Contact:
Lois Whitehead, Public Relations Manager
212-719-8405
lwhithead@nysscpa.org

NEW YORK, NY, August 7, 2006 – The New York State Society of Certified Public Accountants (NYSSCPA), in a comment letter to US Senators Charles E. Schumer and Hillary Rodham Clinton, addressed concerns regarding the long-term tax treatment of estates and the impending termination of the Economic Growth and Tax Relief Act of 2001 slated to sunset in 2010

The comments are intended to spur lawmakers to restore stability and constancy to the law so that taxpayers can know the effects of their financial and transactional planning on the taxability of their estate. Though the letter applauds recent proposed legislation for a permanent increase in the estate tax exemption, it outlines opposition to the proposed repeal of the state estate tax deduction which NYSSCPA believes will result in a disproportionate disadvantage to New York State resident decedents.

“Without legislation to clarify the long-term tax treatment of estates, planners are subject to trying to foretell what regime the Congress and Executive Branch are likely to decide. This does not foster confidence in our system of taxation. It is extremely difficult to plan with a constantly changing target, when an exemption is one amount one day and something else the next.” Thomas Riley, CPA, NYSSCPA President said. “If Congress doesn’t act, we’d be back to a $1 million exemption in 2011 and with skyrocketing housing prices and retirement plans, now a major portion of many estates, that will cause many more taxpayers to file state returns paying estate taxes.”

“If certainty is not provided, some small businesses may refrain from committing capital that would ordinarily create jobs in a reaction based on the fear of lack of liquidity at death and the potential inability to pay resultant estate taxes depending upon the estate rate then in effect,” Riley added.

The Society, in its comment letter, urges the senators to ease the administration of estate taxes by retaining the “stepped-up” or reset tax basis of inherited assets upon death to fair market value. The alternative, a “carryover” basis that makes the recipient’s basis the same as the giver’s, would, according to the letter “create chaos and a tremendous administrative burden with respect to assets that have been acquired by the decedent prior to the implemented change” and likely “lead to taxpayers, in good faith, simply guessing at their cost bases with no real proof or substantiation.”

The Society’s comment letter, which can be viewed at www.nysscpa.org, urges the Senators to ease the administration of the state taxes by retaining the tax basis of inherited assets upon death to fair market value. The letter further recommends that transfer rates be set with certainty rather than annual adjustments or by reference to capital gains rates and points to the common sense need for at least some measure of portability of spousal estate tax exemptions.

About the NYSSCPA

The New York State Society of Certified Public Accountants (NYSSCPA) represents 30,000 CPAs in public practice, industry, government and education in a state that serves as the home of Wall Street and major financial institutions. The Society is a not-for-profit organization that seeks to establish and maintain high standards of integrity, honor, and character among its membership. The New York State Society of CPAs is located at 3 Park Avenue, New York, NY 10016. To learn more about the Society call 800-633-6320 or visit the Society’s website at www.nysscpa.org.