ICBA Lauds Sub S Reform as Economic Booster

WASHINGTON-The Independent Community Bankers of America expressed its strong support for Subchapter S Corporation expansion at a recent congressional hearing, stating that it will aid small businesses and boost the economy. Included among those small businesses helped by the legislation are community banks, which are hoping to expand the definition of stockholders for the purpose of Sub S to include IRAs and count family members as one shareholder; reform the treatment of bank director shares; and increase the number of shareholders from 75 to 150. “Community banks serve as the key source of credit and other financial services to small business-the most prolific job-creating sector of our economy,” ICBA Chairman C.R. “Rusty” Cloutier, the president and CEO of MidSouth Bank in Lafayette, La., told a House Ways and Means subcommittee recently. “Allowing community banks to operate more efficiently as Subchapter S entities improves their viability and helps prevent the destructive double taxation of income-a key goal of sound tax and economic policy.” Cloutier claimed that complex tax rules are preventing many community banks from converting to Sub S corporations, which Congress intended for them to do when it created them in 1996. -