January 1984: Modern Health Care Services requests ruling from the Internal Revenue Service on proposed use of proceeds from sale of North Miami (Fla.) General Hospital to Health Resources Corporation of America.
February 1984: IRS approves Modern Health's plans to develop alternative delivery system.
October 1991: IRS launches wide-scale audit â– program of tax-exempt organizations, including several dozen hospitals or hospital â– systems.
September 1992: IRS official warns in public speech that up to five hospital systems may have their exemptions revoked because of facts uncovered by audits.
October 1992: Modern Health sells remaining system assets to physician-led investment group for $4.5 million promisory note.
June 1993: Modern Health changes name to LAC Facilities.
April 1994: Following audit of Modern Health â– prompted by company's 1988 federal tax filing, IRS issues technical advice memorandum that revokes LAC's status as tax-exempt public charity, retroactive to Oct. 1, 1985.
June 1994: IRS revokes LAC's exemption, notifies organization of decision.
August 1994: IRS official warns in public speech that one healthcare provider will lose its tax exemption because of audits.
September 1994: LAC Facilities sues IRS in U.S. Court of Federal Claims in Washington.
Sources: IRS, court records