Union General Ambulance Service Inc.

Schedule D, Page 3, Part X

“Union, chatuge and the ambulance service are tax exempt under section 501 (a) as organizations described in section 501(c)(3) of the internal revenue code of 1986, as amended. The dialysis clinic is organized under georgia law and the internal revenue code (irc) as a limited liability company (llc). The dialysis clinic is taxed as a partnership under federal and state law and is therefore not subject to corporate income taxation. The members report their allocable share of income from the llc on their income tax returns. Union's share of income from the dialysis clinic's operations is considered related business income and therefore is not subject to tax. The corporation applies accounting policies that prescribe when to recognize and how to measure the financial statement effects of income tax positions taken or expected to be taken on its income tax returns. These rules require management to evaluate the likelihood that, upon examination by the relevant taxing jurisdictions, those income tax positions would be sustained. Based on that evaluation, the corporation only recognizes the maximum benefit of each income tax position that is more than 50% likely of being sustained. To the extent that all or a portion of the benefits of an income tax position are not recognized, a liability would be recognized for the unrecognized benefits, along with any interest or penalties that would result from the disallowance of the position. Should such penalties and interest be incurred, they would be recognized as operating expenses. Based on the results of management's evaluation, no liability is recognized in the accompanying balance sheet for unrecognized income tax positions. Further, no interest or penalties have been accrued or charged to expense as of april 30, 2017 and 2016 or for the years then ended. The corporation's tax returns are subject to possible examination by the taxing authorities. For federal income tax purposes, the tax returns essentially remain open for possible examination for a period of three years after the respective filing deadlines of those returns.”