
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC533]

 
                     TITLE 26--INTERNAL REVENUE 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
 
Sec. 533. Evidence of purpose to avoid income tax


(a) Unreasonable accumulation determinative of purpose

    For purposes of section 532, the fact that the earnings and profits 
of a corporation are permitted to accumulate beyond the reasonable needs 
of the business shall be determinative of the purpose to avoid the 
income tax with respect to shareholders, unless the corporation by the 
preponderance of the evidence shall prove to the contrary.

(b) Holding or investment company

    The fact that any corporation is a mere holding or investment 
company shall be prima facie evidence of the purpose to avoid the income 
tax with respect to shareholders.

(Aug. 16, 1954, ch. 736, 68A Stat. 179.)
