New academic research suggests that there may be more behind a Tax Court estate tax valuation than simply “splitting the baby,” and it’s not just the increasing sophistication of the court, counsel, and BV experts. Using models from prior literature as well as an updated data set, the authors of the just-posted article “Asset and Business Valuation in Estate Tax Cases: the Role of the Courts” investigated “whether there are certain factors related to the case, the judge, and the economic environment that might influence the judge’s decision.”
What they found: “Evidence . . . suggests that the number of appraisers used by the taxpayer, the gender of the judge, the type of asset being valued, and the size of the U.S. deficit are related to the decision of the court,” conclude Professors Mark Jackson, Sonja Pippin, and Jeffrey Wong, all from the University of Nevada (Reno), who examined 152 decisions from 1986 through 2009. “The court cases indicate that judges sometimes reject the credentials of the taxpayer’s appraiser and other times that of the IRS’s expert,” the authors noted; “we therefore believe that on average each side’s experts are given equal value.”
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