Does the IRS require a Securities Trader to be a Pattern Day Trader in order to qualify for Trader Status?
No. The Courts do not have any such requirement. Occasionally an IRS agent doing an examination may disallow trader status on the grounds that the taxpayer is not a “day trader” flipping stocks on a daily basis, but this has no basis in law and should not be a problem if discussed with the examiner’s manager, In the worst case it is generally resolved by going to appeals to have the examiner’s position reversed..
