- 5 -
involve the performance of services in one or more of
the following fields--
(A) Health,
(B) Law,
(C) Engineering (including surveying and mapping),
(D) Architecture,
(E) Accounting,
(F) Actuarial science,
(G) Performing arts, or
(H) Consulting.
Substantially all of the activities of a corporation
are involved in the performance of services in any
field described in the preceding sentence (a qualifying
field), only if 95 percent or more of the time spent by
employees of the corporation * * * is devoted to the
performance of services in a qualifying field. * * *
[Emphasis added.]
As relevant to this case, a corporation meets the ownership test
if substantially all of the corporation’s stock (by value) is
held directly (or indirectly) by employees performing services
for the corporation in connection with activities involving a
qualifying field. Sec. 448(d)(2)(B); see also sec. 1.448-
1T(e)(5), Temporary Income Tax Regs., 52 Fed. Reg. 22770 (June
16, 1987).
II. The Parties’ Positions
Petitioner asserts that, during 2002, approximately 70
percent of its activities involved the performance of services in
the qualifying field of architecture. Petitioner asserts that
the remaining 30 percent of its activities involved the
performance of nonarchitectural services. Petitioner concludes
that, because less than substantially all (less than 95 percent)
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: November 10, 2007