CHAPTER FOURPrivate Inurement, Private Benefit, and Excess Benefit Transactions

  1. § 4.4 Private Inurement—Scope and Types
    1. (j) Provision of Healthcare Services to One Individual or Family
    2. (k) Business Referral Operations
    3. (l) Still Other Forms of Inurement
  2. *§ 4.6 Essence of Private Benefit
  3. § 4.9 Excess Benefit Transactions
    1. (a) General Rules


p. 104. Insert following carryover paragraph, before heading:

(j) Provision of Healthcare Services to One Individual or Family

Organizations will be denied recognition of tax exemption as charitable entities, on the ground of private inurement, if healthcare services are provided to only one individual or family. For example, an organization was denied exempt status because a substantial portion of its funds was to be used to pay for the medical and rehabilitative care of an individual who was related to each of the trustees of the organization.197.1 A nonprofit organization established to negotiate, receive funds, organize, and manage support for three special‐needs children of a family was denied recognition of exemption.197.2 A trust was held ineligible for exemption as a charitable entity because its function was to pay a family's medical expenses in the aftermath of an automobile accident.197.3 An organization formed to benefit children with special medical needs failed to qualify for exemption where it was operated for the benefit of one individual.197.4 An organization formed for the benefit ...

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