Treasury Announces that it will Withdraw the Estate Valuation Proposed Regulations

On October, 4, 2017, the Department of Treasury announced recommended actions Download Adobe Reader to read this link contentto withdraw, partially revoke, or revise eight regulations identified by Treasury for review under Executive Order 13789, which called for the identification of tax regulations that impose an undue burden on taxpayers. 

Among the actions recommended, Treasury announced the withdrawal of proposed regulations under section 2704 on Restrictions on Liquidation of an Interest for Estate, Gift, and Generation-Skipping Transfer Taxes. The proposed regulations would have eliminated “valuation discounts,” a policy which currently permits certain discounts for lack of control (minority interests) and lack of marketability that are commonly applied to lower the value of transferred interests for gift, estate, and generation-skipping tax purposes. By eliminating valuation discounts, the proposed regulations would have negatively impacted succession planning for many small businesses.

On November 1, 2016, Advocacy submitted a public comment letter conveying small business concerns about the estate valuation proposal.  On July 7, 2017, Treasury issued Notice 2017-38 to announce that the agency would be reviewing eight deregulatory actions, including the estate valuation proposed regulations.

Advocacy contact: Dillon Taylor, 202-401-9787.

Date: Wednesday, October 4, 2017

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