128 T.C. No. 5
UNITED STATES TAX COURT
RAINBOW TAX SERVICE, INC., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 7738-05. Filed March 8, 2007.
Petitioner employed individuals to provide tax
return preparation and bookkeeping services.
Petitioner calculated its tax liability for
petitioner’s tax years ending June 30, 2002 and 2003,
using the graduated corporate income tax rates set
forth in sec. 11(b)(1), I.R.C.
Held: Petitioner’s tax return preparation and
bookkeeping services constitute accounting services for
purposes of sec. 448(d)(2), I.R.C., and petitioner is
therefore subject to the sec. 11(b)(2), I.R.C., flat
35-percent tax rate applicable to qualified personal
service corporations.
Donna Joyner-Rodgers (an officer), for petitioner.
Derek W. Kaczmarek, for respondent.
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