Update on Proposed Tax Regulations Under Section 2704

In August and December of last year, we provided you with information and updates on proposed regulations under Section 2704 of the Internal Revenue Code. Those articles  can be found here:

As discussed in these previous articles, proposed Section 2704 threatened to restrict or eliminate the use of discounts for lack of control and lack of marketability related to transfers of interests in certain family businesses.

However, on April 21, 2017, President Trump issued an Executive Order instructing the Secretary of the Treasury to review all “significant tax regulations” issued since January 1, 2016.  This Executive Order required the Secretary of the Treasury to issue a 60-day interim report that identified regulations that impose an undue financial burden on taxpayers, add undue complexity to tax laws, or exceed the statutory authority of the Internal Revenue Service (“IRS”).

The Secretary recently issued its 60-day interim report and identified eight regulations that meet the criteria established in President Trump’s Executive Order.  Among the eight regulations identified were the proposed regulations under Section 2704.

The Treasury intends to propose reforms for all eight regulations – ranging from a streamlining of certain provisions to a full repeal of the various regulations.  A copy of the interim report can be found here.

The Treasury has requested comments on whether the eight regulations should be rescinded or modified by August 7, 2017.  A final report that recommends specific actions to reduce the burden of the identified regulations must be issued to President Trump by September 18, 2017.

Therefore, while there has been no final resolution regarding Section 2704, it appears as if the proposed regulations under Section 2704 will be either modified or rescinded.  We will provide additional information once it is available.  Stay tuned.

For additional questions, contact Schneider Downs or visit the Our Thoughts On blog.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2020 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on

The IRS Wants to Verify Your Identity—Wait, Is This a Scam?
International, Tax BY Vicky Lu
IRS Releases New Proposed Partnership Schedules (K-2 and K-3) for International Tax Reporting
S Corporation Rollover Equity – Involve Your CPA Early and Often
Using External Data and Process Automation to Enhance Analysis
Financial Boot Camp Series: Focus on What You Can Control to Increase After-Tax Performance
IRS Issues Final Regulations for Non-Grantor Trust Deductions

Register to receive our weekly newsletter with our most recent columns and insights.

Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us

contact us

Map of Pittsburgh Office

One PPG Place, Suite 1700
Pittsburgh, PA 15222

p:412.261.3644     f:412.261.4876

Map of Columbus Office

65 East State Street, Suite 2000
Columbus, OH 43215

p:614.621.4060     f:614.621.4062

Map of Washington Office
Washington, D.C.

1660 International Drive, Suite 600
McLean, VA 22102