Earlier this year, the IRS issued a memorandum that described changes to the way the IRS reviews appraisals prior to imposing a civil money penalty for valuation misstatements under IRC Section 6695A. This change reduced the number of individuals involved in the decision to impose the penalty. The appraisal community was concerned that this change could result in a penalty being imposed without having anyone with valuation experience review the appraisal (see our coverage here). Now, the IRS has come out and said that appraisers should not be concerned.
IRS speaks: Individuals with valuation experience and credentials will continue to do appraisal reviews, according to Cheryl Teifer, IRS director, field operations engineering. Tiefer made her remarks at last week’s American Society of Appraisers (ASA) 2020 International Conference.
BVWire reached out to the ASA for comment (the ASA was one of the signers of a joint letter to the IRS and Treasury expressing concern over the change). “While we appreciate IRS staff sharing that appraisers continue to be heavily involved in reviews prior to the imposition of a Section 6695A valuation misstatement penalty, our strong preference is for those verbal reassurances to be reduced to writing,” says Lorrie Beaumont, ASA international president. “That way, valuation professionals can have written confirmation regarding how the process works and who is involved.”
BVWire will keep you updated on any developments in this issue. And we’ll have more coverage of the ASA conference in the next issue.
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