- 61 -
Most importantly, the Friendly Hills determination letter, as
petitioners concede on brief, pursuant to section 6110(j)(3)38 "may
not be used or cited as precedent."
Similarly, although the instruction manuals generally
describe methods by which an integrated delivery system may be
formed, including acquisition of medical group assets "by
donation, fair market value purchase, lease, license, stock
transfer or a combination thereof" (emphasis added), those
publications also focus on mergers of nonprofit hospitals or
medical foundations with physician groups from the standpoint of
the former entities' qualification for tax-exempt status under
section 501(c)(3). Similar to the Friendly Hills determination
letter, the instruction manuals do not specifically address the
charitable contribution issue, which accounts for their failure to
emphasize the requirement of donative intent in connection with
any "donation" of assets by the physicians. Moreover, the
introduction to each annual edition of the instruction manuals
contains the following statement: "The text is for educational
purposes only. It is not authority, and may not be cited as
such."
37(...continued)
basis of the Houlihan appraisal used by petitioners for purposes
of filing their 1994 returns (but now abandoned by them), the
claimed donations would constitute approximately 41 percent of
the value of SWMG ($1,632,377 intangibles/$4 million business
enterprise value).
38 Currently codified as sec. 6110(k)(3).
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