Rev. Rul. 57-546

The Internal Revenue Service has amounced that it is modifying its position with respect to classification, for Federal income tax purposes, of organized groups of doctors practicing medicine.

In Revenue Ruling 56-23, C.B. 1956-1, 598, it was held that a group of doctors who adopt the form of an association in order to obtain the benefits of corporate status for purposes of section 401(a) of the Internal Revenue Code of 1954 is in substance a partnership for all purposes of the Internal Revenue Code.

It is now the position of the Service that the fact that an association establishes a pension plan under section 401(a) of the Internal Revenue Code of 1954, corresponding to section 165(a) of the 1939 Code, is not determinative of whether such organization will be classified as a partnership or an association taxable as a corporation. The usual tests will be applied in determining whether a particular organization of doctors or other professional groups has more of the characteristics of a corporation than of a partnership.

Basic criteria to be used in testing as to such organizations the existence of an association taxable as a corporation will be stated in a Revenue Ruling to be published at a later date.