The Southern California Chapter of the Appraisal Institute and the CFA Society recently presented the 2013 IRS Valuation Summit at the Century Plaza Hotel in Century City, Calif.

According to David Rosenthal (Curtis-Rosenthal Inc.), who was co-chair of the conference, valuation of partial interest discounts is an esoteric discipline, since prevalent valuation methods act as a proxy for an inefficient market with a dearth of specific market data. Lance Hall (FMV Opinions Inc.) grabbed everyone’s attention with a grim tale of aggressive IRS enforcement in which it recently barred an MAI appraiser from ever providing appraisals for federal tax purposes. This permanent injunction included requiring the appraiser to provide a copy of the order to the Appraisal Institute Ethics and Standards department as well as to all of his current and former clients.

Judge Mark Holmes (U.S. Tax Court) shared his opinion that the most defensible approaches to discount valuation are those that are supported with direct market evidence and are logical and understood by the court.