Demystifying Reasonable Compensation and Management Fees for MSOs: Understanding the Differences
What is an MSO? A Management Services Organization (MSO) is an entity designed to provide administrative and management services to healthcare providers and other businesses. By outsourcing non-core administrative functions such as human resources, IT, and accounting to an MSO, operating companies can focus on their primary business activities. An MSO is often structured as […]
Leveraging Reasonable Compensation Studies and MSOs: Be Ready for an IRS Audit and Protect Your Wealth
What is Reasonable Compensation? A reasonable compensation study is an analysis conducted to determine an appropriate salary for a shareholder-employee, ensuring it aligns with IRS guidelines and industry standards. The IRS defines reasonable compensation as “the value that would ordinarily be paid for like services by like enterprises under like circumstances.” This analysis is crucial […]
Why MSOs Are Not Classified as Personal Holding Companies
Introduction to MSOs A Management Services Organization (MSO) is a business structure designed to provide administrative and management services to operating companies. These services can include staffing, human resources, IT, and accounting, among others. An MSO can enhance tax efficiency, increase cash flow, protect family wealth, and accelerate business growth by centralizing administrative functions, optimizing […]
Debunking the Myth: MSOs and Arm’s Length Transactions
Introduction to MSOs A Management Services Organization (MSO) is a business structure designed to provide administrative and management services to operating companies. These services can include staffing, human resources, IT, and accounting, among others. An MSO can enhance tax efficiency, increase cash flow, protect family wealth, and accelerate business growth by centralizing administrative functions, optimizing […]