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paid deduction (as defined in section 561) and the accumulated
earnings credit (as defined in section 535(c)). Insofar as
relevant to the instant cases, this accumulated earnings credit
is the amount of the corporation's earnings and profits that are
retained for the reasonable needs of the business. Where a
taxpayer can show that all its current earnings were accumulated
for the reasonable needs of the business, there is no accumulated
earnings tax since the accumulated earnings credit eliminates the
amount against which the tax is imposed. E.g., Magic Mart, Inc.
v. Commissioner, 51 T.C. 775, 799 (1969); Faber Cement Block Co.
v. Commissioner, 50 T.C. 317, 336 (1968); John P. Scripps
Newspapers v. Commissioner, 44 T.C. 453, 474 (1965).
Whether a taxpayer's accumulation of earnings and profits is
in excess of its reasonable business needs is a factual question.
Helvering v. National Grocery Co., 304 U.S. 282 (1938). The
"reasonable needs of the business" includes the reasonably
anticipated needs of the business. Sec. 537(a)(1); sec. 1.537-
1(a), Income Tax Regs.
With respect to a corporation's reasonably anticipated
future business needs, section 1.537-1(b), Income Tax Regs,
provides:
(b) Reasonably anticipated needs. (1) In order for
a corporation to justify an accumulation of earnings
and profits for reasonably anticipated future needs,
there must be an indication that the future needs of
the business require such accumulation, and the
corporation must have specific, definite, and feasible
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