Mandelbaum Barrett PC’s healthcare and non-profit tax law teams have secured IRS recognition of non-profit status on behalf of an independent medical professional corporation, as an independent charity and not derivatively by associating with another charity under the “integral part” test. Because a professional corporation is, by operation of the state’s professional corporation act, a for-profit entity, an essential feature of a professional corporation technically disqualifies it from securing IRS recognition as a non-profit entity. Forming the entity as a non-profit corporation was not an option because of the state’s prohibition on the corporate practice of medicine. Although it was not unprecedented for the IRS to confer non-profit status upon a statutory for-profit professional corporation, that is a captive to/constitutes an integral part of another non-profit entity, securing non-profit status for a statutory for-profit professional corporation, that is independent of any other non-profit organization, was largely uncharted territory. 

To persuade the IRS to grant non-profit recognition to our client, healthcare department partners, Mohamed H. Nabulsi, Esq. and Jordan S. Solomon, Esq., together with taxation partner, Martin D. Hauptman, Esq., designed a structure for the putative non-profit, memorialized in a series of documents, that satisfied the IRS’ various tests and overcame the hurdle inherent in the entity’s statutory for-profit status. In light of this successful representation, our client may now deliver care to underserved communities using resources and through programs (e.g., the 340B drug program) that are not otherwise available to for-profit medical practices. 

If you would like to explore creative care-delivery models, please contact Mohamed Nabulsi, Healthcare Chair, at

These stories are successful case results from our attorneys. Please note that results may vary depending on your particular facts and legal circumstances.