In August of this year, the U.S. Treasury Department proposed some rules changes to federal estate tax law. Since then, federal lawmakers have been trying to stop the rules from becoming law, and at last 41 senators are on board with the battle.
Among other things, the new rules would limit or remove the ability to take tax discounts on the value of shares related to businesses for estate tax purposes. Statements indicate that the White House is behind this change in the rules because the administration believes the changes close loopholes in the estate tax law. Those loopholes, says the administration, have been used by very wealthy individuals to avoid federal estate taxes. While legal, the administration doesn't think this use of loopholes is in the spirit of the law.
Lawmakers who are opponents of the new rules say that closing the loophole completely has unintended consequences that don't relate to the wealthiest estates. These lawmakers note that a certain reading of the new rules could lead to tax consequences for family businesses, where shares or interest in the business would pass among family members.
As it stands, the rules are not yet being implemented. First, they have to be officially added to the estate tax code. With so many lawmakers against the rules, that might not happen.
It can be difficult to keep up with what is and isn't tax or estate law, and when laws do change it is almost impossible for laymen to understand exactly what impact those changes might have. Working with a professional to complete estate plans and then maintain those plans in the face of changing circumstances and laws can help you protect your heirs from taxes and other burdens.
Source: The Hill, "GOP lawmakers: Estate tax rules should be withdrawn," Naomi Jagoda, Nov. 03, 2016