Republicans on the House Ways and Means Committee are urging the Treasury Department to withdraw its proposed rules relating to the estate tax, arguing that the regulations are “not consistent with congressional intent.”
“In order to avoid immediate and substantial economic harm to family-owned businesses and the jobs they create, these regulations should be withdrawn,” the lawmakers said in a letter Thursday to Treasury Secretary Jack Lew.
{mosads}The letter is the latest effort from congressional Republicans to stop the rules, which Treasury proposed in August. In September, Rep. Warren Davidson (R-Ohio) and Sen. Marco Rubio (R-Fla.) introduced legislation that would prevent federal funds from being used to finalize the rules. Also, 41 senators wrote to Lew asking that the proposed rules be withdrawn.
Republicans have long disliked the estate tax, which they often call the “death tax.” The House voted to repeal the estate tax last year.
The proposed rules would limit or eliminate discounts on the value minority shares of certain businesses for estate-tax purposes. The Obama administration said that the rules were designed to close a “loophole” used by wealthy families.
But the Ways and Means Republicans said that the rules would curb discounts when interests in a family-owned business are transferred among family members, which is not in line with the legislative history of the tax-code section under which the rules fall.
The lawmakers pointed to a couple of parts of the rules that they think are overly broad and expressed concerns that family-owned businesses would be disadvantaged compared to other businesses.
“Treasury tax policy officials have recently stated that the proposed regulations are not intended to be as far reaching as would appear from the language,” the lawmakers said.
“While this is an encouraging statement, no clarity has been provided as to what Treasury did intend to cover with the proposed regulations. The combination of overly-broad language that does not make clear what discounts would continue to be recognized and new concepts that clearly are contrary to congressional intent is very troubling.”
If Treasury issues further guidance in this area, the guidance should take the form of proposed rules and should be narrowly targeted, the lawmakers said.