The Internal Revenue Service last week
identified the proposed Section 2704 regulations concerning the valuation of family businesses among eight unduly burdensome or complex rules that would be marked for rescission or modification. According to the notice, “these proposed regulations would create an additional category of restrictions that also would be disregarded in assessing the fair market value of an interest.” The notice also noted concerns from public commenters including the increased financial burden to family businesses and the difficulty in making accurate valuations.
The move comes as welcome news to family owned construction businesses.
Last month Associated Builders and Contractors, along with several other trade groups, released a new study on the impact these pending Section 2704 regulations would have on family businesses and their employees.
The notice was issued pursuant to
Executive Order 13789, signed by President Trump in April, in which the Treasury Department was instructed to review all significant rules issued since 2016 in order to identify and reduce tax regulatory burdens.
The notice further provides for a public comment period on whether the identified regulations should be rescinded or modified. Comments from the public are due Aug. 7. A final report from the secretary of the treasury is due on Sept. 18.