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Physician Contract Glossary · Regulatory & Compliance

IRS Requirements

IRS requirements are the tax rules that shape physician compensation, especially for non-profit hospitals that must protect their tax-exempt status.

Tax rules influence physician contracts in several ways: non-profit hospitals must keep compensation within fair market value to protect their tax-exempt status, deferred compensation must follow Section 409A timing rules, and how you are classified as employee or contractor drives your tax treatment. These rules often explain limits in a contract that otherwise seem arbitrary.

WHAT TO WATCH FOR

For deferred compensation, confirm the arrangement complies with Section 409A, because violations create immediate tax and penalties for you, not the employer. An accountant reviewing the offer is worth the fee.

Related terms

Stop being recruited. Start choosing.

You are about to sign something the senior people in your program signed without reading.

They had no guide either. You do. Start with the option that costs you nothing: see every practice that is actually out there before anyone hands you a contract.

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