§533 — Evidence of purpose to avoid income tax

26 cases·10 followed·2 distinguished·14 cited—38% support

Statute Text — 26 U.S.C. §533

(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.

Treasury Regulations

Treas. Reg. §Treas. Reg. §1.533-1 Evidence of purpose to avoid income tax
Treas. Reg. §Treas. Reg. §1.533-1(a) In general.
Treas. Reg. §Treas. Reg. §1.533-1(b) General burden of proof and statutory presumptions.
Treas. Reg. §Treas. Reg. §1.533-1(c) Holding or investment company.
Treas. Reg. §Treas. Reg. §1.533-1(d) Small business investment companies.
Treas. Reg. §Treas. Reg. §1.533-1(i) §1.533-1(i)
Treas. Reg. §Treas. Reg. §1.533-2 Statement required

26 Citing Cases

Metro Leasing & Development, Corp. East Bay Chevrolet Company, A Corp., Petitioner T.C. Memo. 2001-119 · 2001

The adjustments we have considered in these cases are quite technical in nature (whether petitioner was a “mere holding company” within the meaning of section 533 and whether the Valentes’ compensation was reasonable).

John Edward Tucker, Petitioner T.C. Memo. 1999-373 · 1999

ceive if ordered to active duty for that period of time during which such personnel perform duties in direct support of Junior ROTC. This should 3 Title 10 U.S.C. 2031(d) was amended by the National Defense Act for Fiscal Year 1993, Pub. L. 102-484, sec. 533(e), 106 Stat. 2315. - 7 - not be considered an attempt to cap or limit the amount of pay that may be agreed upon between the individual Junior ROTC instructor and the instructor's employer, however, the Army will pay no more than the compute

Dahlem Foundation, Inc. v. Commissioner 54 T.C. 1566 · 1970

Snow Manufacturing Co. v. Commissioner 86 T.C. 260 · 1986

Thompson Engineering Co. v. Commissioner 80 T.C. 672 · 1983

Atlas Tool Co. v. Commissioner 70 T.C. 86 · 1978

Atlantic Properties, Inc. v. Commissioner 62 T.C. 644 · 1974

Ready Paving & Construction Co. v. Commissioner 61 T.C. 826 · 1974

GPD, Inc. v. Commissioner 60 T.C. 480 · 1973

Magic Mart, Inc. v. Commissioner 51 T.C. 775 · 1969

Novelart Manufacturing Co. v. Commissioner 52 T.C. 794 · 1969

Electric Regulator Corp. v. Commissioner 40 T.C. 757 · 1963

Haffner's Service Stations, Inc. v. Commissioner 326 F.3d 1 · Cir.

H. C. Cockrell Warehouse Corp. v. Commissioner 71 T.C. 1036 · 1979

Golconda Mining Corp. v. Commissioner 58 T.C. 139 · 1972

Montgomery Co. v. Commissioner 54 T.C. 986 · 1970

Rhombar Co. v. Commissioner 47 T.C. 75 · 1966

Apollo Industries, Inc. v. Commissioner 44 T.C. 1 · 1965

Factories Investment Corp. v. Commissioner 39 T.C. 908 · 1963

Nemours Corp. v. Commissioner 38 T.C. 585 · 1962

James M. Pierce Corp. v. Commissioner 38 T.C. 643 · 1962

Hess v. Commissioner 7 T.C. 333 · 1946

Hosp Corp Amer v. CIR · Cir.

In Re: United · Cir.

In Re: United Healthcare System, Inc., Debtor the Reconstituted Committee of Unsecured Creditors of the United Healthcare System, Inc. v. State of New Jersey Department of Labor 396 F.3d 247 · Cir.

Reconstituted Committee of Unsecured Creditors of the United Healthcare System, Inc. v. New Jersey Department of Labor (In re United Healthcare System, Inc.) 396 F.3d 247 · Cir.