¹See Sec. 1361(b) and (c)(6).

²Rev. Proc. 2004-14, IRB 2004-7, 489.

³Rev. Proc. 2003-23, IRB 2003-11, 599, modified and superseded by Rev. Proc. 2004-14, note 2 supra.

⁴TD 9081 (7/18/03).

⁵These terms are discussed below, under Definitions.

⁶Many SESOPs previously grandfathered from these rules will be subject to them beginning in 2005.

⁷If a shareholder or the S corporation is close to meeting the 10%, 20% or 50% tests, the retirement of rank-and-file employees and the redemption of their stock could make a taxpayer a disqualified person.

⁸Rev. Rul. 2004-4, IRB 2004-6, 414.

⁹For a discussion, see Mendelson, Emilian and Bhikha, Tax Shelter Final Regs., 34 The Tax Adviser 142 (March 2003).

¹⁰Notice 2004-30, IRB 2004-17, 828.

¹¹IR 2004-44 (4/1/04).