(a) General rule The accumulated earnings tax imposed by section 531 shall apply to every corporation (other than those described in subsection (b)) formed or availed of for the purpose of avoiding the income tax with respect to its shareholders or the shareholders of any other corporation, by permitting earnings and profits to accumulate instead of being divided or distributed.
(b) Exceptions The accumulated earnings tax imposed by section 531 shall not apply to—
Amended 1986, 1997, 2005
- 2005 Pub. L. 109-135 Pub. L. 109–135 redesignated pars. (3) and (4) as (2) and (3), respectively, and struck out former par. (2) which read as follow: “a foreign personal holding company (as defined in section 552),”.
- 1997 Pub. L. 105-34 Pub. L. 105–34 substituted “section 1297” for “section 1296”.
- 1986 Pub. L. 99-514 Pub. L. 99–514 added par. (4).
Cited by 2
(1) a personal holding company (as defined in section 542),
(2) a corporation exempt from tax under subchapter F (section 501 and following), or
Amended 2005
- 2005 Pub. L. 109-135 Pub. L. 109–135 redesignated pars. (3) and (4) as (2) and (3), respectively, and struck out former par. (2) which read as follow: “a foreign personal holding company (as defined in section 552),”.
(3) a passive foreign investment company (as defined in section 1297).
Amended 2005
- 2005 Pub. L. 109-135 Pub. L. 109–135 redesignated pars. (3) and (4) as (2) and (3), respectively, and struck out former par. (2) which read as follow: “a foreign personal holding company (as defined in section 552),”.
(c) Application determined without regard to number of shareholders The application of this part to a corporation shall be determined without regard to the number of shareholders of such corporation.
Amended 1984
- 1984 Pub. L. 98-369 Pub. L. 98–369 added subsec. (c).