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Tern Corporation, a calender year C corporation, is solely owned by Jessica Ramirez. Tern's only business since its incorporation in 2009 has been land surveying services. In Tern's state of incorporation, land surveying can be performed only by a licensed engineer. Upin audit of Tern's 2009 and 2010 tax returns, the IRS assessed tax deficiencies stemming from its conclusion that the 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.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91403227

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