Attack A-7 · phase-9 · architectural-tension
IRS denies Form 1023; buffer pool stranded under Landseed PBC
IRS denies the Methodology Foundation's Form 1023 — or issues a lengthy information request that delays determination past Month 18 — leaving buffer pool in Landseed PBC's interim fiduciary structure while first credit issuances have already occurred. The formation plan treats IRS denial as a restructure scenario without addressing what happens to already-issued credits if Landseed PBC fails during the extended determination period.
Scenario
IRS denies the Methodology Foundation's Form 1023 — or issues a lengthy information request that delays determination past Month 18 — leaving buffer pool in Landseed PBC's interim fiduciary structure while first credit issuances have already occurred. The formation plan treats IRS denial as a restructure scenario without addressing what happens to already-issued credits if Landseed PBC fails during the extended determination period.
Mechanism
Formation plan acknowledges 'IRS determination denied' but does not address what happens to already-issued credits whose buffer contributions are held in Landseed PBC's fiduciary structure if Landseed PBC fails during extended IRS determination. If both IRS determination is delayed and the fiduciary structure has not been confirmed by counsel, the buffer pool exists in a legal vacuum.
Mitigation
Before any first issuance, the successor trustee/escrow structure must be counsel-confirmed regardless of Foundation timeline. The fiduciary structure should be established as a standalone precondition to issuance, not contingent on Foundation formation. The formation plan should include a 'first issuance blockers' section listing this as a hard stop.
Residual risk
Medium-high. The architecture's most fragile period (Months 0–18) by the buffer pool spec's own admission. The attack exploits the gap between 'counsel-confirmation required' and the urgency of the formation plan.