Thomas Nichols Testifies before Congressional Subcommittee
Attorney Thomas Nichols testified in front of Congress for the Subcommittee on Select Revenue Measures of the Committee on Ways and Means of the United States House of Representatives on Tax Reform. The Hearing was focused on Tax Reform and Closely-Held Business. The specific topic for this Hearing was the Small Business and Pass-Through Entity Tax Reform Discussion Draft that was issued by the Ways and Means Committee of the U.S. House of Representatives earlier this year.
The Discussion Draft contains provisions to eliminate the arbitrary 100 shareholder limit for S corporations and to allow any privately-held corporation to elect such status. Other provisions would allow non-resident aliens to become shareholders of S corporations, and the Committee appeared genuinely receptive to Attorney Nichols' suggestion that other corporations and partnerships should also be allowed to invest in S corporations, even if they would have to pay tax at the top corporate rate in order to do so. The above-described eligibility-expansion provisions would increase the availability and flexibility of S corporation status, and also very importantly, facilitate S corporations’ ability to procure capital from persons other than resident individuals, trusts and estates.
Although Tax Reform faces a number of obstacles in today’s climate, Attorney Nichols was encouraged by what appeared to be very genuine interest on both sides of the aisle for improving our tax system, and doing so in a deliberate transparent way.
The information contained herein is not intended as and should not be construed as legal advice. Please consult with legal counsel before taking any action based on this information.
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