On July 7, 2017, the IRS announced that it will be reviewing whether to rescind or modify proposed regulations relating to the valuation of interests in a closely-held partnership or corporation for estate, gift, and generation-skipping transfer tax purposes.

The proposed regulations (REG-163113-02) would eliminate "valuation discounts," a policy that currently permits certain discounts for lack of control (minority interests) and lack of marketability that are commonly applied to lower the value of transferred interests for gift, estate, and generation-skipping tax purposes.

By eliminating valuation discounts, the proposed regulations would negatively impact succession planning for many small businesses.

The IRS notice includes several other deregulatory actions in response to an executive order directing the IRS and the Department of Treasury to review “significant tax regulations” issued on or after January 1, 2016, and instructing the agencies to report to the president by Sept. 18, 2017, with specific recommendations aimed at mitigating the burden imposed by regulations they identify.

Comments are due August 7, 2017.