(12), or members thereof, for the (12), or members thereof, for the Sec. 101. (14) Corporations or- over the entire amount thereof, less Sec. 101. (15) Corporations orSec. 101. (15) Corporations organized under Act of Congress, if ganized under Act of Congress, if such corporations are instrumen- such corporations are instrumentaltalities of the United States and if, ities of the United States and if, under such Act, as amended and under such Act, as amended and supplemented, such corporations supplemented, such corporations are are exempt from Federal income exempt from Federal income taxes; taxes; Sec. 101. (16) Voluntary emSec. 101. (16) Voluntary employees' beneficiary associations ployees' beneficiary associations providing for the payment of life, providing for the payment of life, sick, accident, or other benefits to sick, accident, or other benefits to the members of such association or the members of such association or their dependents, if (A) no part their dependents, if (A) no part of their net earnings inures (other of their net earnings inures (other than through such payments) to than through such payments) to the benefit of any private share-the benefit of any private shareholder or individual, and (B) 85 holder or individual, and (B) 85 per centum or more of the income per centum or more of the income consists of amounts collected from consists of amounts collected from members and amounts contributed members and amounts contributed to the association by the employer to the association by the employer of the members for the sole pur- of the members for the sole pur Taxable Years Beginning before 1939 Retroactivity Sec. 137 (b), R. A. of 1942, provides that the amendment made by Sec. 137 (a), R. A. of 1942, to Sec. 101 (16), I. R. C. (1939 column), shall be applicable to the revenue acts of 1928, 1932, 1934, 1936 and 1938, as if it had been a part of said revenue acts on the respective dates of their enactment. Sec. 137 (c), R. A. of 1942, provides that said amendment shall not apply to the employment taxes imposed by Subchapters A and C of Chapter 9 of I. R. C., or by corresponding provisions of a prior law. Taxable Years Beginning in 1943 Taxable Years Taxable Years pose of making such payments and pose of making such payments and pose of making such payments and meeting expenses; meeting expenses; meeting expenses; Sec. 101, (16), I. R. C., supra, amended by Sec. 137 (a), R. A. of 1942, to read as above. Sec. 137 (b) of said Act makes amendment effective as if it were a part of the I. R. C. when enacted on Feb. 10, 1939; but Sec. 137 (c) of said Act provides that the amendment shall not apply to the employment taxes imposed by subchapters A and C of chapter 9, I. R. C. For Sec. 101 (16) before amendment, see 1942 column. Sec. 101. (17) Teachers' retire Sec. 101, (16), I. R. C., supra, amended by Sec. 137 (a), R. A. of 1942, by_adding language in italics. Sec. 137 (b) of said Act makes amendment effective as if it were a part of the I. R. C. when enacted on Feb. 10, 1939; but Sec. 137 (c) of said Act provides that the amendment shall not apply to the employment taxes imposed by subchapters A and C of chapter 9, I. R. C. Sec. 101. (17) Teachers' retire Sec. 101, (16), I. R. C., supra, amended by Sec. 137 (a), R. A. of 1942, by adding language in italics. Sec. 137 (b) of said Act makes amendment effective as if it were a part of the I. R. C. when enacted on Feb. 10, 1939; but Sec. 137 (c) of said Act provides that the amendment shall not apply to the employment taxes imposed by subchapters A and с of chapter 9, I. R. C. Sec. 101. (17) Teachers' retirement fund associations of a purely ment fund associations of a purely ment fund associations of a purely local character, if (A) no part of local character, if (A) no part of local character, if (A) no part of their net earnings inures (other their net earnings inures (other their net earnings inures (other than through payment of retire-than through payment of retire- than through payment of retirement benefits) to the benefit of any ment benefits) to the benefit of any ment benefits) to the benefit of any private shareholder or individual, private shareholder or individual, private shareholder or individual. and (B) the income consists solely and (B) the income consists solely and (B) the income consists solely of amounts received from public of amounts received from public of amounts received from public taxation, amounts received from as- taxation, amounts received from as- taxation, amounts received from assessments upon the teaching sala-sessments upon the teaching sala- sessments upon the teaching salaries of members, and income in re- ries of members, and income in re- ries of members, and income in respect of investments; spect of investments; spect of investments; Sec. 101. (18) Religious or aposSec. 101. (18) Religious or aposSec. 101. (18) Religious or apostolic associations or corporations, if tolic associations or corporations, if tolic associations or corporations, if such associations or corporations such associations or corporations such associations or corporations have a common treasury or com- have a common treasury or com- have a common treasury or community treasury, even if such as-munity treasury, even if such as-munity treasury, even if such associations or corporations engage sociations or corporations engage sociations or corporations engage in business for the common benefit in business for the common benefit in business for the common benefit of the members, but only if the of the members, but only if the of the members, but only if the members thereof include (at the members thereof include (at the members thereof include (at the time of filing their returns) in their time of filing their returns) in their time of filing their returns) in their gross income their entire pro-rata gross income their entire pro-rata gross income their entire pro-rata shares, whether distributed or not, shares, whether distributed or not, shares, whether distributed or not, of the net income of the association of the net income of the association of the net income of the association or corporation for such year. Any or corporation for such year. Any or corporation for such year. Any amount so included in the gross in- amount so included in the gross in- amount so included in the gross income of a member shall be treated come of a member shall be treated come of a member shall be treated as a dividend received. as a dividend received. as a dividend received. Sec. 101. (19) Voluntary em- Sec. 101. (19) Voluntary em- Sec. 101. (19) Voluntary employees' beneficiary associations ployees' beneficiary associations ployees' beneficiary associations providing for the payment of life, providing for the payment of life, providing for the payment of life, sick, accident, or other benefits to sick, accident, or other benefits to sick, accident, or other benefits to the members of such association or the members of such association or the members of such association or their dependents or their desig- their dependents or their desig- their dependents or their designated beneficiaries, if (A) admis-nated beneficiaries, if (A) admis-nated beneficiaries, if (A) admission to membership in such associa- sion to membership in such associa- sion to membership in such association is limited to individuals who tion is limited to individuals who tion is limited to individuals who are officers or employees of the are officers or employees of the are officers or employees of the United States Government, and United States Government, and United States Government, and (B) no part of the net earnings of (B) no part of the net earnings of (B) no part of the net earnings of such association inures (other than such association inures (other than such association inures (other than through such payments) to the through such payments) to the through such payments) to the benefit of any private shareholder benefit of any private shareholder benefit of any private shareholder or individual. or individual. or individual. Sec. 101, I. R. C., supra, amended by Sec. 217 (a), R. A. of 1939, by adding para Sec. 101, I. R. C., supra, amended by Sec. 217 (a), R. A. of 1939, by adding para Sec. 101, I. R. C., supra, amended by Sec. 217 (a), R. A. of 1939, by adding para pose of making such payments and pose of making such payments and Sec. 101 (16), I. R. C., supra, amended by Sec. 137 (a), R. A. of 1942, by_adding language in italics. Sec. 137 (b) of said Act makes amendment effective as if it were a part of the I. R. C. when enacted on Feb. 10, 1939; but Sec. 137 (c) of said Act provides that the amendment shall not apply to the employment taxes imposed by subchapters A and C of chapter 9. I. R. C. Sec. 101 (16), I. R. C.. supra, amended by Sec. 137 (a), R. A. of 1942, by adding language in italics. Sec. 137 (b) of said Act makes amendment effective as if it were a part of the I. R. C. when enacted on Feb. 10, 1939; but Sec. 137 (c) of said Act provides that the amendment shall not apply to the employment taxes imposed by subchapters A and C of chapter 9, I. R. C. Sec. 101. (17) Teachers' retire- Sec. 101. (17) Teachers' retirement fund associations of a purely ment fund associations of a purely local character, if (A) no part of local character, if (A) no part of their net earnings inures (other their net earnings inures (other than through payment of retire-than through payment of retirement ment benefits) to the benefit of any benefits) to the benefit of any priprivate shareholder or individual, vate shareholder or individual, and and (B) the income consists solely (B) the income consists solely of of amounts received from public amounts received from public taxtaxation, amounts received from as-ation, amounts received from assesssessments upon the teaching sala-ments upon the teaching salaries of ries of members, and income in re- members, and income in respect of spect of investments; investments; Sec. 101. (18) Religious or aposSec. 101. (18) Religious or apostolie associations or corporations, if tolic associations or corporations, if such associations or corporations such associations or corporations have a common treasury or com- have a common treasury or community treasury, even if such as-munity treasury, even if such associations or corporations engage sociations or corporations engage in in business for the common benefit business for the common benefit of of the members, but only if the the members, but only if the memmembers thereof include (at the bers thereof include (at the time of time of filing their returns) in their filing their returns) in their gross gross income their entire pro-rata income their entire pro-rata shares, shares, whether distributed or not, whether distributed or not, of the of the net income of the association net income of the association or or corporation for such year. Any corporation for such year. Any amount so included in the gross in- amount so included in the gross income of a member shall be treated come of a member shall be treated as a dividend received. as a dividend received. Sec. 101. (19) Voluntary emSec. 101. (19) Voluntary employees beneficiary associations ployees' beneficiary associations proproviding for the payment of life, viding for the payment of life, sick, sick, accident, or other benefits to accident, or other benefits to the the members of such association or members of such association or their their dependents or their desig-dependents or their designated nated beneficiaries, if (A) admis- beneficiaries, if (A) admission to sion to membership in such associa- membership in such association is tion is limited to individuals who limited to individuals who are ofare officers or employees of the ficers or employees of the United United States Government, and States Government, and (B) no (B) no part of the net earnings of part of the net earnings of such assuch association inures (other than sociation inures (other than through through such payments) to the such payments) to the benefit of benefit of any private shareholder any private shareholder or indivior individual. Sec. 101, I. R. C., supra, amended by Sec. 217 (a), R. A. of 1939, by adding para dual. Sec. 101, I. R. C., supra, amended by Sec. 217 (a), R. A. of 1939, by adding para Taxable Years Beginning before 1939 Sec. 102. (a) Imposition of tax. -There shall be levied, collected, and paid for each taxable year (in addition to other taxes imposed by this chapter) upon the net income of every corporation (other than a personal holding company as defined in section 501 or a foreign personal holding company as defined in Supplement P) if such corporation, however created or organized, is formed or availed of for the purpose of preventing the imposition of the surtax upon its Sec. 102. (a) Imposition of tax. Sec. 102. (a) Imposition of tax. -There shall be levied, collected, -There shall be levied, collected, and paid for each taxable year (in and paid for each taxable year (in addition to other taxes imposed by addition to other taxes imposed by this chapter) upon the net income this chapter) upon the net income of every corporation (other than a of every corporation (other than a personal holding company as de- personal holding company as defined in section 501 or a foreign fined in section 501 or a foreign personal holding company as de- personal holding company as defined in Supplement P) if such fined in Supplement P) if such corporation, however created or or- corporation, however created or organized, is formed or availed of for ganized, is formed or availed of for the purpose of preventing the im- the purpose of preventing the imposition of the surtax upon its position of the surtax upon its shareholders or the shareholders of shareholders or the shareholders of shareholders or the shareholders of any other corporation, through the any other corporation, through the medium of permitting earnings or medium of permitting earnings or profits to accumulate instead of be-profits to accumulate instead of being divided or distributed, a surtax ing divided or distributed, a surtax equal to the sum of the following: equal to the sum of the following: any other corporation, through the medium of permitting earnings or profits to accumulate instead of being divided or distributed, a surtax equal to the sum of the following: 272 per centum of the amount of the undistributed section 102 net income not in excess of $100,000, plus 382 per centum of the undistributed section 102 net income in excess of $100,000. Sec. 102 (a), I. R. C., supra, amended by Sec. 103 (d), R. A. of 1941, to read as above. Sec. 118 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1940. For Sec. 102 (a), I. R. C., before amendment, see 1941 column. 272 per centum of the amount of the undistributed section 102 net income not in excess of $100,000, plus 25-272 per centum of the amount of the undistributed section 102 net income not in excess of $100,000, plus 382 per centum of the undis- 35 382 per centum of the undistributed section 102 net income intributed section 102 net income in excess of $100,000. excess of $100,000. Sec. 102 (a), I. R. C., supra, amended by Sec. 103 (d), R. A. of 1941, to read as above. Sec. 118 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1940. For Sec. 102 (a), I. R. C., before amendment, see 1941 column. Sec. 102. (b) Prima facie evi- Sec. 102. (b) Prima facie evidence. The fact that any corpo- dence.-The fact that any corporation is a mere holding or invest-ration is a mere holding or investment company shall be prima facie ment company shall be prima facie evidence of a purpose to avoid sur- evidence of a purpose to avoid surtax upon shareholders. tax upon shareholders. Sec. 102 (a), I. R. C., supra, amended by Sec. 103 (d), R. A. of 1941, by omitting figures in stricken through type and adding figures in italics. Sec. 118 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1940. Sec. 102. (b) Prima facie evidence. The fact that any corporation is a mere holding or investment company shall be prima facie evidence of a purpose to avoid surtax upon shareholders. Sec. 102. (c) Evidence deter- Sec. 102. (c) Evidence · deter- Sec. 102. (c) Evidence determinative of purpose.-The fact minâtive of purpose. The fact minative of purpose.-The fact that the earnings or profits of a that the earnings or profits of a that the earnings or profits of a corporation are permitted to ac- corporation are permitted to ac- corporation are permitted to accumulate beyond the reasonable cumulate beyond the reasonable cumulate beyond the reasonable needs of the business shall be deneeds of the business shall be determinative of the purpose to avoid terminative of the purpose to avoid surtax upon shareholders unless the surtax upon shareholders unless the corporation by the clear prepondercorporation by the clear preponderance of the evidence shall prove to ance of the evidence shall prove to the contrary. the contrary. Sec. 102. (d) Definitions.-As used in this chapter needs of the business shall be de- Sec. 102. (d) Definitions.-As Sec. 102. (d) Definitions.-As used in this chapter Taxable Years graph (19) supra. Sec. 217 (b) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1938. Sec. 102. Surtax on corporations improperly accumulating surplus. Taxable Years graph (19) supra. Sec. 217 Sec. 102. Surtax on corporations Sec. 102. (a) Imposition of tax. Sec. 102. (a) Imposition of tax. -There shall be levied, collected, -There shall be levied, collected, and paid for each taxable year (in and paid for each taxable year (in addition to other taxes imposed by addition to other taxes imposed by this chapter) upon the net income this chapter) upon the net income of every corporation (other than a of every corporation (other than a personal holding company as de- personal holding company as defined in section 501 or a foreign fined in section 501 or a foreign perpersonal holding company as de-sonal holding company as defined fined in Supplement P) if such in Supplement P) if such corporacorporation, however created or or- tion, however created or organized, ganized, is formed or availed of for the purpose of preventing the imposition of the surtax upon its shareholders or the shareholders of any other corporation, through the medium of permitting earnings or profits to accumulate instead of being divided or distributed, a surtax equal to the sum of the following: 25 per centum of the amount of the undistributed section 102 net income not in excess of $100,000, plus is formed or availed of for the pur- 25 per centum of the amount of 35 per centum of the undistrib- 35 per centum of the undistriuted section 102 net income in ex-buted section 102 net income in excess of $100,000. cess of $100,000. Taxable Years Sec. 102. Surtax on corporations improperly accumulating surplus. Sec. 102. (a) Imposition of tax. See p. 128, Eighth Edition. Sec. 102. (b) Prima facie evidence. The fact that any corporation is a mere holding or investment company shall be prima facie evidence of a purpose to avoid surtax upon shareholders. Sec. 102. (b) Prima facie evidence. The fact that any corporation is a mere holding or investment company shall be prima facie evidence of a purpose to avoid surtax upon shareholders. Sec. 102. (c) Evidence deter- Sec. 102. (c) Evidence determinative of purpose. The fact minative of purpose.-The fact that the earnings or profits of a that the earnings or profits of a corporation are permitted to ac- corporation are permitted to accumulate beyond the reasonable cumulate beyond the reasonable needs of the business shall be determinative of the purpose to avoid surtax upon shareholders unless the corporation by the clear preponderance of the evidence shall prove to the contrary. Sec. 102. (d) Definitions.-As used in this chapter needs of the business shall be de- Sec. 102. (d) Definitions.-As Sec. 102. (b) Prima facie evidence. See p. 130, Eighth Edition. Sec. 102. (c) Evidence determinative of purpose. See p. 130, Eighth Edition. Sec. 102. (d) Definitions. |