26 USC 269A - Personal service corporations formed or availed of to avoid or evade income tax

U.S Code last checked for updates: May 01, 2024

§ 269A.

Personal service corporations formed or availed of to avoid or evade income tax

(a)

General rule

If—

(1)

substantially all of the services of a personal service corporation are performed for (or on behalf of) 1 other corporation, partnership, or other entity, and

(2)

the principal purpose for forming, or availing of, such personal service corporation is the avoidance or evasion of Federal income tax by reducing the income of, or securing the benefit of any expense, deduction, credit, exclusion, or other allowance for, any employee-owner which would not otherwise be available,

then the Secretary may allocate all income, deductions, credits, exclusions, and other allowances between such personal service corporation and its employee-owners, if such allocation is necessary to prevent avoidance or evasion of Federal income tax or clearly to reflect the income of the personal service corporation or any of its employee-owners.

(b)

Definitions

For purposes of this section—

(1)

Personal service corporation

(2)

Employee-owner

(3)

Related persons

(Added Pub. L. 97–248, title II, § 250(a), Sept. 3, 1982, 96 Stat. 528; amended Pub. L. 99–514, title XIII, § 1301(j)(4), Oct. 22, 1986, 100 Stat. 2657.)

cite as: 26 USC 269A