Internal Revenue Code · 26 U.S.C.
§ 532. Corporations subject to accumulated earnings tax
Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).
Cite as 26 U.S.C. § 532
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Enacted
- July 18, 1984 by Pub. L. 98–369
- Last amended
- December 21, 2005 by Pub. L. 109–135
- Amendments
- 3 dated changes in the source credit
- Length
- 3 subsections · 198 words · about 1 min to read
- Cross-references
- cites 4; cited by 2 Code sections and 2 other regulations
- Regulations
- 1 issued under this section
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 application of this part to a corporation shall be determined without regard to the number of shareholders of such corporation.
(Aug. 16, 1954, ch. 736, 68A Stat. 179; Pub. L. 98–369, div. A, title I, § 58(a), July 18, 1984, 98 Stat. 574; Pub. L. 99–514, title XII, § 1235(f)(1), Oct. 22, 1986, 100 Stat. 2575; Pub. L. 105–34, title XI, § 1122(d)(1), Aug. 5, 1997, 111 Stat. 977; Pub. L. 109–135, title IV, § 403(n)(1), Dec. 21, 2005, 119 Stat. 2626.)
Regulations under this section
Treasury regulations (26 CFR) issued under § 532
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 4 other sections
- § 531 Imposition of accumulated earnings tax
- § 542 Definition of personal holding company
- § 501 Exemption from tax on corporations, certain trusts, etc.
- § 1297 Passive foreign investment company
Cited by 2 Code sections
Cited in 2 regulations not issued under it
Amendment history
From the source credit and the official notes, newest first.
Where it sits in the Code
- Subtitle A Income Taxes
- Chapter 1 NORMAL TAXES AND SURTAXES
- Subchapter G Corporations Used to Avoid Income Tax on Shareholders
- Part I CORPORATIONS IMPROPERLY ACCUMULATING SURPLUS
Nearby sections
- § 531 Imposition of accumulated earnings tax
- § 532 Corporations subject to accumulated earnings tax
- § 533 Evidence of purpose to avoid income tax
- § 534 Burden of proof
- § 535 Accumulated taxable income
- § 536 Income not placed on annual basis
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Editorial Notes
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).
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, Aug. 5, 1997, 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 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
Pub. L. 98–369, div. A, title I, § 58(c), July 18, 1984, 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 [July 18, 1984].”