Biz groups, farmers voice opposition to Treasury estate tax rules

Biz groups, farmers voice opposition to Treasury estate tax rules
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Business groups, small-business owners and family farmers are voicing their opposition to proposed estate-tax rules in formal comments submitted to the Treasury Department and IRS.

"In the midst of a series of tough years for farmers, the proposed regulations would only add additional hardship on already struggling farm families," the National Association of Conservation Districts wrote.

Comments are due Wednesday on the rules, which were proposed in August. The proposed rules have also drawn criticism from Republicans on Capitol Hill, with Rep. Warren Davidson (Ohio) and Sen. Marco RubioMarco Antonio RubioSunday shows preview: Justice Ginsburg dies, sparking partisan battle over vacancy before election Florida senators pushing to keep Daylight Savings Time during pandemic Hillicon Valley: DOJ indicts Chinese, Malaysian hackers accused of targeting over 100 organizations | GOP senators raise concerns over Oracle-TikTok deal | QAnon awareness jumps in new poll MORE (Fla.) introducing legislation to prevent them from being implemented.

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Treasury's proposed rules would limit discounts on minority interests in family businesses when they are valued for estate-tax purposes.

While the Obama administration views the proposed rules as part of their efforts to prevent wealthy people and corporations from avoiding taxes, many stakeholders argue that it would make it harder for family businesses and farms to be passed on to future generations.

As of Wednesday morning, Treasury and the IRS had received more than 9,000 comments on the proposed rules.

Many of the comments were from individuals who oppose the estate tax. There were also a number of comments from business groups and owners of small businesses and farms.

The National Small Business Association said proposed rules "would impose significant new tax costs on family-owned businesses, diverting capital from business investment, costing jobs and threatening the ability of families to pass businesses on to the next generation of owners."

The group cited its data that more than 70 percent of family-owned businesses don't make it through the second generation.

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The Associated General Contractors of America said that the proposed rules "would increase estate and gift taxes by 30 to 50 percent or more on family-owned businesses, resulting in few family construction companies surviving from one generation to the next." 

The National Association of Manufacturers said that a recent survey it conducted of family-owned manufacturers found that "over half of respondents indicated that their business was likely to spend over $50,000 on additional estate and succession planning due to this regulation in the coming months."

A number of small-business owners and family farmers also weighed in. Some farmers said that "as drafted, the proposed regulations fail to consider the concerns and economic realities of family-owned businesses like mine."

Very few small farms and family businesses currently pay the estate tax. The Urban-Brookings Tax Policy Center estimated that only 30 of them would pay estate taxes in 2015.

A public hearing on the proposed rules is scheduled for Dec. 1.

- updated at 6:36 p.m.