Long-awaited proposed regulations under section 2704(b) to limit the ability of family-owned businesses to apply minority discounts under certain circumstances may not be as impactful as previously expected, according to several sources.
Easing up? The IRS appears to be reversing itself on this matter, according to a posting on LinkedIn. The posting is from Richard Dees, a partner at McDermott Will & Emery LLP, who had sent a 29-page letter to the government critiquing the proposal as beyond the scope of its powers. The posting cites a BNA news item that quoted an IRS official. Also, a blog post from the S Corp Association cites the same BNA news item.
The chair of the AICPA FVS executive committee, Carol Carden (PYA PC), tells BVWire: “The IRS officials working on the section 2704(b) regulations recently said to the AICPA Trust, Estate, and Gift Tax Technical Resource Panel that they are still working on the regulations, and the regulations will rely on the statute, and not follow the Treasury’s green book proposals.” Does this mean that the regulations may not have as big of an impact as was thought—or maybe no impact at all? “I think we really won’t know the answer to that question until the regulations are released,” says Carden. “But as of now, it does not appear to be as impactful as we first thought.”
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