A Kansas Farm Bureau representative and agricultural law professor says proposed changes to the estate tax would likely be struck down if finalized and litigation followed. Roger McEowen predicts that, if the Internal Revenue Service finalized a proposal that would crack down on a tactic for family operated companies to reduce asset values to skirt the estate tax, plaintiffs suing the agency are likely to prevail. The IRS proposal, in general, would end most of the so-called valuation discounts, which can be applied to intra-family transfers of interest when there are restrictions attached, such as on liquidation and voting rights. The American Farm Bureau Federation and its state organizations, including Kansas, plan to request the IRS scrap the entire proposal.
McEowen says that the issue has been a source of litigation against the IRS and that courts have routinely held that the valuation discount is reasonable.
Source: NAFB News Service