During a Recent IRS Audit, the Revenue Agent Decided That

question 33

Essay

During a recent IRS audit, the revenue agent decided that the Emig family used their closely held corporation, Gamekeeper, to avoid shareholder tax by accumulating earnings beyond the reasonable needs of the business. Gamekeeper's taxable income was $800,000, it paid no dividends, and it had no business need to retain any income. Compute Gamekeeper's accumulated earnings tax assuming that it had accumulated $2 million of after-tax income in prior years.

---

Definitions:

System.out

In Java, a class field that represents the standard output stream, typically the console, used for printing output.

System.exit

A process in Java that concludes the operation of the current Java virtual machine by starting its shutdown process.