Qualification of experts in Tax Court--from the judge's perspective
"Credentials don't mean that an appraiser is an expert in all valuation issues," says Judge David Laro, speaking today at the Georgetown Law Center, as part of BVR's Tax and Valuation Summit. "What's important is that the expert has qualification focused on the relevant issues of the case."
Because of this, Judge Laro has prevented experts from testifying in court.
There are, however, 19 Tax Court judges, so one of the tricky Daubert issues is that the definition of expert qualifications (under section 143(g)) can vary depending on who's on the bench. Judge Mary Ann Cohen, who ruled in the Boltar decision that opened the possibility of dismissal of experts, even confirms the fact that she reserves the right to determine the validity of expert testimony on a case by case basis.
"It;s not question of how many articles each expert has written," said Judge Jerry Jacobs. Jacobs looks for the basis of learning by the expert, and whether the argument is logical and makes sense.
"I've participated in three national conferences on this topic, so I know that the leading experts in valuation don't agree on key valuation issues," said Laro. So, by that standard, "many valuation experts do not technically meet the standards of Daubert." He points out that Judge Cohen has challenged the neutrality of valuation experts--another possible issue influencing admissability. That's one of the reasons Laro is troubled when the expert hands notes to the lawyer, or sits behind them, or converses during the trial. "The only solution to this is for more and more challenges of valuation experts," Laro believes.
"I try to explain to every expert in my court that once they walk in the door, they're not working for whoever pays them," Laro says. "They're working for the Court."
"The expert's job is not to be the second or third chair to the lawyer," agrees Jacobs.
"We know who's paying for the expert," says Cohen. "But the standard I want is that the expert's testimony would be the same, no matter which side the expert is hired by."