Ascension Health, St. Louis, has paid $2.7 million to settle Internal Revenue Service questions about a 1999 bond issue used to create the healthcare system. In all, the IRS examined at least seven hospital systems' merger financing to ensure compliance with tax-exempt financing rules. Issuing guidance earlier this year, the agency offered the systems the option of paying a penalty or restructuring their debt. In a written statement, Ascension, which operates 67 acute-care hospitals, said it believes its November 1999 issue of about $2.4 billion in debt fully complied with IRS rules; however, the system said it settled the matter to avoid ongoing costs associated with the audit. In addition, Ascension said, the settlement will protect bondholders from uncertainty about the tax status of interest on bonds. Ascension was created by the merger of Daughters of Charity National Health System and Sisters of St. Joseph Health System. -- Patrick Reilly
Ascension settles IRS audit of merger financing
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