The American Society of Appraisers’ Comment Letter on Proposed Changes to Circular 230 Published in BNA’s Daily Tax Report

December 3, 2012 (Reston, VA) – The American Society of Appraisers is pleased to announce that a recent comment letter to the Internal Revenue Service on Circular 230 guidance reasonableness standard for practitioner reliance on third party information was published in BNA’s Daily Tax Report on November 26, 2012.

The comment letter, dated on November 7, 2012, is in response to a proposed provision change to code 10.35 and 10.37 under Circular 230.

ASA’s position is that the proposed rules should be changed with respect to the burden for practitioners whose written advice relies on fair market value information contained in an appraisal.

The comment letter states, “the reasonable reliance requirements for a practitioner’s use of appraisals should include clear guidance that says, “when a practitioner, in connection with written advice, relies on an individual who meets the definition of “Qualified Appraiser, “ there is the presumption that the reliance is reasonable and made in good faith unless the practitioner “knows” that one or more representations or assumptions on which any representation is based are incorrect or incomplete.”

Current standards require practitioners to not base written advice on assumptions that are “not unreasonable”, placing the burden of proving that the assumptions in question are unreasonable on the IRS. The proposed change would require practitioners to base written advice on assumptions that are “reasonable.” By requiring that the assumptions be “reasonable”, practitioners would now bear the burden of proof, rather than the IRS.

For more information on ASA’s Government Affairs efforts, contact John D. Russell, JD.

Read the full comment letter