The IRS is poised to “ratchet up” its oversight of the appraisal community: First there was Circular 230, then the Pension Protection Act (PPA) of 2006 this past summer—followed by the almost lightning speed with which the Service issued Notice 2006-96, its interim guidance on the “qualified appraiser/appraisal” provisions of the PPA (see BVWire # 49-4). (And by the way, the IRS just issued Notice 2007-07, its “extensive guidance” on several PPA rules relating to distributions from tax-qualified retirement plans.)
But here’s the good news for BV analysts: On January 17, 2007, the IRS met with representatives from all four accrediting organizations (AICPA, ASA, IBA, NACVA) as well as those from the Appraisal Foundation, the Appraisal Institute, and others, to discuss the “professional responsibility of a valuation analyst under the [PPA],” according to Tom Hilton (Anders Minkler & Diehl, LLP), a panelist on BVR’s recent telephone conference on BV Standards.
“The IRS is in the process of developing guidelines for the professional responsibilities of appraisers pursuant to Treasury Circular 230,” confirms Mike Crain (FVG International), who represented the AICPA at the Washington, D.C. meeting. “The IRS solicited input and feedback on those guidelines,” he adds, which are now in the drafting stages.
In all likelihood, the discussions will lead to broad guidelines regarding appraiser practice before the IRS—including substantial adherence to USPAP standards; and further down the road, revisions to the ethical requirements contained in Circular 230. “[Our profession] is no longer the Wild West,” Hilton says. “These folks are serious, and it’s a wake up call for all of us.”
For a full transcript and/or CD of BVR’s telephone conference, which includes more commentary on IRS initiatives and convergence of BV standards by panelists Ed Dupke, Jay Fishman, and "master" moderator Ron Seigneur, click here.