When the news broke that the Treasury officially withdrew the controversial proposed Section 2704 regs, BVWire happened to be at the annual conference of the American Society of Appraisers in Houston. The ASA, along with the AICPA and NACVA as well as business groups, attorneys, wealth planners, and family business owners, all banded together to fight the proposed regs that sought to redefine fair market value and curb estate valuation discounts for minority interests.
Not a shocker: Individuals we spoke with were not surprised that the regs were withdrawn but were relieved that they are gone for good. The observations we got from ASA members Trey Stevens (Stevens & Greer LC) and Chris Treharne (Gibraltar Business Valuations), sum up the various remarks we received:
We're not surprised by the withdrawal of the proposed regs. The November presidential election outcome, the enforceability of the proposed redefinition of fair market value, and the pushback from the legal, valuation and business communities certainly provided significant obstacles to adoption. At best, the proposed regs were poorly crafted and added confusion. At worst, adoption may have had a significant adverse impact on the ability of closely held business owners to pass the American dream of business ownership on to their heirs.
The S Corporation Association issued this statement: “Today’s report marks the successful culmination of more than a year of advocacy on the part of the S Corporation Association and its allies in the business community. To fight these rules, we have drafted official comments, testified, organized coalitions, educated policymakers, and sponsored reports.”
Kevin Kester of the National Cattlemen’s Beef Association testified at the IRS public hearing on the regs back in December and issued this statement: "We’re grateful the Treasury has made good on their commitment to reduce complexity and lessen the burden of tax regulations, particularly for family farmers and ranchers."
You can read the full Treasury report here.
BVWire applauds the amazing efforts of the valuation community in coming together to speak in a strong and compelling voice on these controversial regs.
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