The nation’s largest farmers’ advocacy organization is urging Congress to pass legislation to block a recent IRS proposal that would result in higher estate taxes for farmers and ranchers.
An IRS plan for more restrictive rules for using valuation discounts would make it more difficult for farmers and ranchers who operate family-owned partnerships, LLCs or corporations to transfer their farms and ranches from one generation to the next.
The Protect Family Farms and Businesses Act, H.R. 6100 and S. 3436 introduced by Rep. Warren Davidson of Ohio and Sen. Marco Rubio of Florida, would stop the IRS from implementing its proposed restrictive estate tax discount valuation.
In a letter thanking Davidson and Rubio, American Farm Bureau Federation President Zippy Duvall noted that individuals, family partnerships and family corporations “own over 97 percent of our nation’s over 2 million farms and ranches. Farm Bureau believes that America values these family-owned farms and ranches because of the food, fiber and fuel they produce; the contribution that agriculture makes to job creation and the economy; and the open space that farming and ranching protects.”
Farm Bureau also is urging farmers and ranchers to use an IRS public comment period to tell that agency how its proposed changes could impose significant new tax costs onto their businesses and threaten their ability to make a viable business transition plan.
AFBF tax specialist Pat Wolff said the IRS “is proposing to take away an estate planning tool that allows farmers and ranchers to reduce the value of their business assets for estate tax purposes. This means that farmers and ranchers could end up paying more estate taxes when a family member dies. … When the parent dies it’s important that the business be able to transfer to the children so that it will continue. High estate taxes make that harder, and we want to make sure that we keep the estate taxes as low as possible.”
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