Summit Physician Services

Schedule D, Page 3, Part X

“Summit physician services is a tax-exempt public charitable organization as defined under section 501(c)(3) of the internal revenue code. No provision for federal income tax has been recorded for the year ending june 30, 2014. With few exceptions, the organization is no longer subject to federal income tax examinations by tax authorities for years before 2011. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above would be reflected as a liability for unrecognized tax benefits in the balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits would be classified as expenses against other operating revenue in the statements of operations. At june 30, 2014 and 2013, there was no liability for unrecognized tax benefits.”