26 U.S.C. § 534
Burden of proof
# (a) General rule
In any proceeding before the Tax Court involving a notice of deficiency based in whole or in part on the allegation that all or any part of the earnings and profits have been permitted to accumulate beyond the reasonable needs of the business, the burden of proof with respect to such allegation shall— (1) if notification has not been sent in accordance with subsection (b), be on the Secretary, or (2) if the taxpayer has submitted the statement described in subsection (c), be on the Secretary with respect to the grounds set forth in such statement in accordance with the provisions of such subsection.
# (b) Notification by Secretary
Before mailing the notice of deficiency referred to in subsection (a), the Secretary may send by certified mail or registered mail a notification informing the taxpayer that the proposed notice of deficiency includes an amount with respect to the accumulated earnings tax imposed by section 531.
# (c) Statement by taxpayer
Within such time (but not less than 30 days) after the mailing of the notification described in subsection (b) as the Secretary may prescribe by regulations, the taxpayer may submit a statement of the grounds (together with facts sufficient to show the basis thereof) on which the taxpayer relies to establish that all or any part of the earnings and profits have not been permitted to accumulate beyond the reasonable needs of the business.
# (d) Jeopardy assessment
If pursuant to section 6861(a) a jeopardy assessment is made before the mailing of the notice of deficiency referred to in subsection (a), for purposes of this section such notice of deficiency shall, to the extent that it informs the taxpayer that such deficiency includes the accumulated earnings tax imposed by section 531, constitute the notification described in subsection (b), and in that event the statement described in subsection (c) may be included in the taxpayer’s petition to the Tax Court.
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Cited by 5
- 26 CFR § 1.1502-43 — Consolidated accumulated earnings tax.
- 26 CFR § 1.533-1 — Evidence of purpose to avoid income tax.
- 26 CFR § 1.534-1 — Burden of proof as to unreasonable accumulations generally.
- 26 CFR § 1.534-2 — Burden of proof as to unreasonable accumulations in cases before the Tax Court.
- 26 CFR § 1.534-3 — Jeopardy assessments in Tax Court cases.
Nearby sections (25 sections)
- 521 · Exemption of farmers’ cooperatives from tax
- 522 · Repealed. Pub. L. 87–834, § 17(b)(2), Oct. 16, 1962, 76 Stat. 1051
- 526 · Shipowners’ protection and indemnity associations
- 527 · Political organizations
- 528 · Certain homeowners associations
- 529 · Qualified tuition programs
- 529A · Qualified ABLE programs
- 530 · Coverdell education savings accounts
- 530A · Trump accounts
- 531 · Imposition of accumulated earnings tax
- 532 · Corporations subject to accumulated earnings tax
- 533 · Evidence of purpose to avoid income tax
- 534 · Burden of proof
- 535 · Accumulated taxable income
- 536 · Income not placed on annual basis
- 537 · Reasonable needs of the business
- 541 · Imposition of personal holding company tax
- 542 · Definition of personal holding company
- 543 · Personal holding company income
- 544 · Rules for determining stock ownership
- 545 · Undistributed personal holding company income
- 546 · Income not placed on annual basis
- 547 · Deduction for deficiency dividends
- 551 · Repealed. Pub. L. 108–357, title IV, § 413(a)(1), Oct. 22, 2004,…
- 561 · Definition of deduction for dividends paid