Media Mentions
2010
“IRS Steps Up Scrutiny of Colleges and Other Nonprofit Groups”
The Chronicle of Higher Education, December 20, 2010
Michael Peregrine warned that a 42 percent increase in Internal Revenue Service audit of charities means that “the IRS is still fully engaged in oversight of tax-exempt organizations.”
Michael W. Peregrine, Nonprofit Organizations, Tax Exemption
“Charitable Deduction Under Scrutiny”
The Chronicle of Philanthropy, November 28, 2010
“As National Debt Soars, Federal Government Takes Second Look at Charitable Deduction”
Philanthropy News Digest, December 1, 2010
Michael Peregrine acknowledged the possibility that the federal tax charitable deduction could be limited or eliminated because the government is “in full deficit-reduction mode.” Mr. Peregrine warned that leaders of tax-exempt organizations should prepare for tighter deduction restrictions: “I’m telling boards, it may be five years away, it may be10 years away; you’ve got to start planning this now.”
Michael W. Peregrine, Tax Exemption
“Location, Location”
Financial Advisor Magazine, November 2010
Peter Faber illustrated how a determination by taxing authorities on an individual’s permanent home (domicile) can have a major impact on tax liability. “There are cases where people have spent more than half their time in Florida, but nevertheless have been found to be domiciled in New York,” Mr. Faber noted. “Since Florida doesn’t have an income tax, the taxpayer can take a significant hit.”
Peter L. Faber, Tax, Tax Controversy, Tax Exemption
Michael Peregrine commented for BNA’s Daily Health Care Report (May 28) on the Internal Revenue Service’s new requirements for hospital organizations to qualify for federal tax exemption. The IRS issued the requirements in accord with provisions of the health care reform law, and Mr. Peregrine said that “the original provisions of the [law] sketched the legislative expectations only in the broadest possible strokes…. We all knew the devil was in the forthcoming details.” He added that the IRS requirements contain useful “nuggets” of clarification and guidance, particularly with regard to the definition of “extraordinary collection actions” by exempt hospitals.
Michael W. Peregrine, Health, Tax Exemption
Michael Peregrine commented on March 29 for Modern Healthcare regarding the impact of the health care reform law on tax-exempt hospitals. The law requires these hospitals to take a variety of steps to demonstrate they are fulfilling all their community and financial assistance responsibilities. Mr. Peregrine considered it unlikely that not-for-profit hospitals could lose their tax-exempt status under the law, but he warned that flouting the law could result in public relations difficulties beyond the law’s $50,000 penalty for falling short of their charity care obligations.
Michael W. Peregrine, Health, Tax Exemption
Michael Peregrine was quoted in a January 4 Modern Healthcare story about how tax-exempt hospitals and health systems are likely to face more scrutiny than ever from federal regulators, state prosecutors, the media and the general public. Governance is an especially hot issue, because, as Mr. Peregrine noted, “The IRS has clearly seen enough examples of bad boards where they know what they look like. If you’re really pushing the edge of the envelope in a way that is not supportable, you’re going to see more challenges from the IRS” and from state attorneys general over governance matters. And, Mr. Peregrine added, if malfeasance is found, regulators will push for resignations of board members as well as executives.
Michael W. Peregrine, Corporate Responsibility and Governance, Health, Nonprofit Organizations, Tax Exemption
2009
Michael Peregrine was quoted by Tax Analysts on August 11 concerning plans by the IRS Tax Exempt/Government Entities (TE/GE) Division to set up a “corporate” approach with centralized oversight to identify tax fraud in tax-exempt organizations. He noted that exempt organization (EO) audit and compliance committees will need details on what kind of tax fraud the TE/GE Division is targeting. “It will be incumbent on the agency to increase EO community awareness as to the specific indicia of criminal fraud – what kind of conduct are we talking about, specifically, beyond the obvious,” Mr. Peregrine stated. “The EO community will need details.
Michael W. Peregrine, Tax Exemption
Bernadette Broccolo was quoted in the July 6 issue of Modern Healthcare regarding the assertion by new IRS commissioner Sarah Hall Ingram that the IRS will more closely scrutinize governance practices of not-for-profit hospitals to ensure that they do not abuse their tax exemption. Noting that Ingram is building on the policies of her predecessor in pursuing once-controversial governance oversight, Ms. Broccolo said of the IRS: “They are going forth with confidence in that position. We’re not going to see a reversion to circumspection.”
Bernadette M. Broccolo, Health, Nonprofit Organizations, Tax Exemption
Michael Peregrine was quoted in the May 21 BNA Daily Health Care Report concerning proposed federal legislation to codify the requirements for determining if a hospital qualifies for tax-exempt status. Noting that the battle for hospital tax exemption standards has now been joined, although the details are not yet clear, Mr. Peregrine believes one clear component that will be defined is the concept of a minimum level of charitable patient care. "The other requirements don't necessarily carry the same level of concern as does the minimum level of care," he said, "although the annual community needs analysis could become somewhat of a burden if not precisely drawn." Mr. Peregrine added that the interesting debate will be over the definitions of "minimum level" and "charitable patient care."
Michael W. Peregrine, Health, Tax Exemption
Neil Kawashima was quoted on March 2 in The Chronicle of Philanthropy regarding President Obama's proposal to reduce the value of the charitable deduction for wealthy Americans. Mr. Kawashima commented that people who are considering types of giving that offer one-time, upfront charitable deductions on their federal taxes may especially be tempted to consider acting before the deduction rate falls. Although, Mr. Kawashima said that fund raisers may have a difficult time enticing donors to give more due to the bad economy, "Most people are feeling tapped out already," he said.
Neil T. Kawashima, Nonprofit Organizations, Private Client, Tax Exemption
Neil Kawashima was quoted on March 1 in The Wall Street Journal regarding nonprofit organizations criticism of the proposed limits to charitable deductions in President Barack Obama's budget plan. Critics argue that the decreased deduction rates will be an additional hindrance to nonprofits already struggling with a steep drop-off in donations. However, the change could cause an increase in donations before the new law takes effect. Mr. Kawashima said, "The only silver lining out of this is charities can try to argue that donors should prepay pledges now so that they can take advantage of the deduction sooner rather than later."
Neil T. Kawashima, Nonprofit Organizations, Private Client, Tax Exemption
Michael Peregrine was quoted on February 26 in The Chronicle of Philantrophy regarding the new Internal Revenue Service report on tax-exempt hospitals and executive compensation. Mr. Peregrine commented that, "charities need to take heed: Lawmakers and the American public today are questioning any institution that receives government assistance – whether it's bailout money or beneficial tax treatment." He continued, "They are saying, In this environment, with huge economic problems and deficits, tell me again why we are providing certain groups with tax exemptions….The IRS is saying, Everybody here play by the rules. And the broader charitable sector should say, All right, let me understand again what are those rules and double-check we are complying with them."
Michael W. Peregrine, Health, Nonprofit Compensation, Nonprofit Organizations, Tax Exemption
Michael Peregrine was quoted on February 26 in The Chronicle of Philanthropy regarding the criticism of Obama's plan to reduce charitable deductions for the wealthy. Mr. Peregrine said charities now face three factors that could cut into their deductions including, the bad economy, the proposed charitable-deduction limits and proposals by President Obama to end tax cuts for wealthy people that were introduced by President Bush. Mr. Peregrine is concerned that charities that are hurting for donations will be more susceptible to fund-raising scams. He said, "What is certain is that the perception that this will reduce charitable donations in the short term is going to draw out the fraudsters."
Michael W. Peregrine, Health, Nonprofit Organizations, Tax Exemption
Michael Peregrine was quoted on February 18 in the Chronicle of Philanthropy in an article regarding the recent report issued by the Internal Revenue Service regarding tax-exempt hospitals and executive compensation. Mr. Peregrine warned that charities need to take notice—lawmakers are paying particular attention to any institutions receiving government assistance. "They are saying, In this environment, with huge economic problems and deficits, tell me again why we are providing certain groups with tax exemptions," Mr. Peregrine said. "The IRS is saying, Everybody here play by the rules. And the broader charitable sector should say, All right, let me understand again what are those rules and double-check that we are complying with them," he added.
Michael W. Peregrine, Health, Nonprofit Compensation, Nonprofit Organizations, Tax Exemption
Michael Peregrine was quoted on February 16 in Modern Healthcare in an article regarding the Internal Revenue Service (IRS) report on nonprofit hospital executive pay and community benefits. The IRS found that executive pay at nonprofit hospitals is uneven compared to the community benefits provided by nonprofit hospitals. Mr. Peregrine noted that "the reports release amid public outcry over payouts to executives at failed corporations could put not-for-profit hospitals on the defensive." He added that the unfortunate timing may overshadow positive survey results that show hospitals largely comply with regulations, "The report makes it clear that hospitals have been playing by the rules," Mr. Peregrine noted. Mr. Peregrine provided similar comments regarding the IRS report to BNA's Health Care Reporter and EO Tax Today.
Michael W. Peregrine, Health, Nonprofit Compensation, Nonprofit Organizations, Tax Exemption
2008
Michael Peregrine was quoted in the December 25 issue of BNA’s Health Law Reporter in an article regarding Senior Chuck Grassley discussing the possibility with other lawmakers of crafting legislation that would establish charity care and community benefit standards for nonprofit standards for nonprofit hospitals and accountability benchmarks for assessing whether exempt hospitals actually are meeting those standards. "Hospitals should not necessarily take comfort from the fact that Sen. Grassley’s previous efforts in this area never went anywhere," Mr. Peregrine said.
Michael W. Peregrine, Health, Hospital and Health System Transactions, Nonprofit Organizations, Tax Exemption
Michael Peregrine was quoted in the November 3 issue of Modern Healthcare in an article regarding a case in the Virgin Islands where a board chair for a public hospital was arrested and charged for an alleged role in what prosecutors describe as a "criminal enterprise" among the top three executives. Hospital trustees on the mainland may wonder what it says, if anything, about their own risk of becoming targets when things go horribly wrong under their watch. "We are entering into an environment of recrimination, and there will absolutely be spillover in the nonprofit world against boards for what I call preventable harm,'' Mr. Peregrine said.
Michael W. Peregrine, Corporate Responsibility and Governance, Health, Nonprofit Organizations, Tax Exemption
Michael Peregrine was quoted in the October 20 issue of Modern Healthcare in an article regarding Senator Chuck Grassley's intention to introduce new legislation in January that will attempt to define exact standards for tax exemption of not-for-profit hospitals, including community benefit. "The GAO report doesn't include any findings definitive enough to justify creating federal legislation mandating how not-for-profit hospitals report their community benefit-especially if that could lead to quotas. It doesn't provide the smoking gun that opponents of tax exemptions were looking for,'' Mr. Peregrine said.
Michael W. Peregrine, Health, Nonprofit Organizations, Tax Exemption
Michael Peregrine was quoted in the October 7 issue of The Chronicle of Philanthropy in an article regarding the growing questions about the recent actions and responsibilities of boards of deeply troubled U.S. banks and companies that will eventually also be felt by nonprofit organizations. "A spillover to charities from some of the events going on in Wall Street and Washington is probable. Boards of tax-exempt organizations are beginning to brace themselves for the spillover: this climate of responsibility and possibly recrimination," Mr. Peregrine said.
Michael W. Peregrine, Corporate Responsibility and Governance, Health, Markets Restructuring, Tax Exemption
Ralph DeJong was quoted in the September 17 issue of BNA's Daily Tax Report in an article regarding the forthcoming guidance on tax code Section 457(f). "There are numerous opportunities under other available methods that are less onerous than 457(f) for executives of tax-exempt organizations to make elective deferrals of compensation that can be vested without running into some of the problems associated with Section 457(f)," Mr. DeJong said.
Ralph E. DeJong, Health, Tax Exemption
Michael Peregrine was quoted in the August 25 issue of Modern Healthcare in an article regarding the final revisions to the IRS' Form 990 for not-for-profit hospitals and other tax-exempt organizations. "Boards face more explicit questions on conflicts-of-interest, director and trustee independence, and board review of public reporting," said Mr. Peregrine.
Michael W. Peregrine, Health, Tax Exemption
Michael Peregrine was quoted in the August 20 issue of Tax Analysts in article discussing the final instructions for the redesigned Form 990. "It will require tax-exempt organizations to confront potentially sensitive issues relating to board structure, conflicts management, and disclosure of compensation, as well as business and financial relationships between board members," Mr. Peregrine said.
Michael W. Peregrine, Corporate Responsibility and Governance, Health, Tax Exemption
Michael Peregrine was quoted in the August 20 issue of BNA's Health Care Daily in an article discussing the final instructions for the redesigned Form 990. "The final instructions to the Form 990 are indeed a significant tax planning document because they underscore, in bold type, the significance attributed by the IRS to effective governance of tax exempt organization," Mr. Peregrine said.
Michael W. Peregrine, Corporate Responsibility and Governance, Health, Tax Exemption
Michael Peregrine was quoted in the August 19 issue of The Chronicle of Philanthropy in an article discussing the final instructions for the redesigned Form 990. "These instructions are an exclamation point to the broad IRS discourse on the importance of corporate governance that has been Steve Miller's mantra for the last 24 months," Mr. Peregrine said.
Michael W. Peregrine, Corporate Responsibility and Governance, Health, Tax Exemption
Michael Peregrine was quoted in the August 6 issue of Tax Analysts in an article regarding revisions to the draft instructions to the redesigned Form 990 in response to public comments. "At least from a governance perspective, the IRS took seriously the comments it received on the draft instructions. Exempt organizations might want to review the final instructions closely for their implications on corporate governance, which are likely to be significant," Mr. Peregrine said.
Michael W. Peregrine, Health, Tax Exemption
Michael W. Peregrine was featured in the August 1 issue of Corporate Counsel in an article regarding a nine-step process by which nonprofit board and executive leadership can work together to enhance the profile of a nonprofit General Counsel.
Michael W. Peregrine, Health, Tax Exemption
Michael W. Peregrine was quoted in the July 1 issue of The Wall Street Journal in an article regarding the dismissal of appeals against ex-New York Stock Exchange Chairman Richard Grasso to return a portion of his $187.5 million compensation package. "It's an incomplete decision from a nonprofit perspective. We're not going to have real closure on the merits. Having closure on merits would have provided some guidance to volunteer directors," Mr. Peregrine said.
Michael W. Peregrine, Health, Tax Exemption
Michael Peregrine was quoted in the May 1 issue of BNA's Health Law Reporter in an article regarding the IRS not backing off of its plan to put more pressure on charities to develop better governance plans. "The comments of the current and former IRS officials underscore the significant level of governance oversight activity at the federal level, provide guidance on specific areas of legislative and regulatory concern with respect to governance, and give counsel meaningful 'ammunition' as they seek to advise their client executives and boards concerning the reasons for, and extent of, IRS and Senate Finance Committee Interest," Mr. Peregrine said.
Michael W. Peregrine, Health, Tax Exemption
Ralph DeJong was quoted in the April 14 issue of Modern Healthcare Online in an article regarding instructions for not-for-profit hospitals and health systems using the new Form 990. "Draft instructions released last week could significantly expand the number of key hospital and health system employees whose pay, bonuses and benefits must be reported," Mr. DeJong said.
Ralph E. DeJong, Health, Tax Exemption
Ralph E. DeJong was quoted in the April 14 issue of Modern Healthcare regarding the new IRS Form 990. "Draft instructions released last week could significantly expand the number of key hospital and health system employees whose pay, bonuses and benefits must be reported," said Mr. DeJong.
Ralph E. DeJong, Health, Tax Exemption
Michael Peregrine was quoted in the March 28 issue of TaxAnalysts in an article regarding the new final regulations under section 4958 that were released by the IRS making clear that tax-exempt organizations that become involved in excess benefit transactions with disqualified persons will be in better shape if they discover the problem and take corrective action before the IRS gets involved. "The final regulations are significant from a corporate governance perspective. The regulations show that an organization's board must be aware of the circumstances under which excess benefit transactions can put exemption at risk," Mr. Peregrine said.
Michael W. Peregrine, Corporate Responsibility and Governance, Health, Tax Exemption
Ralph DeJong was quoted in the March 21 issue of TaxAnalysts in an article regarding Part IV instructions for the hospital schedule of the redesigned Form 990. "This would be an explanation that many hospitals have until now included in their program services accomplishments section attached to their 990, and now that information has to be an express, explicit portion of the Schedule H filing," Mr. DeJong said.
Ralph E. DeJong, Health, Tax Exemption
Ralph DeJong was quoted in the March 21 issue of BNA's Health Law Reporter in an article regarding the IRS intending to issue instructions for the new Form 990. "Entities need to prepare now for the new form. The new form begins operationally on the first day of the fiscal year beginning in 2008 and calendar year filers should have started to collect data and expand data," Mr. DeJong said.
Ralph E. DeJong, Health, Tax Exemption
Michael Peregrine was quoted in the March 6 issue of BNA's Health Law Reporter in an article regarding the IRS' releasing of an updated memorandum detailing those organizational structures and operational policies that it believes will improve governance of tax-exempt organizations. "The memorandum sheds important new light on the IRS' view of such important issues as governing board size, diligence and composition; oversight of sophisticated investment vehicles; and document retention and whistleblower policies," Mr. Peregrine said.
Michael W. Peregrine, Corporate Responsibility and Governance, Health, Tax Exemption
Ralph DeJong was quoted in the January 7 issue of Modern Healthcare in an article regarding the overhauled Form 990 and its governance policies and executive pay and perks, including executive compensation breakdown. "This will end up being a far more reliable picture of compensation and all of its constituent elements," commented Mr. DeJong. Organizations that had hoped to avoid disclosing unusual perks for key officers are out of luck, added DeJong, who said tax officials responded to criticism of its draft with “smart and savvy” changes.
Ralph E. DeJong, Health, Tax Exemption
2007
Michael Peregrine was quoted in an August 6 article published by Crain’s Chicago Business regarding Chicago-area hospitals boosting spending on free medical care by $187.4 million and being scrutinized for their charitable practices. "Hospitals will need to fight to show the value they provide in exchange for their tax exemptions," Mr. Peregrine said.
Michael W. Peregrine, Health, Tax Exemption
Ralph DeJong was quoted in the June 18 issue of Modern Healthcare in an article regarding the IRS expanding public reporting of what not-for-profit hospitals do for their communities to justify federal tax breaks. “The agency’s ambitious schedule leaves not-for-profits little time to review and change operations or governance policies, if necessary, before the start of fiscal 2008. For hospitals and health systems, the changes are likely to be substantital,” Mr. DeJong said.
Ralph E. DeJong, Health, Tax Exemption
Bernadette M. Broccolo was quoted in the June 4 issue of Modern Healthcare in the cover story regarding how the IRS’ updated reporting rules for tax-exempt organizations could require full disclosure on community benefits and charity care. Revisions to Form 990 that boost data collection and public access could head off congressional action. “The legislative process would most likely take a lot more time for the kind of reforms (Baucus and Grassley are) looking for,” Ms. Broccolo said.
Bernadette M. Broccolo, Health, Tax Exemption
Peter Faber was quoted in the May 29 issue of Dow Jones Newswires about several steps to guard against being doubly taxed if you live in one state but spend a lot of time relaxing in another. "There are an awful lot of people who play games with this, who have a winter place in Florida and spend only four months down there," said Mr. Faber.
Peter L. Faber, Tax, Tax Controversy, Tax Exemption
Michael Peregrine was quoted in the April 19 issue of BNA’s Health Law Reporter in the article "IRS Interim Report Should Address Community Benefit, Treasury IF Says." The article addressed the issue that the IRS should include in an upcoming report on tax-exempt hospitals an assessment of how those hospitals are complying with the community benefit standard for hospital tax exemption. "The report reflects the perspective of the General Accountability Office, and past statements by the IRS Commissioner, that it is often difficult to differentiate between for-profit and nonprofit providers in terms of community benefit and charity care provided," Mr. Peregrine said.
Michael W. Peregrine, Health, Tax Exemption
Michael Peregrine was quoted in the April 19 issue of BNA’s Health Law Reporter in the article "Judge Rules Two Nonprofit Hospitals May Leave Cincinnati Health Alliance." The article addressed two nonprofit hospitals that may withdraw from the Health Alliance of Greater Cincinnati, since the joint operating agreement binding them to the region's largest health care network allows their governing boards "to exercise ultimate authority for fulfilling their respective charitable missions." "This is a significant decision, which could lead to enhanced instability in nonprofit health systems formed through change of membership, affiliation, JOAs and other means," Mr. Peregrine said.
Michael W. Peregrine, Health, Tax Exemption
Bernadette Broccolo was quoted in BNA’S Health Law Reporter in an article regarding an IRS directive that was issued stating that exempt hospitals might enter into certain arrangements with physicians to help facilitate their adoption of electronic health record technologies without violating federal tax laws. “While CMS’s regulations permitted hospitals to subsidize up to 85 percent of these HER system costs, it had been an open question as to whether IRS would embrace the same percentage given its exempt hospital and private inurement oversight perspective. That questions has now been answered,” Ms. Broccolo said.
Bernadette M. Broccolo, Health, Life Sciences & Medical Products Litigation, Life Sciences - Health, Tax Exemption
Michael Peregrine was quoted in the February 12 issue of Modern Healthcare Online in an article discussing the new guidelines that were distributed by the IRS for governing boards of tax-exempt organizations. "Not-for-profit hospitals should not be lulled into thinking the guidelines are insignificant just because the suggested practices are not breaking any new ground," Mr. Peregrine said.
Michael W. Peregrine, Health, Tax Exemption
Michael Peregrine was quoted in the February 6 issue of TaxAnalysts in an article discussing a list that was prepared by the IRS of preliminary guidelines designed to help charity boards improve their oversight of charities. "Charity boards should take a good look at the guidelines. I wouldn't just blow these off as insignificant or as breaking no new ground. The guidelines make a couple of important points," Mr. Peregrine said.
Michael W. Peregrine, Health, Tax, Tax Exemption
Michael Peregrine was quoted in the February issue of Corporate Counsel about the recent decision of the American Red Cross to reform their structure due to various congressional attacks throughout the years. "The politics probably played a big role in the Red Cross's reforms, too. They were reacting to the spotlight," Mr. Peregrine said.
Michael W. Peregrine, Health, Tax Exemption
McDermott client Murphy Oil Corporation was profiled in The Washington Post on January 31 for its contribution to the El Dorado Promise foundation, a scholarship program for El Dorado, Arkansas public school students. The foundation was established with the assistance of Robert Louthian and Robin Greenhouse. Murphy Oil contacted Ms. Greenhouse for assistance, and Mr. Louthian was instrumental in establishing the foundation and is currently in the process of obtaining a tax-exemption for the foundation.
Robin L. Greenhouse, Robert C. Louthian III, Health, Tax Exemption
2006
Michael Peregrine was quoted in the October 20 issue of The Washington Post regarding the judge's ruling that former NYSE chief Dick Grasso breached his duty by failing to disclose his ballooning retirement fund in the years before his resignation. "This is the kind of decision that will make nonprofit CEOs sit up and take notice," commented Mr. Peregrine. "They're going to spill their coffee in their laps when they read this case."
Michael W. Peregrine, Executive Compensation, Health, Tax Exemption
Michael Peregrine was quoted in the August 10 issue of BNA's Health Law Reporter in the article "State Appeals Court Affirms Sanctions in Derivative Action Against Nonprofit Board." Mr. Peregrine was quoted saying that the decision "is very significant in that it is one of the rare instances where we have seen a 'derivative' cause of action used in the nonprofit health care context."
Michael W. Peregrine, Health, Tax Exemption
Michael Peregrine was quoted by Modernhealthcare.com on August 7 regarding oversight of executive pay, bonuses and perks among not-for-profit health systems. Mr. Peregrine was quoted saying that "not-for-profit system officials and consultants argued results revealed solid governance and a heightened sensitivity to calls for greater oversight of tax-exempt charities pay to keep top executives."
Michael W. Peregrine, Health, Tax Exemption
Doug Mancino and Christopher Jedrey were quoted in the July 5 issue of Tax Notes Today in an article discussing reactions to a recent questionnaire the IRS sent to tax-exempt hospitals inquiring about compensation practices and how much community benefits provide. "While the questionnaire asks good questions, answering some of them calls for multifaceted responses that don’t lend themselves to easy yes-or-no answers," said Mr. Mancino. Chris Jedrey also mentioned that he thinks bad debt is often synonymous with charity care. "I understand why the IRS wants to treat them as separate and distinct. However, a lot of hospitals don’t see a ‘clear bright line’ between bad debt and charity care," Mr. Jedrey added.
Christopher M. Jedrey, Health, Tax Exemption
Michael Peregrine was quoted in the June 1 issue of BNA’s Health Law Reporter in an article regarding the IRS community benefit questionnaire, recently sent to hundreds of tax-exempt hospitals. "The questionnaire goes to the heart of a hospital's tax-exempt status and needs to be responded to with care, attentiveness and accuracy," Mr. Peregrine said.
Michael W. Peregrine, Health, Tax Exemption
On May 10, McDermott was mentioned by name in The Wall Street Journal, The New York Times, Bloomberg, Associated Press, The Cleveland Plain Dealer, Business Week Online, WashingtonPost.com and MSNMoney.com as counsel for Cleveland Clinic in a matter the national media have been following. The Firm conducted a comprehensive review of policies, procedures and practices of trustees and phyisicians with respect to disclosure and management of relationships giving rise to conflicts of interest in governance, clinical decisions, scientific research and related publications.
Michael Peregrine was quoted in the May 5 issue of Rocky Mountain News in the article “Salaries Soar for Hospital Execs.” Mr. Peregrine said the allegations of excessive compensation at nonprofits is a very juicy story. "Politicians love to make hay of this,” he said. “But we have to come back and look at what the law allows. There is no inherent obligation to pay less at nonprofits."
Michael W. Peregrine, Health, Tax Exemption
Michael Peregrine was quoted in the May 4 issue of BNA's Health Law Reporter regarding executive compensation processes of nonprofit hospitals. He suggested they "focus on known 'trouble spots' independence of the process, including both committee members and advisers, transparency to the board of the recommendations, committee and board comprehension of retirement benefits and clarification of travel, entertainment, and discretionary expenditures."
Michael W. Peregrine, Executive Compensation, Health, Tax Exemption
Michael Peregrine was quoted in the April 20 issue of BNA's Health Law Reporter regarding the U.S. Sentencing Commission's April 5 vote to remove language in the Sentencing Guidelines that puts pressure on corporations under criminal investigation to waive attorney-client privilege and work product protection as a condition of being deemed cooperative with prosecutors. "The change will affect any regulated organization that has a compliance plan, including those in the health care industry," Mr. Peregrine said.
Michael W. Peregrine, Corporate Responsibility and Governance, Health, Tax Exemption
Michael Peregrine was quoted in the April 17 issue of Modern Healthcare regarding the Government Accountability Office’s second series of "soft-contact-audit" letters after a batch the GAO mailed earlier this year. "The GAO inquiry is distinct from the IRS probe,” Mr. Peregrine said. "Tax-exempt hospitals are facing two separate inquiries with overlapping issues this year."
Michael W. Peregrine, Corporate Responsibility and Governance, Health, Tax Exemption
Michael Peregrine was quoted in the March 27 issue of Modern Healthcare in an article regarding charity care accountability. "The tax-exempt status of non-for-profit hospitals probably won’t be revoked," Mr. Peregrine said, "But the IRS has said it fully intends to audit up to 650 hospitals this year to determine if they are complying with the community-benefit standard, ambiguous as it is."
Michael W. Peregrine, Health, Tax Exemption
Michael Peregrine was quoted in the February 20 issue of Modern Healthcare in the article, "Keeping the Heat On," regarding continued scrutiny of healthcare organizations by the Internal Revenue Service. Mr. Peregrine said the multi-fronted assault on not-for-profit hospitals is partly driven by government officials angry at perceived abuses of tax-exempt status and hungry for tax revenue in an era of state and federal budget cuts. "Congress is pressuring the service to increase regulatory scrutiny of tax-exempts and it has a tremendous influence over the IRS," he said.
Michael W. Peregrine, Health, Tax Exemption
Michael Peregrine was quoted in the January 30 issue of Modern Healthcare in the article, "States Turn Up the Heat." Mr. Peregrine said not-for-profit boards will likely continue to face "disproportionately high regulatory pressure" to refine their governance policies relating to executive travel and benefits such as automobiles and housing. "In my judgment, states are better able to deal with issues of oversight," he said. "State government is closer to the front line."
Michael W. Peregrine, Health, Tax Exemption
2005
Michael Peregrine was quoted in the October 31 issue of Modern Healthcare in the article "IRS Turns Up the Heat: Agency May Seek Data on Compensation, Benefits," advising not-for-profit hospitals to prepare for additional scrutiny from Washington concerning their tax-exempt status. "The underlying issue is: What is an individual hospital doing in terms of programs and activities to provide 'community benefits,' in order to justify their continued tax-exempt status," Mr. Peregrine said.
Michael W. Peregrine, Health, Tax Exemption
Christopher Jedrey was quoted in the October 2005 issue of The Exempt Organization Tax Review in an analysis of the Internal Revenue Service's proposed regulations addressing intermediate sanctions. Mr. Jedrey said the proposed regulations "provide useful guidance on significant, but in practice rarely encountered, circumstances."
Christopher M. Jedrey, Health, Tax Exemption
Michael Peregrine was quoted in the October 2005 issue of The Exempt Organization Tax Review in an analysis of the Internal Revenue Service's proposed regulations addressing intermediate sanctions. Mr. Peregrine said the proposed regulations will "raise the stakes" on the substance of an executive officer's intermediate sanctions review process. "I view these regulations as positive from the perspective of providing useful guidance, incentive for closer internal review of potential excess benefit transactions, and enhancing the importance of having the compliance officer focus on tax, as well as other, principal legal issues," Mr. Peregrine said.
Michael W. Peregrine, Health, Tax Exemption
Michael Peregrine was quoted in the September 19 issue of Modern Healthcare in an article regarding the IRS's proposed regulations that would threaten the tax-exempt status of not-for-profit hospitals and other 501(c)(3) organizations for committing excess-benefit transactions. With the proposed regulations, Mr. Peregrine said, the proposed rules for the first time expressly link maintaining exemption to avoiding excess-benefit transactions. "The proposed regulations put a real premium on internal tax compliance, another task for the compliance officer, because the IRS says things will go better if the organization finds the excess-benefit transaction itself and makes a good faith attempt to fix it before the IRS finds out," he said.
Michael W. Peregrine, Health, Tax Exemption
Michael Peregrine was quoted in the September 14 issue of Tax Notes Today regarding the IRS's released proposed regulations that seek to explain the circumstances under which the IRS will both impose intermediate sanctions and revoke tax-exempt status when excess benefit transactions involving exempt organizations occur. Mr. Peregrine said the proposed regulations will "raise the stakes" on the substance of an exempt organization's intermediate sanctions review process. He pointed out that now, for the first time, an exempt organization can be liable for excess benefit transactions by losing exemption; until now only the transaction participants were penalized. "That will back up general counsel who advise their clients to closely scrutinize potential excess benefit transactions," he predicted.
Michael W. Peregrine, Health, Tax, Tax Exemption
Michael Peregrine was quoted in the September 12 issue of BNA's Health Care Daily Report in regard to the IRS's September 8 proposed intermediate sanctions regulations that define when excess benefit transactions may place a nonprofit organization's exemption at risk. Mr. Peregrine said the proposed rules state "in clear terms that, if individuals associated with an organization engage in excess benefit transactions, the organization's exempt status will be at risk in appropriate circumstances."
Michael W. Peregrine, Health, Tax, Tax Exemption
Michael Peregrine was quoted in the August 8 issue of Modern Healthcare in the article "Hard to Handle: New Guidance Helps Boards Navigate Sarbanes- Oxley." The Public Company Accounting Oversight Board on July 26 released rules on auditor independence that essentially makes is easier for hospitals and systems to hire their auditing firms to perform tax-related services. "Even if the standards issued by the PCAOB, which was created by Sarbanes-Oxley, don't apply directly to not-for-profit hospitals and systems," said Mr. Peregrine, "the standards should be viewed in the same way Sarbanes-Oxley is: as representing good policy."
Michael W. Peregrine, Health, Tax Exemption
Michael Peregrine was quoted in the August 1 issue of Modern Healthcare in the article "Providing Incentives: Execs See Modest Pay Gains as Focus Turns to Quality." As governing boards face scrutiny for how much executives get paid, healthcare executives can expect dwindling guarantees on their compensation. "Good governance put the focus on how the board arrives at compensation," Mr. Peregrine said.
Michael W. Peregrine, Health, Tax Exemption
Bernadette Broccolo was quoted in the June 27 issue of Modern Healthcare in the article "A Higher Standard" regarding the latest report from the Panel on the Nonprofit Sector that included 120 proposals for improving accountability and transparency for all not-for-profits. "I'm not a betting person, but my instinct tells me that we're going to get reform," Ms. Broccolo said. "And that reform will draw on the panel's proposals for ideas. The IRS has already outlined steps not-for-profits can take to show that their governing boards diligently sought out and evaluated appropriate salary data. If a full board or an authorized committee, none of which have a conflict of interest, approved compensation in advance; used comparable compensation data to arrive at an offer; and documented the rationale for a decision as it's being made, then the responsible board members have established a rebuttable presumption."
Bernadette M. Broccolo, Health, Tax Exemption
Michael Peregrine was quoted in Modern Healthcare on June 20, in the article "Economists Onboard." Regarding the possibility of the Senate Finance Committee passing new guidelines for not-for-profit businesses, Peregrine said "A lot of boards are going to have even more of an incentive to appoint people who bring a certain level of expertise. But the boards of larger, more sophisticated healthcare organizations are already looking to broaden their perspective. These billion-dollar-a-year organizations are looking to raise the bar, and they're well-served by having in their midst someone with broad experience." Even though the toughest new federal accounting rules don't yet apply to not-for-profit hospitals, the message remains clear: "The spin-off from Sarbanes-Oxley is to seek people with specific expertise, especially in the areas of healthcare financing," Peregrine said.
Michael W. Peregrine, Health, Tax, Tax Exemption
Michael Peregrine was quoted in the June 3 issue of Health Law Reporter in the lead article "Ways and Means Hearing, Grassley Letter Keep Congress' Foot on Nonprofit Hospitals." Mr. Peregrine said the May 26 hearings suggest "an increased likelihood" that Congress will propose nonprofit oversight legislation that could refine the criteria for tax-exempt hospitals and dictate nonprofit governance standards. "I think is fairly clear from the confluence of the Grassley letter and the focus of the hearings that Congressional leaders believe that the nonprofit, tax-exempt hospital industry deserves special legislative attention with respect to the criteria by which 501(c)(3) status is preserved under the Internal Revenue Code," Mr. Peregrine said.
Michael W. Peregrine, Corporate Responsibility and Governance, Health, Tax Exemption
Michael Peregrine was quoted in the April 14 issue of Health Law Reporter in an article regarding the April 5 Senate Finance Committee hearing to discuss changes addressing compensation issues and business operations of nonprofit health care organizations to improve transparency. Mr. Peregrine said, "In particular, the larger health systems ought to take very close note of Commissioner Everson's comments on the similarity of the nonprofit and for-profit models among health care systems." Leadership can expect to be both "perplexed and chagrined by the several proposals to eliminate the rebuttable presumption of reasonableness under the IRS' intermediate sanctions rules," Mr. Peregrine added.
Michael W. Peregrine, Health, Tax, Tax Exemption
Michael Peregrine was quoted in the February 17 issue of Health Law Reporter in an article regarding the most recent chapter of an ongoing compliance review of Minnesota's nonprofit health care organizations by Attorney General Mike Hatch. Although the report reflects only one Attorney General's interpretation of the law, Mr. Peregrine stated that "it may have broader significance, outside Minnesota, than one might think at first glance… With respect to charity care, nonprofit hospitals are well advised to set aside concerns about the strength of his legal interpretations and his jurisdictional basis, and to focus more on the ‘big picture' projected by his compliance reviews."
Michael W. Peregrine, Health, Tax, Tax Exemption
Michael Peregrine was quoted in the February 4 issue of Corporate Accountability Report in an article regarding the recent release of a report outlining the specifics of the $156.7 million compensation package received by ousted New York Stock Exchange Chairman Richard A. Grasso. The report defined the benefits accumulated by Grasso as "excessive by any reasonable standard." Mr. Peregrine stated that in this current environment, "we should expect continued focus on the independent director/chief executive officer relationship, and on the extent to which the board exercises meaningful oversight of material management decisions."
Michael W. Peregrine, Tax Exemption
Michael Peregrine was quoted in "With Charity for All?" published in the February issue of Corporate Counsel in regard to nonprofit organizations choosing to implement some of the Sarbanes-Oxley provisions. Mr. Peregrine commented that the efforts by nonprofit corporations to effect these reforms within their own governance structure is a "validation that people think Sarbanes-Oxley principles make good sense. But it is also a sign that [GCs] want to keep their organizations out of trouble." In addition, a sidebar story, "Both Sides Now," written by Mr. Peregrine accompanied this article, and addressed why general counsels of nonprofit organizations are becoming champions of "corporate responsibility."
Michael W. Peregrine, Corporate Responsibility and Governance, Health, Tax Exemption
Michael Peregrine was quoted in the January 31 issue of Modern Healthcare in an article detailing the challenges faced by the University of Iowa Hospitals and Clinics following the resignation of the president of Iowa's Board of Regents, John Forsythe. Attorney General Tom Miller believed that Forsythe's position as CEO of Wellmark Blue Cross and Blue Shield prevented him from exercising supervisory authority as Regent president without running afoul of the law prohibiting conflicts of interest. Mr. Peregrine stated, "Iowa's difficulties are likely to surface elsewhere, as more hospital systems work to improve oversight by bringing experienced business executives to their boards."
Michael W. Peregrine, Health, Tax Exemption
Michael Peregrine was quoted in the January 31 issue of the National Law Journal in regard to nonprofit organizations choosing to implement some of the Sarbanes-Oxley provisions. Mr. Peregrine commented that the efforts by nonprofit corporations to effect these reforms within their own governance structure is a "validation that people think Sarbanes-Oxley principles make good sense. But it is also a sign that [GCs] want to keep their organizations out of trouble."
Michael W. Peregrine, Corporate Responsibility and Governance, Health, Tax, Tax Exemption
Michael Peregrine was quoted in the January 6 issue of Health Law Reporter in an article regarding a review by the IRS of executive compensation arrangements utilized by tax-exempt organizations to reward their top officers. Although no cases have surfaced yet, lawyers representing nonprofit health care organizations will be watching this area closely in 2005. Mr. Peregrine stated, "I think these high-profile cases will jolt some health care organizations which heretofore thought that their own executive compensation processes were meeting IRS standards."
Michael W. Peregrine, Health, Tax, Tax Exemption
2004
Ralph DeJong was quoted in the November 22 issue of Health Care Daily in an article regarding the proposed rules issued by the IRS and how they are extremely favorable for nonprofit health care organizations. Ralph agrees. "Employees will have more flexibility to move between vendors and contracts than they previously had," Mr. DeJong said. "On the other hand, they may have to look to their employer than previously to determine to which vendors they will have access," he added.
Ralph E. DeJong, Health, Tax Exemption
Michael Peregrine was quoted in the August 11 issue of The New York Times in response to the announcement by the IRS that they have begun and also broadened their inquiry of nonprofit organizations' executive compensation. "So many organizations were assuming this wouldn't apply to them, and it's clear that the scrutiny is going to be much broader," commented Michael.
Michael W. Peregrine, Executive Compensation, Health, Tax Exemption
Bernadette Broccolo was quoted in BNA's Daily Tax Report on August 11 regarding the new IRS enforcement effort to stop abuses by groups that award excessive compensation and benefits to officers and insiders. Ms. Broccolo said she will advise her clients that they should be doing internal reviews of compensation to look at things like rebuttable presumption procedures and how they are reporting compensation on Form 990. She noted that organizations should make sure there is ample comparability data and that the body that decides compensation is independent.
Bernadette M. Broccolo, Health, Tax, Tax Exemption
Chris Jedrey was quoted in August 2004 edition of HealthLeaders in an article regarding the merger of four multispeciality groups in Massachusetts. Harvard Vanguard, Dedham Medical Associates, Southboro Medical Group and South Shore Medical Center merged in January under a proposed tax-exempt nonprofit patent corporation, HealthOne Care System, Inc. "This is not a '90s-style integration system brought together to beat on the payors," Mr. Jedrey commented. Instead, HealthOne is a collaborative effort that even the managed care companies embraced, said Chris. More feet under the negotiating table has upped reimbursement in Boston's "very competitive" market, he added.
Christopher M. Jedrey, Health, Tax Exemption
Michael Peregrine was quoted in the July 15 issue of The New York Times in regard to increased scrutiny for nonprofit boards amid heightened concerns on oversight and regulation of the sector. "There are many organizations having to deal with the broad issue of the qualifications of directors and the continuing ability to serve as directors who are implicated directly or indirectly in these corporate situations. It is too simplistic an approach to say the appearance of impropriety alone is enough to disqualify someone (from sitting on a nonprofit board)," commented Mr. Peregrine.
Michael W. Peregrine, Tax Exemption
Michael Peregrine was quoted in the July 8 issue of the Chicago Sun-Times in regard to Eliot Spitzer's lawsuit against Richard Grasso, former chairman of the NYSE. Spitzer's lawsuit did not delve into the NYSE's contributions, which suggests there were no improprieties commented Mr. Peregrine. "One would think the Attorney General would have run an allegation of improper uses of donations if there was indeed credible evidence."
Michael W. Peregrine, Corporate Responsibility and Governance, Tax Exemption
Michael Peregrine was quoted in Bloomberg news story on July 7 in regard to Eliot Spitzer's lawsuit against Richard Grasso, former chairman of the NYSE, citing New York's not-for-profit corporation law that officers' pay must be "reasonable." Spitzer's lawsuit did not delve into the NYSE's contributions. That suggests there were no improprieties commented Mr. Peregrine. "One would think the Attorney General would have run an allegation of improper uses of donations if there was indeed credible evidence."
Michael W. Peregrine, Corporate Responsibility and Governance, Tax Exemption
In an article in the July 2 issue of Corporate Accountability Report, Michael Peregrine commented on the Senate Finance Committee’s proposal on possible legislation to reform the tax-exempt status of nonprofit organizations, particularly hospitals. Mr. Peregrine commented that "it is hard to see how the level of 'scandals and abuses' in the nonprofit area has been so great, and the level of state charity office enforcement so insufficient, as to warrant this level of regulation and intervention."
Michael W. Peregrine, Health, Tax Exemption
Michael Peregrine was quoted in the cover story, "Surviving the Heat," in the June 28 issue of Modern Healthcare. The article discusses how at recent Senate and House hearings lawmakers asked challenging questions about tax-exemption status. Last week a proposal was circulated that would have the government review a tax-exempt organization's status every five years to ensure that it "continues to be organized and operated exclusively for an exempt purpose." Mr. Peregrine commented that the draft proposal would bring the federal government into hospital boardrooms by making breaches of fiduciary duty a federal violation. He argued that current state laws are enough to meet the level of abuse.
Michael W. Peregrine, Health, Tax Exemption
Michael Peregrine was quoted in the June 21 issue of Business Week in response to Eliot Spitzer's lawsuit against Richard Grasso on the IRS's plans to examine executive compensation among nonprofits. Mr. Peregrine commented that prior to the Sarbanes-Oxley Act, nonprofit organizations (which do not have investors) were not subject to as much oversight as to their business and corporate affairs as were business corporations.
Michael W. Peregrine, Corporate Responsibility and Governance, Health, Tax Exemption
Michael Peregrine was quoted in the June 14 issue of Business Week on new obligations for corporate directors to oversee corporate compliance plans, arising out of the new proposed amendments to the federal sentencing guidelines.
Michael W. Peregrine, Corporate Responsibility and Governance, Health, Tax Exemption
Michael Peregrine commented on New York Attorney General Eliot Spitzer's lawsuit seeking more than $100 million from the former NYSE Chairman Richard Grasso in the June 1 issue of the Chicago Tribune. More cases like this are likely and it is alerting nonprofits to the areas regulators will be examining in compensation Mr. Peregrine commented. "I think it's a very powerful argument when an attorney general goes after a charity and says, 'You're paying your CEO too much.' It's really a helpful development for nonprofits, giving them added incentive to examine their own procedures," Mr. Peregrine said.
Michael W. Peregrine, Corporate Responsibility and Governance, Health, Tax Exemption
Michael Peregrine was quoted in the June 2004 issue of the ABA Journal, in an article regarding the fact that nonprofit organizations are now being more closely scrutinized by the government. According to Michael, there is a critical difference between nonprofits and for-profit companies. "The responsibilities of a nonprofit board are essentially the same as those of a for-profit company," Mr. Peregring said. "They must have a duty of loyalty, a duty of care, fiscal responsibility. But there's one additional duty for the nonprofit board -- the duty of obedience to the stated mission."
Michael W. Peregrine, Corporate Responsibility and Governance, Health, Tax Exemption
In the May 27 issue of Health Care Daily, Michael Peregrine was quoted in an article regarding the negative repercussions for nonprofit health care organizations from the lawsuit against Richard A. Grasso, the former chairman of the New York Stock Exchange, dealing with his exorbitant retirement package. This lawsuit, according to Mr. Peregrine, "is only going to provide those who regulate and who monitor nonprofit organizations with another reason to be 'poking around' their expenditures and board processes."
Michael W. Peregrine, Health, Tax Exemption
Michael Peregrine was quoted in a May 26 Reuters story, which also appeared on Forbes.com, regarding Eliot Spitzer's decision to sue former NYSE Chairman and Chief Executive Richard Grasso. "There are important nuances in Spitzer's argument against Grasso," commented Mr. Peregrine. "Part of Spitzer's argument is that the board was misled. It's very difficult to criticize a board for failure to exercise appropriate judgment if part of your argument is that the process was flawed and the board was not allowed to see certain information."
Michael W. Peregrine, Corporate Responsibility and Governance, Health, Tax Exemption
Michael Peregrine was quoted in the May 25 issue of USA Today in an article reporting on New York Attorney General Eliot Spitzer's groundbreaking lawsuit against the former head of the New York Stock Exchange, Richard Grasso. Spitzer is suing Grasso to return "in excess of $100 million" arguing Grasso's pay was unreasonable under New York state laws governing not-for-profit institutions such as the NYSE. "Spitzer's suit shines a bright light on the process by which nonprofit organizations establish compensation," commented Mr. Peregrine. "You have billion-dollar nonprofits across the country, and this is an enormously hot issue right now."
Michael W. Peregrine, Corporate Responsibility and Governance, Health, Tax Exemption
Bernadette Broccolo illustrated how the IRS Revenue ruling 2004-51 adds to existing guidelines for joint ventures between exempt and for-profit entities in the May 7 edition of BNA Daily Tax Reporter. She noted that "it complements Rev. Rul. 98-15 by setting forth facts and circumstances the IRS will consider in deciding how to characterize an ancillary joint venture with shared control."
Bernadette M. Broccolo, Health, Tax, Tax Exemption
Michael Peregrine was quoted in The New York Times on March 21 regarding enhanced accountability and greater responsibility for nonprofit boards. Michael commented on Eliot Spitzer's (New York's attorney general) proposed package of bills to increase the accountability of nonprofit groups. "When his (Spitzer) efforts didn't go anywhere, I think some charities decided it was just a fad," commented Mr. Peregrine. "But the confluence of high-profile, notorious developments among charities is giving these attorneys general and congressmen the ammunition they need to push these measures through."
