For-profit health care entities such as physician practices and hospitals may
soon see their Medicare payments subject to a 3% withholding for taxes. On
December 5, 2008, the IRS issued a proposed rule to implement a tax
withholding requirement of section 511 of the Tax Increase Prevention and
Reconciliation Act of 2005 (Section 511). Under Section 511, payments by
government entities (including federal, state and local government) are subject
to a 3% income tax withholding. The American Recovery and Reinvestment
Act of 2009, signed by President Obama on February 17, 2009, delays
implementation of Section 511 for one year, so it is now slated to apply to
payments made after December 31, 2011. Ober|Kaler's Alan J. Arville explains.
Please see full publication below for more information.