Historically, the IRS has presumed that members of hospitals' medical staffs are insiders when considering the answers to inurement questions.
In the past, if physicians controlled more than 20% of the board, upon examination of the transaction the IRS automatically presumed the existence of a private inurement.
The new IRS policy sharply focuses on two factors: first, a factual review of whether the IDS is properly governed by a truly independent board that may contain up to 49% physicians and second, whether the board applies reasonable safeguards against inurement by adopting an appropriately strict conflict-of-interest policy.
Historically, the IRS mechanically presumed members of the hospital's medical staff are "insiders" for the purpose of considering inurement questions.
A revenue-sharing transaction: transactions in which a disqualified person receives payment based on an exempt organization's revenue, and the transaction would violate the present law of private law inurement prohibition.