Joint Ventures Involving Tax-Exempt Organizations, 4th Edition

CHAPTER 12Healthcare Entities in Joint Ventures

1. § 12.1 Overview
2. § 12.2 Classifications of Joint Ventures
3. § 12.3 Tax Analysis
4. § 12.4 Other Healthcare Industry Issues
5. § 12.5 Preserving the 50/50 Joint Venture
6. § 12.9 Government Scrutiny
7. § 12.11 The Patient Protection and Affordable Care Act of 2010: § 501(r) and Other Statutory Changes Impacting Nonprofit Hospitals
8. § 12.12 The Patient Protection and Affordable Care Act of 2010: ACOs and Co-Ops: New Joint Venture Healthcare Entities

§ 12.1 OVERVIEW

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Many of the changes enacted in the 2017 Tax Act (Pub. Law 115-97) applicable to tax-exempt organizations affect the healthcare sector in significant ways. As described in Section 2.1 and subsections 14.1 (b) (ii), (iii), and (iv), these new provisions create additional financial burdens, including additional accounting, administrative, and reporting obligations.

In regard to its no-rule on joint ventures, the IRS issued Rev. Proc. 2018-3,^13.1 adding language clarifying that it also will not address whether a joint venture furthers an exempt purposes. The current language states that the IRS will not rule on “Whether a joint venture between a tax-exempt organization and a for-profit organization affects an organization's exempt status, furthers an exempt purpose, or results in unrelated business income.”

However, the IRS has indicated that it is “interested in thinking about whether we can ...