Were a physician director's medical-record analysis, research, and expert-witness location services for attorneys taxable consulting services?

Note -- obsolete historical guidance. DRS marks this information "not current" and states that Announcement (AN) 94(4) obsoleted the ruling.

Plain-English summary

A physician director worked for a firm that advised attorneys. The services included reviewing and analyzing patient records for possible malpractice actions, researching medical topics and translating the research into lay terms for litigation, and locating medical expert witnesses.

DRS concluded that these services were not taxable under the cited business-analysis, management, consulting, and public-relations provision because they were not advice about the operation of a client's business.

What this means for you

The historical ruling distinguished the described medical litigation-support work from advice about running the attorney client's business. AN 94(4) later obsoleted the guidance.

Common questions

What records did the physician director review? Patient records for possible malpractice actions against health care practitioners.

What other services were provided? Medical research translated into lay terms and locating expert witnesses for litigation.

Why were the services nontaxable? They did not constitute advice about operating the client's business.

Citations and references

• Conn. Gen. Stat. § 12-407(i)(J), as cited in the ruling.
• 1989 Connecticut Public Act 89-251, as cited in the ruling.
• Announcement (AN) 94(4) -- identified by DRS as obsoleting the ruling.

Source

• Landing page: Connecticut DRS Rulings
• Ruling: Ruling 89-129

Original ruling text

Ruling 89-129, Consulting

This information is not current and is being provided for reference purposes only

This Ruling has been obsoleted by AN 94(4)

You have inquired as to whether your consulting services are subject to the sales and use tax under Public Act No. 89-251 which amended the language of section 12-407(i)(J) to tax "business analysis, management, consulting and public relations services."

The facts presented to us are that you are the physician director of a firm that provides advice to attorneys. In that capacity, you review and analyze patient records for possible malpractice actions against health care practitioners. You research specific medical topics and translate your research into layman's terms for use by attorneys in malpractice, personal injury and product liability cases. You also locate expert witnesses in various medical specialties to provide expert testimony for subsequent litigation.

It is our opinion that your consulting services are not subject to tax under section 12-407(i)(J) of the Connecticut General Statutes, because these services do not constitute advice rendered with respect to the operation of a client's business.

LEGAL DIVISION

October 2, 1989