Congressman Sensenbrenner Introduces Bill to Save Family-Owned Businesses From Death Tax Increases
The IRS is proposing new and harmful regulations that would hurt family-owned businesses.
WASHINGTON, D.C. – Today, Congressman Jim Sensenbrenner introduced H.R. 6042, legislation that would stop the Internal Revenue Service (IRS) from placing unnecessary and burdensome estate tax regulations on family-owned businesses.
The IRS is proposing new and harmful regulations that would hurt family-owned businesses. Currently, valuation discounts exist for family business owners to make the transition from the owner to an heir after death more manageable. The IRS-proposed regulations would eliminate these valuation discounts, forcing many family-owned businesses to sell.
These burdensome regulations would be particularly damaging to family-owned farms, many of which often have large assets due to land holdings, but maintain relatively modest incomes.
Congressman Sensenbrenner: “The IRS should not be in the business of making it difficult for family-owned businesses to keep their doors open, especially during a difficult time such as the loss of a loved one. At a time when the economic outlook is precarious and full of uncertainty, it’s critical we do everything we can to keep our nation’s small and family-owned businesses well and flourishing.”
- Currently, there are valuation discounts available for family business owners for purposes of estate and gift taxes, due to the lack of an identifiable market for the business.
- When a family tries to pass a family-held business on to the next generation, there are valuation discounts available to protect a business’s assets from undue taxation, including:
- Lack of Control Discount: Heirs often receive portions of family-held businesses that are minority ownership stakes. These minority owners do not have control over management decisions, making the minority interest less valuable to a potential buyer.
- Lack of Marketability Discount: Most family-held businesses are not easily convertible to cash. This is a barrier to easy liquidation that, in the case of a family-held business, makes it less valuable to a potential buyer.
- Currently, the fair market value of an interest in a family-held business is based on what a willing seller would be able to receive from a willing buyer. These discounts reflect reality by properly determining the realistic value of a family business in the open market.
Mentioned in This Press Release
Recent Press Releases by U.S. Rep. Jim Sensenbrenner
The Rapid DNA Act would establish a system for the integration of Rapid DNA instruments for use by law enforcement to help reduce the DNA backlog.
Rep. Sensenbrenner Statement on the Confirmation of Judge Neil Gorsuch to the United States Supreme CourtApr 7th, 2017 by U.S. Rep. Jim Sensenbrenner
"Time and again, Judge Gorsuch has proven himself an ardent defender of the Constitution..."
Congressman Sensenbrenner ranked highest in the Wisconsin delegation in 2016 with a score of 97.