Hi There, 

QUESTION

We are a Not For Profit Corporation, which pays for the cost of medical care for patients in need, but we do not seek a 501c3 exception, so we are operating as a 'Corporation' for tax purposes.

Therefore, if we pay for a patient's medical bills, does that mean we are 'retaining Medical Doctors' as our 'primary business'? Once we submit 1099s, and all of our income is sent directly to MDs as 'contractor expenses', would appear that we are primarily operating our 'business' through paying MDs as 'contractors'?

Does the IRS get into all of those details, or are they simply asking us to report the funds so they can collect the tax from the MDs?

We need to structure our entity so that we are not a 'Corporation' that provides 'Medical Services', because we are not Doctors, so we are not permitted to 'employ' doctors (That is called the 'Corporate Practice of Medicine', and this is not permitted in most states). Therefore, I want to make certain that sending 1099s to MDs does not make us appear that we are operating a medical practice comprised of 'contractors'.

At the most, we only want to appear to be a 'Management Services Organization' (Gets us away from the 'Corporate Practice of Medicine' problem), which processes payments and covers the cost of care for patients in need. The Doctor sends us the bill, and we pay - That's our business model.

My question is complex, but it's in there. 

Does this all make sense?

Thank you!!