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 qualified personal service corporation may provide services? 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?