxation Committee of the Cincinnati Bar Association in 1985 and of the Taxation Committee of the Ohio State Bar Association 1994-1995 and is currently chair of the State and Local Tax Subcommittee of the American Bar Association's Tax Section's Committee on S Corporations. He is listed in The Best Lawyers in America under the tax law specialization. ROBERT E. RICH is the chairman of the Tax, Probate and Estate Planning Department of the law firm of Taft, Stettinius & Hollister LLP. He is also a member of the Executive Committee of the firm. Mr. Rich is a graduate of the University of Kentucky and the Harvard Law School. He served as a law clerk with the United States Court of Appeals for the Sixth Circuit in 1969 and 1970. Mr. Rich practices in the health care and managed care medical field, as well as in general tax planning and the defense of tax issues, exempt organization and private foundation matters, probate administration, estate tax planning and personal service contracting, and in the formation and operation of partnerships and limited liability companies of all kinds. He has had extensive experience in the organization and operation of independent physician associations and multi-specialty medical practice groups. Mr. Rich has been the speaker at numerous seminars such as the Cincinnati Bar Association, C.L.E. Seminars, Southwestern Ohio Tax Institute, Kentucky Continuing Legal Education Law and Medicine Seminar, and the University of Cincinnati College of Medicine Family Practice Seminar. Mr. Rich is a past president of the Cincinnati Bar Foundation and Lighthouse Youth Services Inc. and currently serves as president of the Kentucky YMCA Youth Association. He is currently a Volunteer Associate Professor of Family Medicine at the University of Cincinnati Medical Center. Mr. Rich is listed in The Best Lawyers in America. |
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