Which of the following statements regarding the accumulated earnings tax is true?
A) The accumulated earnings tax is imposed instead of the regular corporate income tax.
B) The accumulated earnings tax is intended to coerce corporations to pay dividends.
C) The accumulated earnings tax is calculated by the corporation and paid on its annual corporate income tax return.
D) All of these choices statements are true.

Question

Quizplus · Accepted Answer

The accumulated earnings tax is intended to discourage corporations from hoarding retained earnings instead of paying dividends, by imposing an additional tax on accumulated earnings beyond a certain limit. It is not imposed instead of the regular corporate income tax, and it is not calculated separately on the annual corporate income tax return.

Which of the Following Statements Regarding the Accumulated Earnings Tax