Republicans on the tax-writing House Ways and Means Committee sent a a
The Treasury unveiled the
Treasury’s proposed regulations pertain to Section 2704 of the Tax Code relating to the valuation of business interests for estate and gift tax purposes. These regulations would limit or eliminate the valuation discounts that are usually associated with ownership of a non-controlling interest in a business. The lawmakers believe the proposed regulations would lead to higher valuations and higher estate and gift tax liabilities when family businesses are transferred between family members.
The letter from the House Republicans follows on the heels of a letter last month from Senate Republicans (see
Lawmakers argue the proposed regulations would increase the burden of the estate tax on family-owned businesses and make it more difficult for families to pass their businesses on from one generation to the next.
“In order to avoid immediate and substantial economic harm to family-owned businesses and the jobs they create, these regulations should be withdrawn,” said the letter. “Any new proposal in this area should be clearly defined and narrowly targeted within the reach of the applicable statutory rules.”
The letter contends that the Treasury’s proposed rules are inconsistent with the congressional intent underlying Section 2704 of the Tax Code. “Treasury’s recently proposed regulations, as drafted, would eliminate, or severely limit, minority discounts for transfers among family members of business interests in family-owned businesses,” said the lawmakers. “This new approach does not reflect congressional intent.”