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IRS Advisory Council Proposes Broader USPAP Adoption, Review of Art Advisory Panel

by User Not Found | Nov 17, 2017

The Internal Revenue Service Advisory Council (IRSAC) met on November 15, 2017. As a Federal Advisory Committee, the IRSAC’s purpose is to serve as an advisory body to the Commissioner of Internal Revenue, and was created to provide an organized forum between IRS officials and representatives of the public for discussing relevant tax administration issues. During the meeting, three areas of concern to the valuation community were addressed.

1. Consider Whether Following USPAP Guidelines Would be Beneficial
The IRSAC believes the appraisal standards, known as the Uniform Standards of Professional Appraisal Practice (USPAP), provide a generally accepted standard of care that, where appropriate, should be followed in broad valuation contexts by taxpayers and the IRS alike. Specifically, to improve the credibility, efficiency, and cost effectiveness of IRS valuations, the IRSAC recommends that the IRS evaluate whether and where it should follow the principles of USPAP.

2. The IRS Should Consider Whether Compliance with USPAP Would Be Helpful in Identifying Expert Witnesses
IRM guidelines for Gathering Information from Third Parties in valuation cases do not consider whether the proposed expert needs to follow the principles of USPAP when evaluating the competency of potential outside contractors. To be consistent and to help avoid unnecessary challenges, the IRS should consider whether outside valuation experts comply with USPAP.

3. Art Advisory Panel
The IRSAC suggests that it would be beneficial to consider restructuring and revising the operating procedures for the Art Advisory Panel. IRS staff art appraisers within AAS should be able to consult directly with individual panel members, as needed, on questions related to a panelist’s particular area of expertise.

ASA applauds IRSAC’s recommendations, and will be following up with the Service to push for adoption of these recommendations.

To read the full report click here; the relevant section of the above begin on page 118.