On March 31, alongside related proposed regulations and guidelines from several other federal regulatory agencies, the IRS issued Notice 2011-20 to solicit public commentary on the application of current law to tax-exempt organizations participating in the Medicare Shared Savings Program (MSSP) through accountable care organizations (ACOs). Rather than proposing new regulations, the IRS is soliciting comments from the public to assess the impact of ACO participation on tax-exempt status, private benefit and unrelated business income. In addition, the IRS is soliciting comments on whether additional guidance is needed for other types of shared savings arrangements with commercial payors (aside from the MSSP).
A few key observations can be made about the IRS' initial comments on ACOs: