A bustling, non-profit hospital bills an elderly patient more than $2,000 for a magnetic resonance imaging (MRI) scan ordered by his physician. Despite the enormous profits the hospital will accrue during the year, its total revenue stream will be tax-exempt because it qualifies as a § 501(c)(3) organization under the Internal Revenue Code (IRC). A hospital’s ability to navigate the tax system without serious ramifications presents potential issues, particularly as the healthcare market is undergoing gradual changes in the wake of the Affordable Care Act (ACA). An organization’s ability to obtain preferential § 501(c)(3) tax status by showing that it is “organized and operated exclusively” for one of the exempt purposes under the statute is a root cause of many problems. This involves fulfilling a two-prong test under IRC § 501(c)(3), which includes both an organizational and an operational component. Both tests have to be satisfied or the organization in question loses its tax-exempt status under § 501(c)(3).