For now, the IRS appraiser penalties are retrospective, “applying sanctions based on the past behavior and its impact on the taxpayer case,” says Carolyn Gray, Technical Advisor to the Director Office of Professional Responsibility. “The IRS will have to amend Circular 230 in light of the PPA provisions, both to eliminate reference to the threshold requirement [definition of qualified practitioners] and to provide a framework for determining the types of appraiser behavior that may warrant the prospective sanction of disqualification.”

In the meantime, Gray reminds appraisers who are also CPAs that they may very well fall within the threshold requirements of Circular 230, and qualify as a “practitioner.” Her advice: Read Regulation 10.22, concerning a practitioner’s due diligence requirements, which is on page 16 of the official publication of Treasury Department Circular No. 230; the current definition of a qualified “practitioner” is on page 4. For a copy, click here.