IHC Health Plans, Inc. - Page 34

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          Rev. Rul. 69-545, supra.  Specifically, Sound Health Association            
          adopted a plan to accept contributions for the purpose of                   
          subsidizing membership for those who could not otherwise afford             
          to pay the full amount of monthly dues.  Further, Sound Health              
          Association’s practice of offering membership to the public at              
          large demonstrated that the class of persons eligible to benefit            
          from the organization’s activities was practically unlimited.               
          Sound Health Association v. Commissioner, supra at 184-185.                 
               We rejected the Commissioner’s argument that Sound Health              
          Association provided an unwarranted private benefit to its                  
          members.  We reasoned that, like the hospital deemed exempt in              
          Rev. Rul. 69-545, supra, which (except in emergency cases)                  
          limited its treatment to paying patients, Sound Health                      
          Association was permitted to restrict its services to paying                
          members.  Sound Health Association v. Commissioner, supra at 186-           
               The tax-exempt status of an HMO arose again in Geisinger               
          Health Plan v. Commissioner, T.C. Memo. 1991-649 (Geisinger I),             
          revd. and remanded 985 F.2d 1210 (3d Cir. 1993) (Geisinger II),             
          opinion on remand 100 T.C. 394 (1993) (Geisinger III), affd. 30             
          F.3d 494 (3d Cir. 1994) (Geisinger IV).  Geisinger HMO, like                
          petitioner in the instant case, was part of a group of related              
          organizations forming a large health care network (the Geisinger            

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