§ 532 Corporations subject to accumulated earnings tax
(a) General rule
The accumulated earnings tax imposed by section 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 shall not apply to—
(1) a personal holding company (as defined in section ),
(2) a corporation exempt from tax under subchapter F (section and following), or
(3) a passive foreign investment company (as defined in section ).
(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.
(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.)
Operative text only. Editorial notes, amendment history, and effective dates: official OLRC text of § 532