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Petitioner, however, argues that, for purposes of section
448(d)(2)(A), tax return preparation and bookkeeping services do
not constitute accounting services, that petitioner therefore
does not meet the above function test, and that petitioner should
not be treated as a qualified personal service corporation.
Petitioner argues that under Nevada law, accounting
services can be performed only by C.P.A.s, and that because
petitioner is not a C.P.A. firm, does not employ C.P.A.s, and
does not perform services which are restricted under Nevada law
to C.P.A.s, petitioner should not be treated as performing
accounting services.
In essence, petitioner would treat only those services which
require a C.P.A. license as accounting services and would treat
other tax return preparation and bookkeeping services as
nonaccounting services.
We disagree with petitioner’s overly restrictive definition
of accounting services.
Petitioner fails to appreciate the distinction between
“public accounting” and “accounting”. Public accounting, which
generally consists of the preparation and/or audit of financial
statements, and generally requires a C.P.A. license, represents a
branch of accounting, not the entire realm of accounting. See
Weygandt, et al., Accounting Principles, 6-9 (3d ed. 1993).
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