On page 16-12, the text states that corporations (other than S corporations) are generally prohibited from using the cash method of accounting, but that there is an exception for qualified personal service corporations. The text states that a qualified personal service corporation is one that performs services in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, or consulting and whose employees own substantially all of the stock of the corporation.

• Are there any other fields in which a corporation may provide services to qualify as a qualified personal service corporation? If so, please list them.
• What is the test for determining if a qualified personal service corporation meets the stock ownership requirement? Describe in detail.
• What are the consequences of a corporation failing to meet the criteria as a qualified personal service corporation for a taxable year?

Please answer each question in complete sentences, and cite name and number of the IRS publication or form/instruction where you found each answer, and the page number on which the answer is found. Use your own words in the answer do not copy the IRS language.