Halpern also reminded BV appraisers that the U.S. Tax Court follows its own rules and procedures, analogous to but also departing in significant ways from the Federal Rules of Civil Procedure. Rule 143(g)(T.C.R.), for example, provides that unless the court otherwise permits, an expert’s complete direct testimony is set forth in his/her written report. What this means: “You may not get to open your mouth in my courtroom,” Halpern said. Only if the other side asks for cross-examination will the judge get to hear a “peep” from the expert.

Trial attorney John Porter (Baker Botts LLP), a featured speaker at the recent annual meeting of Valuation Roundtable of San Francisco, seconded the judge’s reminder, advising appraisers to read (and re-read) Rule 143(g). “Even when an appraisal will only initially be used to establish the fair values of an asset in connection with the filing of a tax return, the appraisal report should be in a form which will allow the report to be introduced in subsequent litigation,” Porter said. “Preparation of the report with this potential end-use in mind is not difficult and will avoid the need to have the appraiser prepare a new or revised report in the event the matter proceeds to trial.” Given its importance in any appraiser’s reference library, we’ve made the entire text of Rule 143 (T.C.R.) available as a free download: click here.