Exclusion for Gain from Qualified Small Business Stock

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Stop Billionaires from Dodging Startup Taxes

AKA “Small Business Stock Exclusion Reform”


Which agency/agencies promulgated the regulation? *
Internal Revenue Service (IRS)
Which title, parts, and/or sections of the Code of Federal Regulations (C.F.R.) should be rescinded? *
26 CFR Part 1.1202-1 and related provisions including §1.1045-1 where used to defer or stack QSBS benefits in excess of original legislative intent
What is your name?
—OPTIONAL--
Is your proposed rescission a notice of proposed rulemaking, final rule, direct final rule, interim final rule, or interpretive rule? *
Notice of Proposed Rulemaking
What is the name of the regulation being rescinded, if applicable? *
Exclusion for Gain from Qualified Small Business Stock
Please provide a short summary of the justifications for the rescission. *
Streamlining tax benefits by rescinding exclusions disproportionately used by ultra-high-net-worth individuals for preferential equity strategies unrelated to genuine small business development.
Please insert the address of the agency. [NPRM, DFR, and IFR only]
Department of the Treasury Internal Revenue Service 1111 Constitution Avenue, NW Washington, D.C. 20224
Please insert the contact information for the agency. *
public_liaison@irs.gov
What is the background for the regulation being rescinded? *
Originally intended to encourage small business growth, the provision has become a tax shelter for private equity investors and venture capital strategies with minimal public return.
Explain the reasons for the rescission. *
Eliminating this special exclusion would simplify tax treatment of gains and promote a more equitable and straightforward tax system.
Describe the text of the relevant C.F.R. provisions as it will exist after the rescission. *
Qualified small business stock exclusions will be removed, and gains will be treated uniformly under standard capital gains provisions.
Please insert the name of the current agency head. *
Michael Faulkender
Please insert the title of the agency head. *
Acting Commissioner of Internal Revenue

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