Incentive for the corporation to accumulate income


In the past, the differential between the corporate and individual maximums rates combined with the effect of double taxation on corporate distributions, sometimes acted as an incentive for the corporation to accumulate income. What weapons does the Internal Revenue Code provide to combat this abuse?

A. IRC Section 531, Accumulated Earnings Tax

B. IRC Section 541, Personal Holding Company Tax

C. Both of the above.

D. None of the Above.

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Accounting Basics: Incentive for the corporation to accumulate income
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