Latest News

S Corporation Modernization Act of 2016 Introduced

Jul 14, 2016

John Thune (R-S.D.) and Ben Cardin (D-Md.), members of the tax-writing Senate Finance Committee, introduced the S Corporation Modernization Act of 2016 (S. 3181), legislation that would make several pro-growth reforms to help S corporations operate more easily, which would improve their ability to raise capital. S corporations were created in 1958, must be domestically owned, and are limited to 100 shareholders. This type of business has grown in popularity, particularly among small businesses, because of its simplicity and flexibility. S corporations are the most common form of business structure in America, with more than 4 million in existence today. Despite their popularity, relatively few reforms have been made to S corporations since their creation, which is why the Thune-Cardin bill would help modernize this part of the tax code.    Read more

The Sub S Bank Report Volume 19, Issue 2

Jul 12, 2016

The Sub S Bank Report Volume 19, Issue 2 is now available to read. Learn more about: Shareholder Succession: Family Stock Distributions & Expanding the 100 Shareholder Limit; SR 15-15 Update; Subchapter S Bank Association Legislative Efforts; Preliminary Report of C Corp vs. S Corp Bank Contribution to the US Treasury; Federal Reserve Regulatory Service Bulletin 4-185.5-The 25 Year Limitation for Shareholder Agreements; New Market Tax Credit Opportunities; Legislative Round Up and the 19th Annual Subchapter S Bank Association Conference agenda.  To read it, log in with your membership information. If you need assistance resetting your log in information or did not receive the email copy to your inbox email Amy Trevino at atrevino@kslawllp.com.   Read more

ABA Supports Proposed Subchapter S, LLC Tax Bills

May 31, 2016

ABA last week submitted a statement for the record expressing support for two bills introduced by Rep. Kenny Marchant (R-Texas) that would provide banks more flexibility under the Internal Revenue Code. The Capital Access for Small Business Banks Act (H.R. 2798) would help facilitate the additional raising of bank capital by expanding both the number of potential shareholders and the types of stock that can be issued by banks currently operating under Subchapter S of the IRC. The Community Bank Flexibility Act (H.R. 3287) would allow an institution organized as limited liability companies to be treated as a bank under Section 581 of the IRC for tax purposes, allowing it to achieve tax efficiencies by having the income of the corporation taxed only once at the shareholder level. “Rep. Marchant’s legislation will provide additional important tax efficient alternatives for banks to raise capital,” ABA said. “The ABA supports these two changes to the IRC that will help promote strong banks, encourage growth and stronger, more economically vibrant communities.”  Read more

Testimony Submitted by the Independent Bankers Association of Texas

May 17, 2016

To The Committee on Ways and Means In Support of H.R. 2789 and H.R. 3287 May 12, 2016 The Independent Bankers Association of Texas (IBAT) appreciates the opportunity to express our strong support for two bills being considered that will provide community banks an opportunity to remain independent, serve their customers and foster economic development. Over 2000 community banks have organized as Subchapter S entities, which has provided a number of benefits to both these banks and the customers they serve. With those benefits come some disadvantages as well, especially in the area of capital formation. As you are aware, bank capital provides the “skin in the game” that allows banks to acquire funding through deposits and other means, and deploy those resources in the form of loans to their local communities. Community banks make a disproportionately high level of small business and agriculture loans vis-à-vis their larger competitors. According to an FDIC study, community banks in 2011 held 14 percent of banking industry assets, but 46 percent of the industry’s small loans to farms and businesses. As small businesses are the source of a majority of new jobs in this country, initiatives to ensure the ongoing viability of community banks should be encouraged as a matter of public policy.    Read more