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ASG?


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Any thoughts on whether the following constitutes an ASG?

Dentist sells the assets of his practice to Buyer, AcquireCo.  

  • Dentist's Co, OldCo, will be hired by AcquireCo to provide consulting services.  
  • OldCo will pay Dentist a salary.
  • Dentist is not an employee of AcquireCo
  • Dentist performs no management services for AcquireCo
  • Dentist has no ownership interest in AcquireCo
  • All of OldCo's revenue comes from their consulting agreement with AcquireCo

I don't see how this is an ASG, but tell me if I'm wrong.  The only other issue I see is that Dentist could be considered a common law employee of AcquireCo.

 

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Anyone have a good definition of management services?  I figure if a dentist tells you this procedure is running late, the assistant is going to listen, or if the dentist tells the hygienist to take X-Rays, they're going to do it. Isn't that managing?  What if this particular location the dentist is the only person there to "supervise"?  Couldn't it be a gray area?  And why wouldn't every dentist be set up this way if it's that easy to circumvent the rules?

Another thought, at some point the dentist starts to sound like a common law employee, right? 

 

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OP didn't say the dentist was providing dental services, which it sounds like you're referring to.  Even so, I wouldn't call telling someone about a late procedure to to take an X-Ray to be management, it's part and parcel of providing dental services to patients.  OTOH, if the dentist is running the show at a location that could very well be management services or at best a gray area.  But 414(m)(5) also says management has to be the principal activity, so the rare and occasional lapse wouldn't create an ASG.  

Independent contractor medical, dental and legal professionals are often engaged to provide professional services, and without ownership they wouldn't be an ASG unless you invoke the long gone proposed reg that deemed professional services to be management services. 

IC vs employee - that issue exists in every IC arrangement.  Not my issue as a TPA other than to point out that an improperly classified IC could change the plan results. 

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