A few weeks ago, we covered the start of Jim Hitchner’s list of BV myths he is out to bust. One of them is that restricted stock studies and data cannot be relied upon (either solely or along with other methods) to determine a discount for lack of marketability (DLOM) for federal tax business valuations. This is “patently false,” he writes in the April issue of Hardball With Hitchner.

IRS view: From the IRS’ perspective, it appears that nothing has materially changed from its established stance that the use of restricted stock studies for estimating DLOM is an acceptable method. As of this past October, the IRS had no plans to update its DLOM Job Aid the agency issued in 2009, according to a blog post by Mike Gregory (Michael Gregory Consulting), former IRS manager, who worked on the Job Aid. Gregory’s post also includes a list of different types of entities and the various DLOM methods he believes the “IRS may consider more positively in general,” and restricted stock studies are prominently included.

Also in the April Hardball issue, Gregory affirmed that the IRS “continued to accept the benchmark restricted stock studies using the Mandelbaum factors and Stout restricted stock database to determine DLOMs.” He also recommended that valuers should not rely on a single method but should consider multiple approaches.