IRS sending agents to NACVA’s BV training

BVWireIssue #230-1
November 3, 2021

federal taxation
estate valuation, reasonable compensation, tax affecting, discount for lack of marketability (DLOM), fair market value (FMV), minority discount, internal revenue service (IRS), income tax

The IRS is sending 79 agents to business valuation training provided by the National Association of Certified Valuators and Analysts (NACVA), according to former IRS manager Michael Gregory (Michael Gregory Consulting LLC). At his session at the ASA International Conference in Las Vegas, he noted that the past few years have been tough for the IRS. The government shutdown, budget cutbacks, and the pandemic have created a staff shortage, so the agency now has much fewer agents doing valuation work—about half of what it had back during the 2008 economic downturn. The IRS must meet quantity goals in terms of audits, but, with less staff, the quality of the audits will suffer. Auditors will target low-hanging fruit—the No. 1 target is the discount for lack of marketability (DLOM), especially if DLOMs are being increased without adequate explanation. Also on the agency’s radar are reasonable compensation and tax affecting pass-through entities. Gregory worked for the IRS for almost 30 years (much of the time dealing with valuation matters) and he is now in private practice. He is the author of several books, including Business Valuations and the IRS: Five Books in One.

Extra: Today, November 3, Gregory gives his 25 “golden” suggestions to business valuers the IRS is auditing in a webinar—click here to register.

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