Ultrasound Services Company Was a Personal Service Corp

A husband and wife owned a C corporation that provided ultrasound services to medical offices and clinics throughout southern Colorado. For the years at issue, the corporation calculated its tax liabilities at the reduced graduated corporate tax rate of 15%. Upon audit, the IRS argued that the company was a Personal Service Corporation (PSC) and used a 35% tax rate to recalculate its liabilities. The company claimed that it wasn't a PSC because its employees weren't required to be licensed in Colorado, didn't provide direct treatment services to patients, and didn't make healthcare decisions. The Tax Court disagreed, holding that ultrasound services fall within the health profession. Therefore, the company was a PSC for tax purposes. Reza Zia-Ahmadi , TC Summ. Op. 2017-39 (Tax Ct.).

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Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.