Yesterday, the IRS released a set of proposed regulations to clarify S corporation family shareholder rules as well as definitions of “powers of appointment” and “potential current beneficiaries” of ESBTs. Changes were also made to Treasury regulations in accordance with the Small Business Job Protection Act of 1996.
The IRS is encouraging public comments on these changes, which must be submitted to the IRS for review by Dec. 27, 2007. A hearing to discuss the proposed regulations is currently scheduled for Jan. 16, 2008 at 10:00am. Comments, along with outlines of topics to be discussed, may be submitted electronically to the IRS at http://www.regulations.gov. As always, we will be sure to keep you informed of any further developments.