Houston ACO Tells Fifth Circuit It Should Have Non-Exempt Status

The Memorial Hermann Accountable Care Organization asked a federal appeals court to reverse a tax court judgment that found it didn’t qualify for tax-exempt status under §501(c)(4) for social welfare organizations because some of its activities benefited commercial insurers and health care providers.

MHACO said the tax court incorrectly used a substantial non-exempt purpose standard applicable to the tax category for nonprofit organizations, and which says organizations don’t qualify for tax exemption if more than an insubstantial part of their activities aren’t for an exempt purpose, according to its brief filed Thursday in the US Court of Appeals for the ...