AICPA Asks IRS to Provide Guidance to Patients

The American Institute of CPAs (AICPA) has asked the Internal Revenue Service (IRS) to issue guidance, in the form of additional examples to Rev. Rule 68-376, recognizing that the term “patient” encompasses individuals directly or indirectly receiving clinical diagnosis and/or treatment through telemedicine modalities.

“In the existing guidance, all examples of ‘hospital/patient nexus’ involve in-person interaction between the patient and the provider of medical care,” the July 6 letter explained. “Where there is no in-person interaction, it is not clear whether the IRS would find sufficient hospital/patient nexus. This gap in the tax law has led to inconsistent application of the tax rules within the healthcare provider community relating to whether the income from telemedicine services is unrelated business taxable income (UBTI).

“Charitable healthcare organizations conduct their exempt activities in a broader way today than at the time Rev. Rul. 68-376 was released,” the letter stated. “We suggest that the IRS add examples to Rev. Rul. 68-376 to clarify that “patients” exist in many contexts which includes, but is not limited to, laboratory services, sales of durable medical equipment, and telemedicine services. Although this position is a logical application of existing precedent to provider telemedicine activity, new guidance is necessary to clarify current conflicting interpretations within the healthcare provider community.”

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