A bill to amend the Internal Revenue Code of 1954 to provide income tax simplification and reform of the provisions relating to subchapter S corporations.

Expands, under the Internal Revenue Code, the definition of a small business corporation from 10 shareholders to 15 shareholders, or 25 shareholders in the case of a corporation which has been in existence for 5 or more years.

Provides that stock owned by an individual which was received by him by reason of the death of an original shareholder shall, for specified purposes be treated as if it were still owned by such original shareholder. Broadens the classes of permissible shareholders. Permits specified types of trusts to be shareholders.

Provides that termination of Subchapter S Corporation election under the Internal Revenue Code may be revoked only if shareholders owning more than 50 percent of the stock of the corporation on the day on which the revocation is made consent to the revocation. Provides for a carryover of disallowed deductions for a corporation's net operating loss with regard to the determination of a shareholder's portion of such loss.