Amend tax code so Reg A/CF shareholders do not blow S-corp 100-shareholder limit
Mandate asks Congress to amend the IRC so crowdfunding and Regulation A shareholders are disregarded for the Subchapter S 100-shareholder limit.
Mandate
Mandate Ch. 27 (Financial Regulatory Agencies) — Entrepreneurial Capital Formation: Congress should amend the Internal Revenue Code to disregard crowdfunding and Regulation A shareholders for purposes of the 100-shareholder limit for Subchapter S corporations.
Undo plan
1) If enacted, cabin disregarded-shareholder treatment to true crowdfunding/Reg A rounds with transfer restrictions.
2) Prevent use as loophole to run de facto public S-corps without C-corp disclosures.
3) Coordinate IRS/SEC definitions of qualifying offerings.
4) Prefer encouraging C-corp venture structures with QSBS rather than distorting S-corp limits.
5) Verify: S-corp election stats post-change; IRS abuse cases.