For Washington founders who want their §1202 exclusion documented, defended, and ready at exit.
A productized annual practice from a Washington startup attorney. One fixed fee. One attestation letter per year. One planning call. No surprises at closing.
Request engagement → — five tiers from $2,000/yr (individual) to enterprise (200+ shareholders). You pick the month each year. We do the rest.
This is a legal engagement, not a SaaS subscription. After you request engagement, we run conflicts and send an engagement letter. Payment follows.
The problem
Most founders discover their QSBS exposure six weeks before closing — when the buyer's diligence team asks for five years of documentation that doesn't exist.
By then, your options are: scramble to reconstruct it, accept a haircut on the purchase price, or watch the §1202 exclusion evaporate on the gain that was supposed to be tax-free.
There is a better way: run the practice every year, capture the documentation while it's easy, and arrive at exit with a stack of dated attestation letters that close the diligence question in an afternoon.
That is what this service does.
How it works
- You request engagement. Fill in the name of your company (or your individual name, if hiring us as an individual) and email us the pertinent details — entity type, formation date, rough cap table, and what you want covered.
- We run conflicts. Standard firm conflict check before any work begins.
- We send an engagement letter. A standard engagement letter scoped to QSBS Sentinel™ for your chosen tier, including your preferred attestation month.
- You sign and pay. Engagement letter signed; annual fee paid through our firm's secure payment system.
- Annual intake. Three weeks before your chosen month each year, you get a short questionnaire (financials, cap table changes, business activity).
- We run the analysis. Active business test, holding period, eligibility tests, anything new that could affect §1202 treatment.
- You get a signed attestation letter. Dated, on letterhead, ready to hand to a buyer or examiner.
- You get a planning call. Cover anything you want — planning questions, upcoming events, exit timing. Call length scales with your tier.
- We do it again next year. Same month, every year, automatically. The discipline is the product.
Pick your timing
When you subscribe, you choose the month each year you want the attestation done. Two common patterns:
- Align with your fiscal year-end — the analysis lines up with your books, your accountant, and any year-end planning conversations
- Pick a quiet month — Q1 or late summer, when your team has bandwidth and you're not buried in close
The point is not which month. The point is the same month every year. The discipline is the product.
Pricing tiers
The right tier depends on how many QSBS-holding shareholders you need covered.
Individual — $2,000 / year
For founders, employees, and early investors who hold QSBS in a single company. One shareholder.
- Annual §1202 eligibility attestation letter for your position
- Annual 30-minute planning call
- Email check-in if anything material changes during the year
- Includes one holding-period and active-business review
Best for: solo founders, employees with significant equity, angel investors with one or two QSBS positions.
Startup — $5,000 / year (up to 10 shareholders)
For early-stage companies who want the analysis run at the entity level and provided to the cap table.
- Annual company-level §1202 attestation memo
- Annual Active Business Test (80%) calculation and supporting documentation
- Coverage extends to all current QSBS-holding shareholders (up to 10)
- Annual 30-minute call with CEO or CFO
- Notification framework for events that could affect §1202
Growth — $10,000 / year (11–50 shareholders)
For seed- and Series A-stage companies with expanded cap tables.
- Everything in Startup tier
- Coverage for up to 50 QSBS-holding shareholders
- Annual 45-minute call (CEO/CFO plus optional finance lead)
- Quarterly email digest covering any §1202-relevant developments
Scale — $20,000 / year (51–200 shareholders)
For venture-backed companies approaching or past Series B.
- Everything in Growth tier
- Coverage for up to 200 QSBS-holding shareholders
- Annual 60-minute call with CEO/CFO, plus a separate 30-minute call with outside counsel or CFO team
- Pre-issuance review of one financing round per year for §1202 impact
Enterprise — Custom quote (200+ shareholders or unusual structures)
For late-stage companies, holding-company structures, or companies with international subsidiaries that complicate the active business test.
Why pay for this every year?
Because the IRS does not grant exclusions based on what you remember. It grants them based on what you can prove.
A $10M QSBS exclusion is worth ~$2.38M in avoided federal tax — and in Washington, the entire combined federal-plus-state exposure on the excluded portion is $0. The cost of being unable to defend that exclusion is the exclusion itself.
The annual practice is cheap insurance on a number with that many zeros.
Frequently asked questions
Who's the attorney? Joe Wallin is a Seattle-based startup attorney at Carney Badley Spellman. He has spent the bulk of his career representing founders, early-stage companies, and the investors who back them, with a particular focus on the equity, tax, and securities issues that determine what a founder actually keeps at exit. He writes The Startup Law Blog, which has been the de facto reference for Washington startup legal questions for more than a decade.
How is this different from calling a lawyer when I need a letter? Ad-hoc attestation is reactive and billed at the worst possible time (during a diligence sprint). This service is proactive, scheduled, and bundled with a planning call. Five years of dated, contemporaneous letters is also a materially stronger defense than one letter generated under pressure at exit.
What happens if my §1202 status fails the analysis? You'll know before the buyer's diligence team does. We'll talk through what (if anything) can be done to cure or mitigate, and what the gain treatment looks like under alternative scenarios.
Is the attestation letter binding on the IRS? No attestation letter is binding on the IRS — including those from Big Four accounting firms. The letter is contemporaneous evidence from counsel, which is what diligence teams and examiners look for. It is not an insurance policy. It is the documentation that any reasonable §1202 defense rests on.
Do you guarantee the exclusion? No reputable attorney can guarantee an IRS outcome. We guarantee the quality of the analysis and the timeliness of the documentation.
What if I sell mid-year? Existing subscribers get an updated final attestation as part of the exit work at no additional charge for that letter; standard hourly rates apply to the transactional work itself.
Cancellation? Cancel any time before annual renewal. No refunds on the current year's fee.
Engagement letter? Yes. A standard engagement letter executes after the conflict check and before any work product is delivered. This is a legal matter, not a SaaS subscription.
Founding members
The first 10 QSBS Sentinel™ subscribers get:
- Priority onboarding
- First pick of attestation month
- A direct line to me for the first year
- Recognition (with permission) on the founding members page
No price discount — the service is priced for the value it delivers. The benefit is access.
Request engagement
To begin engagement, email wallin@carneylaw.com with the subject line "QSBS Sentinel Engagement Request" and include the following details:
- Engaging as — a company, or as an individual
- Name — the full legal name of the company, or your full name if engaging individually
- Your name and role — and the best email to reach you
- Entity type — C-Corp, LLC (and tax classification), or N/A if individual
- Approximate formation date
- Approximate number of QSBS-holding shareholders — 1, 2–10, 11–50, 51–200, or 200+
- Preferred tier — Individual, Startup, Growth, Scale, Enterprise, or "recommend one"
- Preferred attestation month — or "no preference"
- Brief description of the business
- Any material events in the past 12 months — financings, secondaries, redemptions, conversions, pivots (optional)
After we receive your request, we will:
- Run a standard conflict check (typically within 48 hours)
- Send you an engagement letter scoped to your chosen tier
- Once the letter is signed and the annual fee is paid, schedule your first attestation
Sending this email does not create an attorney-client relationship. A formal engagement begins only when both parties have signed an engagement letter. Please do not include confidential information beyond what is needed to run conflicts.