IRS bars appraisers over Circular 230 violations

BVWireIssue #139-2
April 9, 2014

A group of appraisers have been barred from valuing façade easements for five years under a settlement agreement with the Internal Revenue Service. The IRS accused them of aiding in the understatement of federal tax liabilities by overvaluing façade easements for charitable deduction purposes. The appraisers applied a flat diminution percentage of typically 15% to the fair market values of the underlying properties prior to the donation of the easements. Under the settlement agreement, the appraisers admitted to violating Circular 230 sections relating to due diligence and submitting accurate documents to the government.

Warning: “Taxpayers expect advice rendered with competence and diligence that goes beyond the mere mechanical application of a rule of thumb based on conjecture and unsupported conclusions,” says Karen L. Hawkins, director of the IRS Office of Professional Responsibility, in a release.

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