On October 2, 2017, Treasury Secretary Steven Mnuchin issued a report recommending, among other changes, the complete withdrawal of proposed regulations under Section 2704 of the Internal Revenue Code. The proposed regulations had caused significant concern amongst owners of closely held businesses and their advisors since being released in August of 2016. Business owners, advisors and members of the business valuation community flooded the IRS with comments and appeared at a public hearing to indicate that the proposed regulations were overreaching, created far too many hypothetical and unrealistic circumstances, and would lead to unintended consequences, including overvaluation in cases where discounts for lack of control and lack of marketability were warranted.
The Trump Administration and the “Big Six” have provided a general framework for tax reform and are promising to release more details as early as this week. While tax reform is still subject to significant changes in scope and direction, we are left to ponder a number of possibilities when it comes to future C corporation and pass-through entity tax rates.
MPI was a proud sponsor of the ACTEC 2017 New England Regional Meeting at the Cranwell Spa & Golf Resort in Lenox, MA - September 08-10, 2017