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ASA Urges Full Withdrawal of IRS’s Proposed Section 2704 Regulations

Jul 20, 2017

On July 18th, the American Society of Appraisers filed comments urging the Internal Revenue Service to fully withdraw its proposed regulations under Section 2704 of the Internal Revenue Code. The IRS proposal would change how minority interests in family-controlled businesses are valued. In its comments, ASA noted the proposal would “run counter to the valuation precedents established in Revenue Ruling 59-60, the Estate of Bright case, and Revenue Ruling 93-12.” This departure would require the use of a “hypothetical transaction for which no counterpart exists in the marketplace, thereby imposing untenable burdens upon the valuation professional and the taxpayer”. For these reasons, as well as those raised in ASA’s comments during the initial rulemaking proceeding, ASA urges IRS to withdraw its proposed Section 2704 regulations. To read ASA’s comments to IRS, click here.

This latest comment was filed in response to an IRS notice which proposes the streamlining or withdrawal of eight sets of regulations. For those interested in filing individual comments, IRS will accept comments until August 7th. To read the IRS notice, click here.