Democrats face growing storm over IRS reporting provision
Treasury to withdraw proposed estate tax rules
The Treasury Department announced on Wednesday that it is planning to withdraw estate-tax rules proposed by the Obama administration that were widely opposed by GOP lawmakers and business groups.
The department in a report called the rules' approach "unworkable."
President Trump ordered the report in April, instructing the Treasury Department to examine tax regulations issued on or after Jan. 1, 2016. In July, Treasury identified eight rules that it found to have an undue burden on taxpayers or add excessive complexity to tax laws.
Treasury said in a statement that the department is also working on identifying other rules to potentially revise or repeal.
"This is only the beginning of our efforts to reduce the burden of tax regulations," Treasury Secretary Steven Mnuchin said. "Our tax code has been broken for too long, and this retrospective review, along with our efforts on tax reform, will ensure that we have a tax system that fosters economic growth."
The Obama administration proposed rules in August 2016 that would limit discounts on the value of minority shares of family-owned businesses for estate-tax purposes. The rules were aimed at preventing wealthy people from avoiding taxes, but Republicans and business groups warned that they would make it harder for people to hand down their companies to their children.
Trump's Treasury Department agreed that the rules would make it harder to pass on businesses. Treasury also said that the rules' compliance burdens would have been excessive and that the rules would have been difficult to apply.
The tax-reform framework that the Trump administration and congressional GOP leaders released last week would repeal the estate tax.
Treasury also said on Wednesday that it plans to fully repeal proposed rules relating to the definition of a political subdivision that can issue tax-exempt bonds.
Treasury also said officials will consider revoking in part or substantially revising other rules, including those aimed at curbing corporate inversions that drew opposition from Republicans and the business community.
Inversions are transactions in which a U.S. company merges with a foreign company and reincorporates overseas to lower its taxes. The Obama administration issued rules aimed at limiting the tax benefits of inversions by recharacterizing certain intracompany debt as equity.
Treasury said it's considering revoking the rules' documentation requirements, but that it intends to keep other parts of the rules pending the enactment of tax-reform legislation that could make the rules unnecessary.
--This report was updated at 11:46 a.m.