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the business does so with the purpose of avoiding income tax with
respect to its shareholders.
The presumption can be rebutted by a preponderance of
evidence to the contrary. Sec. 533(a); Snow Manufacturing Co. v.
Commissioner, supra at 269. Therefore, the accumulated earnings
tax does not apply if a corporation has allowed an unreasonable
accumulation but lacks the proscribed purpose or intent.
Technalysis Corp. v. Commissioner, supra at 403; Pelton Steel
Casting Co. v. Commissioner, 28 T.C. 153, 173 (1957), affd. 251
F.2d 278 (7th Cir. 1958). However, it has been recognized that
without the presumption provided in section 533(a), the
accumulated earnings tax would largely, as a practical matter, be
unenforceable. Ivan Allen Co. v. United States, supra at 628.
Section 1.533-1(a)(2), Income Tax Regs., sets forth factors
to be considered in determining whether a corporation had the
proscribed purpose. Some of the relevant factors are: (1)
Dealings between the corporation and its shareholders for the
personal benefit of the shareholders; for example, personal
loans; (2) corporate investment of undistributed assets in
unrelated businesses or investments; and (3) the corporation's
dividend history.
Section 535(a) defines "accumulated taxable income" (the
recomputed taxable income of the corporation against which tax
under section 531 is imposed) as the taxable income of the
corporation, as adjusted in section 535(b), less the dividend-
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