As expected, the new appraiser/appraisal penalties were all the “buzz” at the IRS Symposium. With the enactment of the Pension Protection Act (PPA) last summer—and the issuance of interim guidance in Notice 2006-96 (see BVWire # 49-4), most business appraisers are now clearly aware that the Service is “enhancing practitioner oversight,” as Brenda K. Woolbert, Team Manager (Engineers & Appraisers) puts it, and they are all working “as fast and as furious” as they can. “We need clear, robust, and meaningful standards of conduct.”
The Service also needs business appraisers to help “support the IRS and your profession,” and to this end, the ASA has been a “treasured partner.” Will Frazier (HFBE, Houston), who sat in on Woolbert’s session, adds, “We are all concerned with having good appraisers and appraisals. We recognize there is a problem out there—and that’s the reason we [the ASA] backed the PPA.” Visit the ASA website for more on what constitutes a qualified appraiser/appraisal, including IRS Guidance and ASA interpretation. Or perhaps just heed Commissioner Steven Miller, who provided this pointed advice to appraisers at a recent public land conference:
A donor’s aggressive acts bring discredit to all involved, and the IRS and the Congress to the door. Here is where I will ask for your help. Please exercise prudence. If you perceive that there is something out of whack with a transaction, if it does not pass the smell test—if it is not fairly valued, walk away. Do not accept it, and let us know about it.