RECOMMENDED!!Evaluate the IRS’s Proposal in a Memo to the Research File

  

Evaluate the IRS’s Proposal in a Memo to the Research FileHeal, Inc., a tax-exempt hospital, was sold to its shareholders for $6.6 million. The IRS determined that the fair market value of the hospital was $7.8 million. An IRS agent is proposing that the tax-exempt status of the hospital be revoked because the sale of the hospital to the shareholders for less than the fair market value resulted in “private inurement” to them. Evaluate the IRS’s proposal in a memo to the research file.

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