Land surveying can be performed only by licensed surveyor

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Tern Corporation, a calendar year C corporation, is solely owned by Jessica Ramirez. Tern's only business since its incorporation in 2012 has been land surveying services. In Tern's state of incorporation, land surveying can be performed only by a licensed surveyor. Jessica, Tern's only employee, is a licensed surveyor but is not a licensed engineer. Upon audit of Tern's 2012 and 2013 tax returns, the IRS assessed tax deficiencies stemming from its conclusion that the corporation was a personal service corporation subject to the flat tax rate of 35%. Jessica believes that the IRS's determination is incorrect, and she has asked you for advice on how to proceed. Evaluate the IRS's position regarding the treatment of Tern Corporation as a personal service corporation, and prepare a memo for the client files describing the results of your research.

Reference no: EM131253602

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Land surveying can be performed only by licensed surveyor : Tern Corporation, a calendar year C corporation, is solely owned by Jessica Ramirez. Tern's only business since its incorporation in 2012 has been land surveying services. In Tern's state of incorporation, land surveying can be performed only by a li..
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