'Old' Proposed Management Organization ASG Regs

[Guest gmag00]

I'm looking for a copy of Prop. Treas. Reg. 1.414(m)-5. These are the proposed regulations relating to management organization affilliated service groups that were repealed in April of 1993. Unfortunately, internet CFR and IRB resources don't go back far enough to accomodate so anyone with the ability to send a .pdf file of same would be a huge help. Anyone out there with time to kill, a scanner and a copy of the regs from no later than 1993?

[rcline46]

Interesting question. The Proposed Regs were withdrawn as if they never existed. Other than as an historical note, why would one want to clutter their mind with quite literally 'nothing'?

[Guest gmag00]

I am dealing with a complex management service ASG which includes companies that received a substantial amount of management services as well as companies that received a very limited amount of management services. Without any real guidance on what constitutes a management service ASG other than the Code section (and without the luxury of enough time to file a request with the IRS for an ASG determination), I wanted to review the proposed and withdrawn regs in order to look for any anaogous arguments that I could possibly make to substantiate whether the more limited companies should be considered to be a part of the ASG or not. Even an argument that directly contradicts the conclusions drawn by the application of such regs to this situation could be valuable because the regs were withdrawn and, presumptively, do not represent the intended application of the rules by the IRS. Ultimately, just trying to be thorough.

[Kirk Maldonado]

As a last resort, you could try to find a copy of the edition of the Federal Register in which the regulations were published. Unfortunately, the version of the Federal Register that is available online does not go back that far. (The proposed regulations were published in 1987 at 52 FR 32502.)

However, you can find ancient versions of the Federal Register at a Federal Despository Library. The list of the various Federal Depository Libraries around the country is available online at:

http://www.access.gpo.gov/cgi-bin/locate.c...O/LPS1756%7D%7D

As a historical note, in a prior life, I was the drafter of the other set of the affiliated service group regulations.

[Everett Moreland]

In October 2004 I found a copy through Westlaw. My guess is they are still available through Westlaw.

[Kirk Maldonado]

I checked and they are not available through RIA Checkpoint.

[RTK]

No preambles, but here is the text. Yes, I do save a lot of stuff. Let me know if there are any problems with file.

414m_5_regs.pdf

[Guest gmag00]

Many thanks and also many apologies for not acknowledging your help until now. Exactly what I needed and no problems with the file.

[Guest MJ1]

I found some IRS training materials that included the same langauge as appeared in ©(1)(vi), that "profesional services of the same type as the professional services performed by the recipient organization for third parties are deemed to be management activities and services, and are deemed to be management functions regardless of whether such professional services are historically performed by employees."

These training materials were supposedly dated after the proposed regs had been withdrawn, indicating that the IRS continues to take this position. However, the current IRS form that is used for purposes of obtaining a ruling regarding Affiliated Service Groups (Form 8388, Worksheet Number 10) does not include this test.

Does anyone know if the IRS interprets this rule as provided in the withdrawn proposed regulations?

[Guest FAQ]

Does anyone know if the IRS interprets this rule as provided in the withdrawn proposed regulations?

Though this is an old thread, I'm looking at similar issues and also saw the IRS training materials. In Darren Watson's "Who's the Employer" book, he states that if professional services are included as a management function, this would threaten ER doctors, radiologists, and other hospital-based physicians with treatment as part of an ASG with their hospital (even though they are not hospital employees), but that this threat was removed with the withdrawal of the proposed regs. Watson indicates that "...the IRS has confirmed orally that practitioners no longer need to be concerned about that overly broad interpretation of 'management function.'"

This, plus the lack of any reference to professional services in the determination letter application provisions for management organizations, indicates (informally) that professional services may not not be considered as a management function when determining the existence of a management organization.

I am curious however whether others are comfortable with excluding professional services or whether a management organization IRS ruling is advisable when the primary connection to a hospital or other entity is professional services.