Sprinkled among the political thunder and lightning we’ve tried to escape this year is a proposal to change tax rules affecting transfers of ownership of family businesses. There’s a lot of hype, panic, outrage and confusion over proposed changes to Internal Revenue Code (“IRC”) Section 2704. If your family owns a business and has been advised to plan ahead to reduce potential estate tax, these changes are targeted at you.

What is changing? Frankly, we’re not entirely sure. The only thing top estate planning lawyers and business valuation experts across the country agree on is the proposal is indecipherable as written. But to sort through some of the implications, let’s start with understanding where we are now.

At present, the U.S. tax law allows gifts of shares of a family-owned business from one generation to another. Both the statute as written and a long series of Tax Court case law have reinforced the use of applying discounts to the value of family business interests when the transferred interest 1) does not convey control of the business and 2) is privately held. Why does this matter? Consider a simple example. Assume parents own a business that is worth $10 million, the current estate tax rate is 40 percent and parents will have a taxable estate. Under this scenario, the potential estate tax bill could be as much as $4 million. That’s a big check to write.

Mom and Dad wisely consult with their tax advisors well in advance to plan ahead to reduce this tax bill. They make gifts to each of their five children of one-fifth of the family business. Current law allows a discount for lack of control for each of those minority interests, as well as a discount for lack of marketability. These discounts together could amount to as much as 40 percent. In effect, a one-fifth interest that may have initially been valued at $2 million each could be discounted to $1.2 million and result in hundreds of thousands — or even millions — of dollars reduction in transfer taxes among the five gifts.

This example is vastly over-simplified and doesn’t account for exemptions, limitations on gifting and other complexities of the estate tax law, but the financial benefit of utilizing discounts is clear. The suitability of discounts has been relatively plain since 1993, when Revenue Ruling 93-12 was spelled out the “family attribution rule”:  in determining the value of a gift of a minority block of stock in a closely-held corporation, the block should be valued for gift tax purposes without regard to the family relationship of the donor to the other shareholders. Regardless of who it’s coming from and who it’s going to, each transferred interest is to be valued on its own attributes.

Before 1993, the tax law was based on Revenue Ruling 81-253, which held that ordinarily, no discount for minority status was to be allowed if, based upon a composite of the family members’ interests at the time of the transfer, control (either majority voting control or de facto control through family relationships) of the business resided in the family unit. This understanding formally changed once Revenue Ruling 93-12 was issued.

In the capital markets, restrictions on a business ownership interest (particularly such as limiting voting rights, transferability and so on) causes that interest to be much less interesting to an outside investor and consequently reduces its market value. Clearly, the inability to vote on business matters or to receive a buyout within a reasonable period of time would pose a serious red flag to a potential investor. In contrast, Section 2704 of the tax law (written in 1990 and amended in 1996) offered instructions on when to disregard certain restrictions when an exchange occurs between family members. And now, the 2016 proposal tenders additional rules for determining when restrictions — that otherwise would be repellant to an outside investor — are to be completely disregarded in valuing an interest transferred among family members.

The proposal aims “to eliminate the bells and whistles in family estate planning which have undermined the application and intent of Section 2704,” Leslie Finlow, senior technician reviewer in the IRS Office of the Chief Counsel, said in November at the AICPA National Forensic and Valuation Services Conference in Nashville. To valuation advisors, the proposal appears to be designed to eliminate discounts, such as lack of voting rights, lack of control and lack of marketability that can be attributes of a privately held family business interest. (It is worth noting the proposal appears to impact only family members; transfers among unrelated shareholders do not appear to be impacted in any way.) One aspect proposed is to require a valuation to assume a “put” option:  that is, to pretend any family member has the immediate ability to sell his or her minority interest back to the company and receive undiscounted value, even if this ability doesn’t exist in real life among the family.

All this being said, the one thing experts agree is clear is the proposal is nearly impossible to interpret as currently written. Family business owners, legal counsel and tax advisors have rushed to submit comments to the IRS and, at the same time, plan for the worst possible outcome. To date 9,830 comments have been submitted in advance of Dec.1 hearings.

Finlow, speaking for herself and not for the IRS, indicated “there is no rush to finalize (the regulations) before the end of the year.” Furthermore, “We are anxious to review all of the comments we’ve received in order to get a better understanding of the public’s concern, so we can improve this guidance. It is certainly not in the best interests of the Treasury or IRS to put out something that will get overturned by the courts.” Yet in the end, all this scrambling may still be for naught in light of the outcome of our presidential election. Time will tell.

Christine Baker is a managing director of valuation services at Charter Capital Partners.