Taking on a fledgling trade group, the American Bankers Association has begun offering a free service for subchapter S corporation banks.
The ABA's registry is open to member banks that have elected or are considering subchapter S status, a tax classification open to banks with fewer than 75 shareholders. An S corporation election, which was open to banks for the first time last year, allows banks to avoid federal income taxes by passing earnings directly to shareholders.
As members of the ABA's registry, banks get a periodic newsletter, legislative updates, peer-group advisory programs, and access to the S corporation portion of the ABA's Web site.
"We're filling this need for our members," said Mark A. Baran, senior tax counsel for the ABA. "We are in the best position to offer up-to-date information on this issue."
A competing S corporation bank trade association, the Subchapter S Bank Association, has been started by Kennedy, Baris & Lundy, a San Antonio law firm that lobbied to win S corporation status for banks.
Patrick J. Kennedy Jr., the partner heading up the 60-member group, said something separate from the ABA is needed to address S corporation issues.
"The big trade groups do a good job, but they have too many issues to deal with," he said. "Our organization won't be distracted."