Act of 1917. Act of 1916. Credits allowed beneficiaries. Sec. 7, as amended by the Act of 1917, p. 117. Credits allowed beneficiaries. Sec. 7. (a), p. 117. Act of 1913. Act of 1924. plan for the exclusive benefit of some or all of his employees, to which contributions are made by such employer, or employees, or both, for the purpose of distributing to such employees the earnings and principal of the fund accumulated by the trust in accordance with such plan, shall not be taxable under this section, but the amount actually distributed or made available to any distributee shall be taxable to him in the year in which so distributed or made available to the extent that it exceeds the amounts paid in by him. Such distributees shall for the purpose of the normal tax be allowed as credits such part of the amount so distributed or made available as represents the items specified in subdivisions (a) and (b) of section 216.173 SEC. 219. (g) Where the grantor of a trust has, at any time during the taxable year, either alone or in conjunction with any person not a beneficiary of the trust, the power to revest in himself title to any part of the corpus of the trust, then the income of such part of the trust for such taxable year shall be included in computing the net income of the grantor. SEC. 219. (h) Where any part of the income of a trust may, in the discretion of the grantor of the trust, either alone or in conjunction with any person not a beneficiary of the trust, be distributed to the grantor or be held or accumulated for future distribution to him, or where any part of the income of a trust is or may be applied to the payment of premiums upon policies of insurance on the life of the grantor (except policies of insurance irrevocably payable for the purposes and in the manner specified in paragraph (10) of subdivision (a) of section 214), such part of the income of the trust shall be included in computing the net income of the grantor. 174 174 Sec. 214 (a) (10), p. 100. Act of 1921. plan for the exclusive benefit of some or all of his employees, to which contributions are made by such employer, or employees, or both, for the purpose of distributing to such employees the earnings and principal of the fund accumulated by the trust in accordance with such plan, shall not be taxable under this section, but the amount actually distributed or made available to any distributee shall be taxable to him in the year in which so distributed or made available to the extent that it exceeds the amounts paid in by him. Such distributees shall for the purpose of the normal tax be allowed as credits that part of the amount so distributed or made available as represents the items specified in subdivisions (a) and (b) of section 216.17 173 Act of 1918. Act of 1924. EVASION OF SURTAXES BY IN CORPORATION. SEC. 220. (a) If any corporation, however created or organized, is formed or availed of for the purpose of preventing the imposition of the surtax upon its shareholders through the medium of permitting its gains and profits to accumulate instead of being divided or distributed, there shall be levied, collected, and paid for each taxable year upon the net income of such corporation a tax equal to 50 per centum of the amount thereof, which shall be in addition to the tax imposed by section 230175 of this title and shall (except as provided in subdivision (d) of this section) be computed, collected, and paid upon the same basis and in the same manner and subject to the same provisions of law, including penalties, as that tax. SEC. 220. That if any corporaSEC. 220. That if any corporation, however created or organ- tion, however created or organized, is formed or availed of for ized, is formed or availed of for the purpose of preventing the the purpose of preventing the imposition of the surtax upon its imposition of the surtax upon stockholders or members through its stockholders or members the medium of permitting its through the medium of permitgains and profits to accumulate ting its gains and profits to instead of being divided or dis- accumulate instead of being ditributed, there shall be levied, vided or distributed, such corcollected, and paid for each tax-poration shall not be subject to able year upon the net income of the tax imposed by section such corporation a tax equal to 230,175 but the stockholders or 25 per centum of the amount members thereof shall be subject thereof, which shall be in addi- to taxation under this title in the tion to the tax imposed by sec- same manner as provided in subtion 230175 of this title and shall division (e) of section 218176 in be computed, collected, and paid the case of stockholders of a perupon the same basis and in the sonal service corporation, except same manner and subject to the that the tax imposed by Title III same provisions of law, includ- shall be deducted from the net ing penalties, as that tax: Pro- income of the corporation before vided, That if all the stockhold- the computation of the proporers or members of such corpora- tionate share of each stockholder tion agree thereto, the Commis- or member. The fact that any sioner may, in lieu of all income, corporation is a mere holding war-profits and excess-profits company, or that the gains and taxes imposed upon the corpora- profits are permitted to accumution for the taxable year, tax the late beyond the reasonable needs stockholders or members of such of the business, shall be prima corporation upon their distrib- facie evidence of a purpose to utive shares in the net income of escape the surtax; but the fact the corporation for the taxable that the gains and profits are in SEC. 220. (c) When requested year in the same manner as pro-late and become surplus shall any case permitted to accumuby the Commissioner, or any col- vided in subdivision (a) of secnot be construed as evidence of lector, every corporation shall tion 218177 in the case of memforward to him a correct state-bers of a partnership. The fact such case unless the Commisa purpose to escape the tax in ment of such gains and profits that any corporation is a mere sioner certifies that in his and the names and addresses of holding company, or that the opinion such accumulation is unthe individuals or shareholders gains and profits are permitted reasonable for the purposes of who would be entitled to the to accumulate beyond the reason- the business. When requested by same if divided or distributed, able needs of the business, shall the Commissioner, or any coland of the amounts that would be prima facie evidence of a pur- lector, every corporation shall be payable to each. pose to escape the surtax; but forward to him a correct statethe fact that the gains and prof- ment of such gains and profits its are in any case permitted to and the names and addresses of accumulate and become surplus the individuals or shareholders shall not be construed as evi- who would be entitled to the dence of a purpose to escape the same if divided or distributed, tax in such case unless the Com- and of the amounts that would missioner certifies that in his be payable to each. opinion such accumulation is unreasonable for the purposes of SEC. 220. (b) The fact that any corporation is a mere holding or investment company, or that the gains or profits are permitted to accumulate beyond the reasonable needs of the business, shall be prima facie evidence of a purpose to escape the surtax. SEC. 220. (d) As used in this section the term "net income" means the net income as defined in section 232,178 increased by the sum of the amount of the deduction allowed under paragraph (6) of subdivision (a) of section 234,179 and the amount of the interest on obligations of 175 Sec. 230, p. 176. 177 Sec. 218 (a), p. 128. Act of 1917. ADDITIONAL TAX INCLUDES UN- Act of 1916. ADDITIONAL TAX INCLUDES UN- Act of 1913. SEC. 3. For the purpose of the SEC. 3. For the purpose of the A. Subdiv. 2. [3] For the puradditional tax, the taxable in- additional tax, the taxable in- pose of this additional tax the come of any individual shall in- come of any individual shall in- taxable income of any individclude the share to which he clude the share to which he ual shall embrace the share to would be entitled of the gains would be entitled of the gains which he would be entitled of and profits, if divided or dis- and profits, if divided or distrib- the gains and profits, if divided tributed whether divided or uted, whether divided or distrib- or distributed, whether divided. distributed or not, of all corpora- uted or not, of all corporations, or distributed or not, of all cortions, joint-stock companies or joint-stock companies or associa-porations, joint-stock companies, associations, or insurance com- tions, or insurance companies, or associations however created panies, however created or or- however created or organized, or organized, formed or frauduganized, formed or fraudulently formed or fraudulently availed lently availed of for the purpose availed of for the purpose of for the purpose of prevent- of preventing the imposition of of preventing the imposition of ing the imposition of such tax such tax through the medium of such tax through the medium of through the medium of permit- permitting such gains and profpermitting such gains and profits ting such gains and profits to its to accumulate instead of to accumulate instead of being accumulate instead of being being divided or distributed; divided or distributed; and the divided or distributed; and the and the fact that any such corfact that any such corporation, fact that any such corporation, poration, joint-stock company, joint-stock company or associa- joint-stock company or associa- or association, is a mere holding tion, or insurance company, is a tion, or insurance company, is company, or that the gains and mere holding company, or that a mere holding company, or that profits are permitted to accumuthe gains and profits are per- the gains and profits are per- late beyond the reasonable mitted to accumulate beyond the mitted to accumulate beyond the needs of the business shall be reasonable needs of the business reasonable needs of the busi- prima facie evidence of a fraudness, shall be prima facie evi-ulent purpose to escape such dence of a fraudulent purpose tax; but the fact that the gains to escape such tax; but the fact and profits are in any case that the gains and profits are permitted to accumulate and bein any case permitted to accumulate and become surplus shall not be construed as evidence of a purpose to escape the said tax in such case unless the Secretary of the Treasury shall certify that in his opinion such shall be prima facie evidence of a fraudulent purpose to escape such tax; but the fact that the gains and profits are in any case permitted to accumulate and become surplus shall not be construed as evidence of a purpose to escape the said tax in such case unless the Secretary of the Treasury shall certify that in his opinion such accumulation is unreasonable for the purposes of accumulation is unreasonable the business. When requested for the purposes of the business. come surplus shall not be construed as evidence of a purpose to escape the said tax in such case unless the Secretary of the Treasury shall certify that in his opinion such accumulation is unreasonable for the purposes of by the Commissioner of Internal the business. When requested by sioner of Internal Revenue, or lector of internal revenue, such 178 Sec. 232, p. 188. ΙΟ 179 Sec. 234 (a) (6), p. 198. |