This week 41 Republican senators sent a letter to Treasury Secretary Jacob Lew urging the Administration to withdraw its' proposal to minimize the number of estates that will be eligible for valuation discounts and avoidance of double taxation via the estate, gift or transfer taxes. The use of valuation discounts on family-controlled entities began in 1993 and quickly surged as a popular tool for estate planners. In valuation discounts, the amount assets are worth is reduced. For example, a company may not be particularly marketable or a stake in a company is a minority interest. That allows the assets to fall under the estate tax threshold, which is $5.45 million for individuals and $10.9 million for families.

The IRS approach would impact family businesses by assuming that every owner is deemed to have a six month period to sell his or her interest - even where no right actually exists. Under this mechanism, all minority and most lack of marketability discounts will be eliminated or greatly suppressed.

The letter was signed by Senators Orrin Hatch (R-UT), chairman of the Senate Finance Committee, John Thune (R-SD), Pat Roberts (R-KS), John Cornyn (R-TX), Johnny Isakson (R-GA), Chuck Grassley (R-IA), Mike Crapo (R-ID), Dean Heller (R-NV), Roy Blunt (R-MO), John McCain (R-AZ), Steve Daines (R-MT), David Perdue (R-GA), Tom Cotton (R-AR), Susan Collins (R-ME), Cory Gardner (R-CO), Jerry Moran (R-KS), Mike Enzi (R-WY), Marco Rubio (R-FL), Dan Coats (R-IN), Lamar Alexander (R-TN), Richard Shelby (R-AL), John Barrasso (R-WY), Mark Kirk (R-IL), Jim Inhofe (R-OK), Kelly Ayotte (R-NH), Roger Wicker (R-MS), Jim Risch (R-ID), Ted Cruz (R-TX), John Boozman (R-AR), Shelly Moore Capito (R-WV), Mike Rounds (R-SD), Deb Fischer (R-NE), Bob Corker (R-TN), Tim Scott (R-SC), Joni Ernst (R-IA), James Lankford (R-OK), Jeff Flake (R-AZ), Thad Cochran (R-MS), Thom Tillis (R-NC), David Vitter (R-LA), and Ben Sasse (R-NE).

As previously reported, PMAA joined the Family Business Coalition and 118 other signers in a letter to Treasury opposing the proposed regulations. PMAA has also been working with the Family Business Estate Tax Coalition (FBETC) to coordinate an alternative legislative plan to repeal or limit the scope of the regulations once finalized. Recently, Rep. Warren Davidson (R-OH) introduced H.R. 6100, known as the "Protect Family Farms and Businesses Act." The PMAA supported bill would halt the death tax increase, which barring Congressional action could go into effect later this year.