Dr. A owns 100% of professional corporation B, which has no employees other than Dr. A. He also owns (directly and through any attribution) 7.4% of professional liability company X. Dr. A is an independent contractor of X, providing professional services to the patients of X, from which he derives over 30% of his total professional income. Such income is reported by Dr. A on his own personal tax return.

B provides inpatient professional services to patients of hospital H. Such professional services are performed solely by Dr. A, as an employee of B. Neither Dr. A nor B have any ownership interest in H. X has no involvement with B's practice at H. B maintains a profit sharing plan.

Dr. A is clearly a member of an affiliated service group including X as the FSO and Dr. A as both an A Organization and a B Organization. However, is B also a member of such affiliated service group? B provides no services to X. Proposed Regulation 414(m)-2 requires attribution of ownership for the ownership parts of the A organization and B organization test, but not the parts of the test requiring the regular provision of services to or in association with the FSO or having as a significant part of its business the provision of services to the FSO.