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THIRD DIVISION

JUSTICE BURKE delivered the opinion of the court:

Plaintiff Midwest Physician Group, Ltd., formerly known as Chicago Osteopathic Academic Medical Practice Plan, Ltd., appeals from an order of the circuit court on administrative review affirming defendant Illinois Department of Revenue's decision that Midwest Physician Group was not entitled to an exemption from real estate taxes for 1992, 1993, and 1994 with respect to its three-story office building and adjacent parking lot located in Olympia Fields, Illinois, under either the "Charitable purposes" exemption (35 ILCS 200/15--65 (West 1994)) or the "Schools" exemption (35 ILCS 200/15--35 (West 1994)) provisions of the Illinois Property Tax Code (Tax Code) (35 ILCS 200/1-1 et seq. (West 1994)). On appeal, Midwest Physician Group argues that: (1) it met the six guideline factors recognized in Methodist Old People's Home v. Korzen, 39 Ill. 2d 149, 233 N.E.2d 537 (1968), which are determinative of whether the use of property is for charitable purposes, and its case is indistinguishable from Lutheran General Health Care System v. Illinois Department of Revenue, 231 Ill. App. 3d 652, 595 N.E.2d 1214 (1992), thus entitling it to a charitable exemption; and (2) it fulfilled the requirements for a school exemption because the subject property is used for the administration of Midwest Physician Group, whose members comprise the "core clinical faculty" at Midwestern University, and the administrative functions performed on the property were "vital to the efficient administration of the clinical faculty" at Midwestern University. For the reasons set forth below, we affirm.

The Chicago Osteopathic Academic Medical Practice Plan, Ltd. (Chicago Osteopathic) was formed in 1975 and operated as a division of Midwestern University from 1975 until 1981. Chicago Osteopathic remained as a division of Midwestern University until it was separately incorporated in 1982 under the Illinois Business Corporation Act as a for-profit medical practice group and recognized as a section 501(c)(3) federal tax exempt organization by the Internal Revenue Service. Chicago Osteopathic relocated to a three-story, 15,000 square foot office building and parking lot in Olympia Fields in 1981 and occupied the building under a lease agreement from 1981 until 1984. Chicago Osteopathic purchased the property on December 15, 1984, and the building was used for its administrative purposes. Pursuant to an amendment to its articles of incorporation in 1993, Chicago Osteopathic changed its name to Midwest Physician Group, Ltd. (MPG).

In an action prior to the case at bar, MPG, then known as Chicago Osteopathic, sought a property tax exemption from the Illinois Department of Revenue (Department) for the 1985 tax year. MPG argued in that case that it was entitled to a charitable purposes exemption. The Department denied the exemption, finding:

"*** [T]he benefits derived [from the property] were primarily for the benefit of the physician members of [Chicago Osteopathic]. [Chicago Osteopathic], I find, did have capital, capital stock, and shareholders. However, [Chicago Osteopathic] did not profit from the enterprise. [Chicago Osteopathic] funds, I find, were derived primarily from fees for services, and were used for the purposes expressed in the charter. [Chicago Osteopathic] failed to demonstrate, I find, that charity was dispensed to all who needed and applied for it, and that no obstacles were placed in the way of those seeking the benefits. Finally, I find, that the primary use of this property was not for charitable purposes, but for the benefit of [Chicago Osteopathic] stockholder members during 1985."

In subsequently affirming the Department's decision, the trial court stated:

"[Chicago Osteopathic] is not a charitable organization. It consists of a group of physicians who are paid a salary for their services. [Chicago Osteopathic] was organized to attract patients and any incidental benefits to the College or community are far outweighed by the benefits to [Chicago Osteopathic]. All patients are billed and only after it is determined that the debt is uncollectible are these debts written off as charity. The parcel in question is an office building. No medical care is dispensed from the premises and it can not be said that charity is dispensed in any form from the premises.

The fact that an organization donates time or money which may indirectly benefit the public by making available competent medical care is insufficient to establish that a group is entitled to a charitable exemption. Although the College, the centers and the clinics are charitable institutions, [Chicago Osteopathic] is not. Furthermore, it does not stand in the place and does not qualify for the exemption."

MPG again sought a tax exemption for the property for the tax years 1992, 1993, and 1994, which are at issue in this appeal. MPG based its request for exemption for the 1992 and 1993 assessment years on the "Charitable institutions" exemption pursuant to section 19.7 of the Tax Code (35 ILCS 205/19.7 (West 1992)). For the 1994 assessment year, MPG based its request on the "Charitable purposes" exemption pursuant to section 15--65 of the Tax Code (35 ILCS 200/15--65 (West 1994)). MPG alternatively requested an exemption based on the "School property" exemption for the 1992 and 1993 assessment years pursuant to section 19.1 of the Tax Code (35 ILCS 205/19.1 (West 1992)). For the 1994 assessment year, MPG based its request under the "Schools" exemption pursuant to section 15--35 of the Tax Code (35 ILCS 200/15--35 (West 1994)). Notwithstanding that the statutory provisions providing for a school and charitable exemption differed slightly for these assessment years, the parties agreed that the result should be the same under either the earlier or later provisions, and that there was no need to engage in a separate analysis under the different versions of the exemption statutes. The Department denied the exemption for 1992, 1993 and 1994.

Thereafter, MPG requested a formal hearing before the Department, which was held on January 22, 1996. Intervenor Board of Education of Rich Township High School District No. 227 (Board of Education) appeared at the hearing to oppose MPG's applications for the tax exemptions. Louis Porn, the chief executive officer of MPG, testified that MPG's physicians are the clinical faculty for Midwestern University, "which is the Chicago College of Osteopathic Medicine," and Midwestern University owns the Chicago Osteopathic Health System (COHS). Porn further stated that Midwestern University is an accredited medical school in Illinois for osteopathic physicians and consists of two hospitals, the Olympia Field Osteopathic Medical Center and the Chicago Osteopathic Medical Center (medical centers) in Hyde Park, and 19 outreach clinics located in Chicago, collectively referred to as COHS.

Porn also testified that MPG employed approximately 150 to 200 physicians and that most of the members were clinical faculty of Midwestern University. According to Porn, MPG physicians constituted more than 90% of the clinical faculty of Midwestern University. Porn further stated that not all of the physicians who practice at the medical centers are members of MPG. Porn also stated that members of MPG were on the medical staff of COHS facilities.

Porn further stated that in order for a physician to become a shareholder of MPG, he or she was required to purchase one share of stock for $10 par value upon joining MPG, was required to sell the stock for the same price upon leaving MPG, and no dividends were paid on the stock. The salaries of MPG's physicians were set by the dean of Midwestern University and the department chairmen, who were appointed by the dean and were subject to oversight by a board of directors, COHS and senior medical staff, and were to be comparable to similarly-situated doctors at other hospitals in the Chicago area. Porn also stated that the relationship between Midwestern University, MPG, and the COHS facilities was set out in the "Physician Services Agreement," entered into on March 18, 1983, and the "Affiliation Agreement," effective July 1, 1993. These two agreements characterized MPG as an independent contractor and stated that MPG's physicians' salaries were to be reasonable in amount and competitive in the market place. The MPG members were also compensated by wages and benefits that included a pension plan, disability coverage, malpractice insurance, and reimbursement for business expenses.

Porn further stated that MPG provided approximately $800,000 to $900,000 in charity or free care to patients each year in question, including the "Hill-Burton" indigent patients. Porn also explained that COHS received federal grants for the construction of its facilities under the Hill-Burton program and were obligated to provide free care to indigent patients. For each tax year in question here, approximately $34 million was discounted for Medicare and Medicaid contractual allowances.

Porn further testified that approximately 80 to 90 MPG employees worked in MPG's building to provide for "the total administrative support for the physicians' total work." The employees in the building performed tasks that included the scheduling for academics, negotiations with the university, billing, administration of the managed care contracts for service, human resources function, and physician benefits. The general finance department was also located in the building. Porn further stated that no patient treatment nor any instructional program occurred on the premises.

Porn also stated that some members of MPG maintained a practice outside of MPG. The physicians did not use the MPG facilities to bill the patients, but some did use the COHS facilities to engage in their private practice. Porn further stated that the revenue generated by MPG was a result of billing and collecting from physician services to patients, and from Midwestern University for teaching services. The percentage of patients treated by MPG's physicians that used Medicare or Medicaid to pay their bills ranged from 45% to 50%. Between $4 to $5 million was written off by MPG as uncollectible each tax year. Porn also explained that MPG would attempt to collect on an account through letters and collection agencies prior to writing off the debt, and that MPG would not resort to the courts for collection. Pursuant to the "Affiliation Agreement," MPG was required to contribute a percentage of its revenue to Midwestern University, which totaled $3.5 to $3.9 million to the university and $3 million to the medical centers' clinics for the years at issue.

Dr. James Charles Murray, a shareholder and chairman of MPG's board of directors, testified in behalf of MPG. Dr. Murray stated that he had held his share in MPG since its inception in 1982 and he had paid $10 for the share. Dr. Murray also stated that if he sold his share, he would receive $10 and he had never received a dividend on his share. Murray further stated that a physician's compensation is computed by the administrative staff by making an estimate at the beginning of the year as to what revenues the department would be receiving, then the departmental chairman would make his recommendation as to how the money would be split up. The dean of the medical school would then approve or disapprove of the recommendation. Murray also stated that in the event of a shortfall in the revenues, the physicians were expected to pay back the overpayment of money, or would defer paying back the money for a year and try to make up the revenue the next year. If there was an overage, it would be split up between members of the department according to the dean's guidelines. Murray further stated that the patients' bills were sent out in the name of MPG and MPG collected the funds and used them to pay the physicians' salaries. Signs were also posted at the hospital facilities to indicate free care was available, and Murray himself had admitted patients whom he knew did not have the ability to pay.

According to MPG's bylaws, a member who devoted at least "two-thirds percent or more of their professional activities, as determined by the Directors, to the work of the Corporation," were entitled to become shareholders in MPG. The management of MPG was directed by the board of directors which was made up of 34 members of MPG. Members of the board of directors were not compensated. According to MPG's "Consolidated Statements of Revenue and Expenses and Changes in Fund Balance" for 1992, 1993 and 1994, MPG received revenue from "net patient service revenue," "teaching and administrative revenue," "interest and other income," and "insurance underwriting income."

On September 23, 1996, the Department rendered its decision, denying MPG's request that an exemption be granted for the tax years 1992, 1993 and 1994. With respect to the school exemption, the administrative law judge (ALJ) who presided over the hearing stated:

"The parcel here in issue is owned by [MPG] and not the College and according to the evidence and testimony was used exclusively for the administrative functions of collecting fees earned by the stockholders and administering the numerous benefit packages provided to the stockholders and not for classroom work or teaching in a clinic or hospital setting.

I therefore conclude the parcel here in issue and the three story building thereon did not qualify for the school exemption as set forth in 35 ILCS 205/ILCS 205/19.7 or 35 ILCS 200/15-35 for the 1992, 1993 and 1994 assessment years."

With respect to the charitable purposes exemption, the ALJ stated:

"[MPG] is organized pursuant to the "Business Corporation Act" and is incorporated as a Medical Corporation. [MPG's] attorney points out that the applicant's stockholders purchase a share of stock in the corporation for $10.00, and if they leave the service of the corporation must sell it back for the same $10.00. He also points out that no dividends are paid on the stock. However, he fails to point out that the stockholders set their own salaries as employees of the corporation as well as providing themselves with employee benefits including a pension plan, disability coverage, reimbursement of business expenses and malpractice insurance. *** In addition, it has been observed that no teaching of the students of the College, and no delivery of medical care to patients takes place at the building on this parcel. The activities which take place at the three story building on the parcel here in issue concern the collection of fees from patients and the administration of the various perks and benefits provided to the physician stockholder employees of [MPG]."

The Department's Director adopted the ALJ's recommendation and, on November 1, 1996, MPG filed a complaint in the circuit court pursuant to the Administrative Review Law (735 ILCS 5/3--101 et seq (West 1996)) requesting reversal of the Department's decision. At a hearing on MPG's complaint on September 17, 1997, MPG argued that the property qualified for a charitable exemption under the six Korzen guideline factors. The six factors are that the benefits derived are for an indefinite number of persons, the organization has no capital, capital stock or shareholders, and does not profit from the enterprise, funds are derived mainly from private and public charity and are held in trust for the objects and purposes expressed in the charter, the charity is dispensed to all who need and apply for it, no obstacles appear to be placed in the way of those seeking the benefits, and the exclusive use of the property is for charitable purposes. MPG argued the first factor was met because its physicians-employees were not allowed to maintain a private practice through MPG; the billings and monies received were the property of MPG; and the physicians' salaries were determined by MPG's heads of staff and subject to review by COHS. MPG also argued that its physicians provided charitable care, performed educational research activities and contributed several million dollars per year to the affiliated medical school, and supported a system of outreach clinics run by COHS. MPG maintained that the fact the doctors were paid a reasonable salary and received fringe benefits did not mean that the first factor was not met.

MPG further argued that the facts of its case were "virtually identical" to those in Lutheran General as to the second factor because its doctors were allowed to buy a share of MPG for $10 upon becoming employees, received no dividends, received no benefit if the corporation were to be liquidated, and were required to sell the shares back for the same $10. With respect to the third factor, MPG argued Lutheran General was "directly on point" because funds were received by MPG from Medicare and Medicaid and free care was given to indigent persons. Additionally, MPG argued that lawsuits were not filed if the patients were not able to pay. MPG also argued that the collected fees were used to further "the purposes and objectives of MPG," through paying the operating expenses, physicians' expenses, the administrative staff and making contributions to charitable organizations.

MPG further argued, based on Porn's and Dr. Murray's testimony, that the fourth factor was met because no one was turned away for treatment as a result of an inability to pay, some patients were given free care, and Medicaid and Medicare payments were accepted at discount rates. MPG also argued that the fifth factor was met because patients were informed by pamphlets and notices at the admitting desk that free care was available. As to the sixth factor, MPG argued that Porn's testimony showed that the subject property was used by administrative personnel and was "vital to the continued ability of MPG to provide medical care at COHS facilities." MPG also argued that the fact that medical care was not provided on the property should not make it ineligible for the charitable exemption.

With respect to a school exemption, MPG argued it was entitled to the exemption because "MPG doctors themselves form the mass bulk of the staff *** at Midwestern University, an accredited medical school." MPG also maintained that, based on Porn's testimony, "it would be difficult if MPG's facility did not exist for the doctors to perform their role as clinicians at the university."

In response to MPG's charitable exemption argument, defendants argued that MPG and its physicians worked as independent contractors pursuant to an affiliation agreement with COHS and were a "distinct entity." Defendants further argued that the fact that COHS provided services for indigents and for patients under the Hill-Burton Act did not "come into play" in determining whether MPG used its property for charitable purposes. Defendants also argued that MPG used its property for the efficient running of MPG's activities and not COHS' activities. Defendants further argued that the MPG property was used exclusively for the administration of MPG in that the property housed "the executive and administrative personnel for management, administration, billing, collections, accounting and other payroll functions," and no patient treatment took place on the property. Defendants also distinguished the case at bar from Lutheran General, arguing that MPG's physicians earn a competitive salary, the physicians can have an outside practice, and no charitable activities or patient care takes place on the property.

Defendants further argued MPG was not entitled to a school exemption because the Tax Code did not exempt property that was used to support educational activities, but rather property that was used exclusively for school purposes. Defendants maintained that MPG's property was not used exclusively for school purposes because it was used for administrative purposes such as "administrating MPG's payroll, salary, and employee benefits."

On September 26, 1997, the trial court affirmed the Department's decision, based upon its application of the Korzen factors. Specifically, in finding that MPG was not entitled to a charitable exemption, the trial court stated:

"In this court's view, consideration of *** [the Korzen] factors leads to the clear conclusion that the Department did not err in denying the charitable exemption for the subject property.

As to the first factor, *** MPG is a for-profit corporation which exists for the primary purpose, indeed for the predominant purpose, of benefiting its physician/ shareholders. Its principal activities are to bill and, if necessary, to engage in collection practices, relative to services provided to patients by the physicians of MPG. A substantial portion of the revenue raised by these activities are then paid to MPG's physician/shareholders as salary.

Importantly, the salaries of the physician/shareholders of MPG must be set at comparable levels to those earned by physicians engaged in private practice in the Chicago area. Additionally, MPG allows its physicians to engage in outside practices. Together, these features strongly suggest that MPG is engaged in a commercial enterprise, not a charitable one. These factors also serve to distinguish the nature of MPG's enterprise from the medical practice at issue in Lutheran General Health Care System v. Department of Revenue, 231 Ill. App.3d 652 (1st Dist., 1992), which is relied upon by MPG. ***

Furthermore, MPG's association with the charitable organizations of Chicago Osteopathic Health Systems [COHS] is far too distant to allow MPG to dress itself as a charitable organization by counting among those it benefits the people who receive treatment through the facilities of the System. MPG and Chicago Osteopathic Health Systems themselves described this affiliation in terms of MPG being an 'independent contractor.' *** This lack of close relationship between the charitable medical provider and the subject again constitutes a significant difference from the facts presented in Lutheran General. ***

Finally, that a portion of MPG's very substantial revenues were given to certain of the not-for-profit affiliates of Chicago Osteopathic Health Systems fails to demonstrate that MPG is itself a charitable institution. ***

As to the second factor, *** the stockholders here directly benefit from their ownership of MPG in a way not found in Lutheran General. The clear focus of the second factor is whether individuals profit from the enterprise, not the narrower inquiry of whether dividends are paid or the stock is allowed to appreciate. *** Here, the mechanism by which the shareholders of MPG profit is neither dividends nor appreciation, but the market-rate salaries which MPG is obligated to pay them. Additionally, the physician/ shareholders, through MPG's Board of Directors, have the power to determine the amounts of these salaries. Because the physician/shareholders profit in these significant ways from their ownership in MPG, the second factor of Korzen has not been met. ***

As to the third factor, MPG does not receive its funds from public or private charity, but rather from the patients of its physician/shareholders. Furthermore, these funds are not held in trust for a charitable purpose, but rather are spent principally in paying the salaries of the physician/ shareholders of MPG and administering their benefit plans.

As to the fourth and fifth factors, MPG maintains that it disbursed charity to all in need and that there were no barriers to those seeking benefits. Again, these arguments depend on acceptance of the premise that MPG is so intimately linked with Chicago Osteopathic Health Systems, that the charitable works of Systems should be attributed to MPG. For the reasons discussed above, the court cannot accept this premise. Instead, the court finds that there is no evidence in the record showing that MPG disbursed charity to all who were in need or that there were no barriers to charity.

Finally, as to the sixth factor, the court finds that the primary use of the property was not charitable in nature. No treatment or medical research took place at the subject parcel. Rather, the subject property was used by a for-profit medical practice plan for the primary purposes of billing patients and collecting debts. Again, the use here stands in sharp contrast to the use of the property in Lutheran General, which was for medical research, patient treatment and teaching."

In finding that MPG was not entitled to a school exemption, the trial court stated:

"Here, the property is owned by a for-profit corporation. Its primary use is the operation of a private medical practice plan. There is no educational use made of the property, nor is the property's use related to the efficient administration of Midwestern University, the medical school affiliate of Chicago Osteopathic Health Systems. That some of the revenue generated by MPG is donated to Midwestern University does not approach the requirement that the property's primary use be for educational purposes."

This appeal followed.

The scope of review under the Administrative Review Law extends to all questions of law and fact presented by the entire record before the court. 735 ILCS 5/3--110 (West 1996). The reviewing court's function is limited to determining whether the Department's decision is against the manifest weight of the evidence. Nokomis Quarry Co. v. Department of Revenue, 295 Ill. App. 3d 264, 267, 692 N.E.2d 855 (1998); Institute of Gas Technology v. Department of Revenue, 289 Ill. App. 3d 779, 782, 683 N.E.2d 484 (1997); Evangelical Hospitals Corp. v. Department of Revenue, 223 Ill. App. 3d 225, 229, 584 N.E.2d 1004 (1991). However, when the facts are undisputed, as in this case, a determination of whether property is exempt from taxation is a question of law. Institute of Gas Technology, 289 Ill. App. 3d at 782; Chicago Patrolmen's Ass'n v. Department of Revenue, 171 Ill. 2d 263, 271, 664 N.E.2d 52 (1996).

On appeal, MPG first argues that the trial court's affirmance of the Department's decision should be reversed and the cause remanded with directions to allow the charitable property tax exemptions for the years 1992, 1993 and 1994. MPG maintains that it met the six Korzen factors which have been recognized by Illinois courts in determining whether the use of property is for charitable purposes. MPG also argues that the facts of its case are analogous to Lutheran General in which this court held that an organization which operated hospitals and a physicians group was entitled to a charitable exemption based upon the Korzen factors.

The Department contends that MPG was not entitled to a charitable exemption because MPG existed for the benefit of its shareholders who were MPG's physicians and MPG's activities were not charitable in nature. Defendant argues that MPG's physicians were paid "nearly half of the patient billing revenues in cash or benefits" and the physicians' compensations were "linked to the volume of billing their department generate[d]." The Department maintained that MPG was "controlled by physician shareholders," "set their own compensation levels," were "compensated in relation to the billing they generate[d]" and used corporation assets to "increase the volume of patient billing," and, therefore, was not entitled to the exemption. The Department also argues that Lutheran General is distinguishable from the present case because the physicians in that case spent 52% of their time on educational, research and administrative activities, they received below market incomes, and they were not allowed to maintain a private practice. The Department argues that in the present case, MPG's physicians "had an interest in the fees they generate[d]," "develop[ed] their own practices," produced no evidence of the time MPG's physicians spent on education, research, and administration, and the physicians' income was "directly tied to the fees they generate[d]."

Defendant Board of Education of Rich Township High School District No. 227 (Board of Education) argues that MPG's property "was used exclusively to house the executive and administrative employees necessary to operate MPG," and that "[t]he creation and dissemination of invoices to paying customers, as well as the administration of employee benefits for MPG members have nothing to do with the provision of charity by other entities."

Before addressing MPG's charitable purposes exemption argument, we first consider the Department's argument, raised for the first time on appeal, that MPG was collaterally estopped from seeking a charitable exemption on its property because MPG litigated this question before the Department and the trial court for the 1985 tax year. While the Department concedes that this issue was not raised at trial, it argues that "a reviewing court may affirm a lower court's decision on any grounds presented by the record." MPG counters that collateral estoppel would not have applied because the circumstances had changed since the trial court's ruling in the 1985 case. MPG maintains that the basis for the trial court's ruling in the 1985 case was that MPG's predecessor corporation had issued stock, and that after Lutheran General, the law changed so that now a corporation's issuance of stock to its shareholders is no longer a bar to a charitable exemption. MPG further argues that collateral estoppel is an affirmative defense that defendants were required to plead at trial, and did not.

Collateral estoppel "is an affirmative defense which must be pleaded to be available" and is considered waived if not raised at trial. Waste Management of Illinois, Inc. v. Pollution Control Board, 187 Ill. App. 3d 79, 83-84, 543 N.E.2d 505 (1989). In the present case, because the Department did not raise collateral estoppel as an affirmative defense at trial, it has waived this issue for review. Moreover, we briefly note that collateral estoppel applies where the facts in the case are disputed, and, in the present case, the facts are not in dispute. Nokomis, 295 Ill. App. 3d at 267-68. Therefore, collateral estoppel is inapplicable here, and we proceed to the merits of this appeal.

It is well settled that statutes exempting property from taxation are to be strictly construed in favor of taxation. Harrisburg-Raleigh Airport Authority v. Department of Revenue, 126 Ill. 2d 326, 331, 533 N.E.2d 1072 (1989). In determining whether property is included within the scope of a tax exemption, all facts are to be construed and all debatable questions resolved in favor of taxation. City of Chicago v. Department of Revenue, 147 Ill. 2d 484, 491-92, 590 N.E.2d 478 (1992). Each individual claim for exemption must be determined from the facts presented. Chicago Patrolmen's Ass'n, 171 Ill. 2d at 271. The taxpayer seeking the exemption bears the burden of proving by clear and convincing evidence that the exemption applies. Evangelical Hospitals, 223 Ill. App. 3d at 231. The decision as to whether property is exempt then depends solely upon the application of the appropriate legal standard to the undisputed facts. Du Page County Board of Review v. Joint Comm'n on Accreditation of Healthcare Organizations, 274 Ill. App. 3d 461, 467, 654 N.E.2d 240 (1995).

The legislature is empowered to exempt certain property from taxation pursuant to article IX, section 6, of the Illinois Constitution, which provides:

"The General Assembly by law may exempt from taxation only the property of the State, units of local government and school districts and property used exclusively for agricultural and horticultural societies, and for school, religious, cemetery and charitable purposes." Ill. Const. 1970, art. IX,