Title 26 — Internal Revenue Code
Part I · Chapter 1 — Normal Taxes and Surtaxes
§ 532. Corporations subject to accumulated earnings tax
Statutory text
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.
Exceptions
The accumulated earnings tax imposed by section 531 shall not apply to—
a personal holding company (as defined in section 542),
a corporation exempt from tax under subchapter F (section 501 and following), or
a passive foreign investment company (as defined in section 1297).
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.
Legislative history
Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.
Aug. 16, 1954, ch. 736, 68A Stat. 179 · 68A Stat. 179
Enacted · 26 U.S.C. § 532
Aug. 16, 1954, ch. 736, 68A Stat. 179
Source evidence
Code source credit
Aug. 16, 1954, ch. 736, 68A Stat. 179Tax Reform Act of 1984
Pub. L. 98–369 div. A title I § 58(a) · 98 Stat. 494
Added · 26 U.S.C. § 532(c)
Pub. L. 98–369 added subsec. (c)
Source evidence
Code amendment note
Subsec. (c). Pub. L. 98–369 added subsec. (c).Enacted provision · exact public law section
(a) Clarification That Tax Applies to Corporations Which Are Not Closely Held.— 26 USC 532. Section 532 (relating to corporations subject to accumulated earnings tax) is amended by adding at the end thereof the following new subsection: “(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.”Tax Reform Act of 1986
Pub. L. 99–514 title XII § 1235(f)(1) · 100 Stat. 2085
Added · 26 U.S.C. § 532(b)(4)
Pub. L. 99–514 added par. (4)
Source evidence
Code amendment note
Subsec. (b)(4). Pub. L. 99–514 added par. (4).Enacted provision · exact public law section
(1) Subsection (b) of section 532 (relating to exceptions from accumulated earnings tax) is amended by striking out “or” at the end of paragraph (2), by striking out the period at the end of paragraph (3) and inserting in lieu thereof “, or”, and by adding at the end thereof the following new paragraph:Pub. L. 105–34 title XI § 1122(d)(1) · 111 Stat. 788
Substituted · 26 U.S.C. § 532(b)(4)
Pub. L. 105–34 substituted “section 1297” for “section 1296”
Source evidence
Code amendment note
Subsec. (b)(4). Pub. L. 105–34 substituted “section 1297” for “section 1296”.Enacted provision · exact public law section
(1) Sections 532(b)(4) and 542(c)(10) are each amended by striking “section 1296” and inserting “section 1297”.Tax Technical Corrections Act of 2005
Pub. L. 109–135 title IV § 403(n)(1) · 119 Stat. 2577
Redesignated · 26 U.S.C. § 532(b)(2)(4)
Pub. L. 109–135 redesignated pars. (3) and (4) as (2) and (3), respectively
Struck · 26 U.S.C. § 532(b)(2)(4)
Pub. L. 109–135 struck out former par. (2) which read as follow: “a foreign personal holding company (as defined in section 552),”
Source evidence
Code amendment note
Subsec. (b)(2) to (4). 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),”.Enacted provision · exact public law section
(1) Subsection (b) of section 532 is amended by striking paragraph (2) and redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively.Effective date note
Amendment by Pub. L. 109–135 effective as if included in the provision of the American Jobs Creation Act of 2004, Pub. L. 108–357, to which such amendment relates, see section 403(nn) of Pub. L. 109–135, set out as a note under section 26 of this title.
5 of 6 references resolved to an enrolled provision · 1 partial
Editorial Notes
Amendments1984–2005 · 4 rounds
2005
Subsec. (b)(2) to (4). 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
Subsec. (b)(4). Pub. L. 105–34 substituted “section 1297” for “section 1296”.
1986
Subsec. (b)(4). Pub. L. 99–514 added par. (4).
1984
Subsec. (c). Pub. L. 98–369 added subsec. (c).
Statutory Notes and Related Subsidiaries
Effective Date of 2005 Amendment
Amendment by Pub. L. 109–135 effective as if included in the provision of the American Jobs Creation Act of 2004, Pub. L. 108–357, to which such amendment relates, see section 403(nn) of Pub. L. 109–135, set out as a note under section 26 of this title.
Effective Date of 1997 Amendment
Pub. L. 105–34, title XI, § 1124, , 111 Stat. 978, provided that:
“The amendments made by this subtitle [subtitle C (§§ 1121–1124) of title XI of Pub. L. 105–34, enacting section 1296 of this title, amending this section and sections 542, 551, 852, 1291, 1293, 1296 to 1298, and 4982 of this title, redesignating subpart C of part VI of subchapter P of this chapter as subpart D of part VI of subchapter P of this chapter, and renumbering sections 1296 and 1297 of this title as sections 1297 and 1298, respectively, of this title] shall apply to—
“(1) taxable years of United States persons beginning after , and
“(2) taxable years of foreign corporations ending with or within such taxable years of United States persons.”
Effective Date of 1986 Amendment
Amendment by Pub. L. 99–514 applicable to taxable years of foreign corporations beginning after , see section 1235(h) of Pub. L. 99–514, set out as an Effective Date note under section 1291 of this title.
Effective Date of 1984 Amendment
Pub. L. 98–369, div. A, title I, § 58(c), , 98 Stat. 576, provided that: “The amendments made by this section [amending this section and section 535 of this title] shall apply to taxable years beginning after the date of the enactment of this Act [].”
Credits
1954–2005 · 5 acts
- 1954Aug. 16, 1954, ch. 736, 68A Stat. 179
- 1984Pub. L. 98–369, div. A, title I, § 58(a), , 98 Stat. 574
- 1986Pub. L. 99–514, title XII, § 1235(f)(1), , 100 Stat. 2575
- 1997Pub. L. 105–34, title XI, § 1122(d)(1), , 111 Stat. 977
- 2005Pub. L. 109–135, title IV, § 403(n)(1), , 119 Stat. 2626.
Show as published
(Aug. 16, 1954, ch. 736, 68A Stat. 179; Pub. L. 98–369, div. A, title I, § 58(a), , 98 Stat. 574; Pub. L. 99–514, title XII, § 1235(f)(1), , 100 Stat. 2575; Pub. L. 105–34, title XI, § 1122(d)(1), , 111 Stat. 977; Pub. L. 109–135, title IV, § 403(n)(1), , 119 Stat. 2626.)