### Question
Can you define what deficiency dividends means?


### Answer
**Deficiency dividends** is defined as the following in *26 U.S.C. § 547*:

> the amount of the dividends paid by the corporation on or after the date of the determination and before filing claim under subsection (e), which would have been includible in the computation of the deduction for dividends paid under section 561 for the taxable year with respect to which the liability for personal holding company tax exists, if distributed during such taxable year

#### Citation:
  - *26 U.S.C. § 547*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter G-Corporations Used to Avoid Income Tax on Shareholders > PART II-PERSONAL HOLDING COMPANIES**

