Of the numerous comment letters received by Treasury regarding the tax regulations under review as part of the government's effort to reduce regulatory burdens on taxpayers, the majority of letters focused on the estate tax rules.
Opponents are requesting that most of the regulations affecting estate taxes under §2704 should be withdrawn or modified. Treasury's decision could have a significant effect on a taxpayer's ability to apply valuation discounts as part of the valuation of interest in family-owned businesses for estate, gift, and generation-skipping transfer tax purposes.
Half of the comment letters analyzed by Bloomberg BNA—including ones from the Family Business Estate Tax Coalition, the American Farm Bureau Federation, the American College of Trust and Estate Counsel, and the American Institute of CPAs—asked for the government to withdraw or modify the estate tax regulations under §2704. The §2704 rules would change the valuation of interests in family-owned businesses for estate, gift, and generation-skipping transfer tax purposes. The rules were intended to stem abuses in which valuation discounts, which reduce estate tax liability, were being applied to partnerships containing marketable securities such as stocks and bonds that could be easily valued and sold. But opponents see them as being too broad.