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Petitioner operated an office known as Network Services that
negotiated and managed contracts between Health Services and
insurance carriers, third-party administrators, and independent
HMOs.
Petitioner employed between 600 and 700 employees during the
3-year period 1997 to 1999.
D. IHC Foundation, Inc.
IHC organized IHC Foundation, Inc. (Foundation) to support
IHC’s and its tax-exempt affiliates’ charitable, educational, and
scientific activities. Foundation received funds from grants,
donations, and other sources. Respondent recognized Foundation
as an organization described in section 501(c)(3) that is exempt
from taxation pursuant to section 501(a), and as a public charity
pursuant to sections 509(a)(1) and 170(b)(1)(A)(vi).
E. IHC Insurance Company, Inc.
IHC organized IHC Insurance Company, Inc., (Insurance) as a
for-profit insurance company. Insurance, which operated on Grand
Cayman Island, provided IHC, Health Services, and petitioner with
access to reinsurance coverage.
F. Control
IHC had effective control of its affiliates, including
Health Services, petitioner, Care, and Group, all of which were
subject to the ultimate governance and control of IHC’s board of
trustees and corporate managers. Health Services, petitioner,
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