By: Steimle Birschbach, LLC 2021
On September 24, 2021, we posted a blog entitled “Federal Estate Tax Law Changes Are Near” that summarized the provisions of draft legislation approved by the House Ways and Means Committee on September 15, 2021, that would have made drastic changes to the federal estate tax law. Many practitioners and political analysts expected some form of the legislation to be passed before year end. Since our blog post, the estate tax related provisions have been completely removed from the bill, now called the Build Back Better Act.
The Biden Administration needed only the support of its party to pass the estate tax law changes. However, two Democratic Senators, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, came out opposed to the estate tax changes (as well as other provisions of the initial proposed legislation), effectively vetoing the changes.
The House passed the Build Back Better Act on November 19, 2021. It now must come to a vote in the Senate, and predictions are that the Senate will not pass the bill in its current state. This means that the bill will have to go back to the House before reaching President Biden’s desk.
While it is not unheard of for Congress to make last minute additions to a bill, there is currently no indication that the estate tax law changes will be re-inserted into the bill. This being said, the Congressional Budget Office estimates that the Act would increase the federal deficit by $367 billion over the next 10 years ignoring the revenue expected from the IRS’s increased enforcement budget, and $250 billion if the increased enforcement revenue is taken into consideration. The originally proposed estate tax law changes would reduce the Act’s burden to the deficit and so could be an incentive for a last-minute re-insertion. At this time, no one except maybe our legislators can know.
This blog post is provided for informational purposes only and by its very nature is general. It is not a treatise on the issue, nor does it discuss all considerations and aspects of the matter discussed. This information is not intended as legal advice and readers should discuss with their accountant, attorney, or tax professional before acting on any information contained herein.