Personal Service Corporation

Personal Service Corporation means:
a corporation the principal activity of which is the performance of personal services, which are substantially performed by employee-owners. A corporation the principal activity of which is the performance of personal services; for example, a management consulting company which sends its personnel to prepare a report on a client company. Such corporations are treated adversely in that all income is taxed at the highest corporate rate (e.g. 35% in 1994). Former IRC (check if this IRC provision is current here) §269A. For purposes of passive activity losses, however, this definition is modified slightly. Former IRC (check if this IRC provision is current here) §469.