Contact your Representative and Senators!

 

23 years after the IRS surrendered and stopped using their flawed “family attribution” approach to valuing family-owned businesses, Treasury is trying to resurrect the concept using Section 2704

If you intend to pass on your family business to the next generation, you need to pay attention!  These rules could increase your gift and estate taxes by 30 percent or more.  What should you do?

  • First, call your tax advisers to assess how these proposed rules will affect your business
  • Second, fill out the information below to send a note to your Senators and Representative to educate them on how Treasury’s rules could hurt your ability to grow and create jobs.

The comment period ends November 2nd, and Treasury has only a few months to finalize the rules before President Obama leaves the White House, so time is short!   You need to act now.

Dear Senator/Representative:

As the owner of an S corporation, I am deeply concerned with the proposed regulations to implement Section 2704, published by Treasury on August 2nd, 2016.

My company is family-owned and I intend to pass it down to my children in the future. We take pride in running the business as a family and providing employment and services to our community. Estate and gift taxes greatly impact my ability to continue the business among my descendants.

My understanding is that the proposed Section 2704 regulations would restrict the use of valuation discounts for shares of my business passed down to my family members. These discounts reflect the underlying economic reality of owning a private business and are not used to avoid paying our fair share of taxes.

Under the new Treasury approach, there would be no recognition of lack of control and marketability when valuing shares of my business, leading to increases of 30 percent or more in gift and estate taxes. Further, this new rule applies to family-owned enterprises only.  If an interest in my business were passed on to a non-family member, then the estate would be allowed to take lack of control and lack of marketability into account when valuing the stake.

For these reasons, I respectively request that you call on Treasury to pull back the proposed rules.

Thank you for your attention to this extremely important matter.

 

Please fill out the form below to submit this message to your Representative.

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