The temperatures in Denver were high—and so were the levels of debate at the Institute of Business Appraisers’ 2007 National Symposium, where brawls supposedly broke out in the session on Quantify Company-Specific Risk (by Keith Pinkerton and Pete Butler), and the four-hour presentation on Tax-Affecting (by Chris Treharne, Dan Van Vleet, and IRS appraiser Leslie Avener) raised more questions than consensus. But hyperbole aside, the word most commonly heard in the hallways was “excellent,” as participants once-again commended the IBA’s teaching format, which provided four hours per session to dig into each topic, eliciting as much education as excitement—even if the discoveries weren’t always pretty.
For example, “The days of vague testimony and vague opinions are over,” said Jack Bogdanski, in his refreshingly clear look at federal tax practice for appraisers. “Not all tax court judges are on the ball, but most of them are”—and most are engaged in the appraisal issues to a new level of intensity and sophistication. But the tax judges are not always getting the outcomes right or deciding consistently with each other, especially in the S Corp and discounts arena. Recent reversals by the 2nd and 5th Circuits, focusing on burden of proof, suggest the days of courts “cobbling” values from the parties’ disparate appraisals may be over as well. “If you’re on the side with the burden of proof,” he said, “your opinion has got to be good.”
Bogdanski also senses an “outright hostility” from the federal bench toward appraisers, an alarming trend apparent in the recent Kimberlin case (May 2007), where the judge documents each mistake by the IRS appraiser, a “former ski instructor” whose testimony “went downhill fast.” For an abstract of the Kimberlin case (which appears in the July 2007 Business Valuation Update™), click here. A complete round-up of the IBA’s excellent symposium will appear in the next (August) issue of the BVU.
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