If an S Corporation's services changed to mostly bookkeeping or income tax preparation instead of construction, does that trigger an entity change to a personal services corporation according to the IRS?

ANSWER

The BIDaWIZ Team's Answer:

Based on the facts and circumstances that you've provided, the answer is yes. Per IRC Section 448d(2), a qualified personal services company is defined as a company in which substantially all of the activities involved include either health, law, engineering, architecture, accounting, actuarial science, performing arts, or consulting. Thus, the entity will be viewed as a personal services corporation according to the IRS.