26 U.S.C. § 532
Section 532 · Corporations subject to accumulated earnings tax
Amended 5 times on record
Applied in 28 court decisions — leading case United States v. Donruss Co. (1969)
Most recently applied in 288 F. Supp. 2d 730 - Otto Candies, LLC v. United States (June 2003)
How often courts cite this section
Court decisions citing this, by year.Markers show enactment, consequential amendments, and circuit splits over this section — watch for a citation surge after a change or a disagreement. The dip in the last several years is a data-coverage gap, not a real trend — our corpus holds fewer opinions from the most recent years, so recent citations are undercounted.
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.
The accumulated earnings tax imposed by section 531 shall not apply to—
(1) a personal holding company (as defined in section 542),
(2) a corporation exempt from tax under subchapter F (section 501 and following), or
(3) a passive foreign investment company (as defined in section 1297).
The application of this part to a corporation shall be determined without regard to the number of shareholders of such corporation.
Editorial notes U.S. Code · Office of the Law Revision Counsel
Amendments
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).
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
Section 1124 of Pub. L. 105–34 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 December 31, 1997, 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 Dec. 31, 1986, 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
Section 58(c) of Pub. L. 98–369 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 [July 18, 1984].”