I review the corporate and tax records for specified shares and prepare a signed letter explaining what the evidence supports, what is missing, and which Section 1202 questions remain unresolved. At-issuance letters start at $3,500; the scope and flat fee are agreed before work begins.
Discuss your QSBS attestation — 20-minute call →
A note before you book: please share only the names of the parties and a brief, non-confidential description of your issue. Confidential details should wait until we’ve completed a conflicts check and signed a written engagement agreement.
Which QSBS service do you need?
- QSBS Issue-Spotting Review — start here if you need to identify qualification issues, missing records, and next steps before deciding whether to commission a letter.
- QSBS Attestation Letter — choose a one-time engagement when you need supporting records and signed analysis for specified shares and periods. Fees are below.
- Annual QSBS Review & Attestation (QSBS Sentinel) — choose ongoing work for a scheduled annual review, attestation letter, and planning call. Coverage and fees depend on the selected tier.
What does a QSBS attestation letter include?
The engagement identifies the issuer, shares, holders, periods, and questions covered. The letter does not establish eligibility by itself or guarantee an exclusion. A company-level letter does not automatically resolve every shareholder’s eligibility or available exclusion. Depending on the agreed scope, the substantiation file addresses:
- Issuer eligibility (domestic C-corp; gross-assets analysis under §1202(d)(1) — the pre-issuance historical lookback for the issuer and its predecessors, plus the immediately-after-issuance test including the issuance proceeds)
- Original issuance (money, property, or services — properly characterized)
- Active business requirement (80% test) with substantiation across the holding period
- Qualified trade or business analysis — including the hybrid software-plus-services question (consulting, implementation, or custom engineering sold alongside the product), where characterization drives the outcome
- Redemption and recapitalization analysis
- Holding periods based on acquisition date, including applicable tacking: more than five years for stock acquired on or before July 4, 2025; the new 3/4/5-year tiers apply to later acquisitions. Separately, the $75 million gross-assets threshold applies to stock issued after July 4, 2025, with indexing after 2026.
- Documentary record: cap table, board consents, financials, and Form 8949 alignment
You receive the signed letter and supporting analysis for your tax preparer and for use in diligence or an examination, within the engagement’s agreed scope.
When do you need a QSBS attestation letter?
| Situation | What I deliver |
|---|---|
| At issuance | Documents original issuance and the relevant facts available as of the letter’s date. It cannot establish future active-business compliance or the shareholder’s eventual exclusion; update the analysis as the holding period and relevant events develop. |
| Annual refresh | Reviews active-business compliance during the period covered, material events, and changes since the previous review, identifying supporting records and any gaps. For a recurring engagement, see Annual QSBS Review & Attestation (QSBS Sentinel). |
| Pre-sale / pre-rollover | Full-holding-period letter covering issuance through sale date — the record you want complete before the sale closes |
| Retroactive | Reconstruction letter when documentation is scattered or the company is gone |
| Trust / gifting | Letter analyzing whether the §1202 cap survives stacking |
How much does a QSBS attestation letter cost?
Flat fees are quoted after the intake call. The engagement agreement defines the covered shares, periods, deliverables, and fee. Additional holders, reconstruction, or work outside the agreed scope may require a separate quote. The published tiers are:
- At-issuance letter — from $3,500. For a company issuing stock. Documents original issuance and the relevant facts available at the letter’s date. Future active-business compliance and the shareholder’s eventual exclusion require later review.
- Standard reasoned attestation letter — $7,500. For a company seeking a review of existing records as of a specified date. Includes the gross-assets analysis, active-business requirement, qualified trade or business, and potential disqualifying events, with tax counsel’s analysis.
- Retroactive reconstruction — from $10,000. For shareholders or companies with scattered or incomplete records, including a company that has been sold or wound down. Reconstructs the available evidence and identifies gaps that remain.
- Pre-exit comprehensive substantiation — from $15,000. For a company approaching a sale without a complete QSBS substantiation file. Includes a full-file review and reasoned analysis of the holding period covered by the engagement, with unresolved issues identified before closing.
Base pricing assumes up to 25 record holders. Larger cap tables: 26–50 holders +$1,500, 51–100 holders +$3,500, 101+ by quote. For founders, key executives, or major investors who want a holder-level letter confirming their own §1202 facts, I add per-shareholder companion letters at $500 each — most companies only need these for the people with the most at stake.
For a checklist of events that may call for updated analysis, see the QSBS eligibility checklist.
Why founders and investors hire me for this
- 25+ years on §1202. I co-authored Angel Investing: Start to Finish (Holloway) and chair the Angel Capital Association's Legal Advisory Committee.
- LL.M. in Taxation (NYU). My work combines federal tax analysis with review of corporate records, stock issuances, equity compensation, and transaction documents.
- Read the analysis. These guides explain the issues reviewed in an attestation engagement: what the letter needs to say, the active business test after 5 years.
Process
- 20-minute intro call. We discuss your situation, the records available, and the appropriate scope and flat fee.
- Document request. Cap table, charter, financials at issuance and annually, board consents, any prior tax positions.
- Draft and timing. Typical draft timing is 2–3 weeks after the required records are available. Timing and any rush request are confirmed when we agree the scope; reconstruction or missing records may require more time.
- Final letter + supporting memo. Yours to hand to your tax preparer, auditors, or the IRS.
Discuss your QSBS attestation — 20-minute call →
FAQ
Is an attestation letter legally required?
No. §1202 itself doesn't require one. But if the exclusion is examined, the IRS will ask for substantiation — and the time to build the record is before it asks, not after. (Full analysis here.)
How much does a QSBS attestation letter cost?
At-issuance letters start at $3,500; standard reasoned letters are $7,500; retroactive reconstruction starts at $10,000; and comprehensive pre-exit work starts at $15,000. Additional holders, complexity, or work outside the agreed scope can increase the fee. The intake call determines the quote. (See pricing detail above.)
Can my CPA write it?
Yes. A CPA with relevant Section 1202 experience can prepare factual substantiation and written federal tax analysis. My service combines that tax analysis with review of corporate records, stock issuances, equity compensation, and transaction documents. The right adviser depends on the issues involved and the adviser’s qualifications and experience.
What if the company has been sold or wound down?
I review the available records and assess whether a reconstruction is feasible. A retroactive letter identifies the facts that can be supported and the evidence gaps that remain; it cannot replace unavailable evidence.
Do you work with companies outside Washington?
Yes. §1202 is federal. I write letters for companies and shareholders nationwide.
What is the letter, exactly? The letter includes my analysis as tax counsel, but the real product is the substantiation — the documented factual record that supports your exclusion if it’s ever examined. It’s not a guarantee of tax outcome, and where a §1202 question is genuinely unsettled, the letter says so and explains the risk.
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