BIR Ruling

January 15, 1974 Dr. Gabriel G. Carreon Director Philippine General Hospital Manila S i r : This refers to your letter dated November 14, 1973 requesting information whether the physicians in the Philippine General Hospital may declare only such portion of the entire amount of the check payable in their name, actually received by them, as professional fees from the Medicare Commission, considering the procedure and policy being followed by the hospital in this regard, viz: cdta "The Philippine General Hospital from time to time admits patients entitled to Medicare benefits. As a matter of procedure, our Accounting Division does not include in the billing to the patients the professional fee charged by the doctors. So the Medicare Commission remits two checks: one to the Philippine General Hospital for bills other than professional fees; and the other direct to the physician under his name. As a matter of policy of the Hospital, the said physician is required to turn his check over to the hospital coffers, 60% of which goes to the hospital and the remaining 40% are kept in a pool to be subsequently divided equally among the physicians. It is evident, therefore, that although the checks for professional fees are paid by the Medicare Commission direct to the physicians themselves, not all of the amounts remitted go to them." In reply, thereto, I have the honor to inform you that from the foregoing considerations, the physicians concerned may declare only such portion of the amount of the check as actually received by them in their income tax returns. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5