Final answer:
Sheila would be classified as an active investor since she buys and sells securities extensively but is not engaged in it as a trade or business according to the IRS.
Step-by-step explanation:
If the IRS has determined that Sheila is not in a trade or business concerning her securities transactions, then she cannot be classified as a securities' dealer or a broker, as both of these designations require a level of professional involvement in the securities market that constitutes conducting a trade or business. Instead, Sheila would best be described as an active investor.
Active investors are typically those who manage their own investment portfolios but are not engaged in buying and selling securities as their primary business. Dealers and brokers, on the other hand, are regulated and supervised by financial authorities due to the nature of their business which regulates and supervises the sale of securities and involves frequent transactions on behalf of others or for their own accounts respectively.