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IRS Provides Critical Insights to Attendees of ASA’s International Conference

Nov 02, 2020

 
As the closing session to the 2020 ASA International Appraisers Conference, three IRS employees provided updates and insights regarding several critical issues. Cheryl Teifer, Director, Field Operations, Engineering Eastern Compliance Practice Area, LB&I; Sharyn Fisk, Director, Office of Professional Responsibility; and Brendan O’Dell, Promoter Investigations Coordinator, participated in the panel and offered information relevant to all session attendees, including:

  • Despite recent guidance reducing the number of managers who must sign off prior to the imposition of a Section 6695A valuation misstatement penalty, IRS staff shared that appraisals continue to be reviewed by multiple IRS appraisers in the Service’s Engineering division before a penalty is imposed.
  • IRS offered their ongoing concerns with syndicated conservation easement transactions, including with appraisals performed in connection with syndicated deals, and encouraged appraisers to be diligent before taking on these kinds of jobs. IRS additionally indicated that they continue to see significant legitimate conservation easement work, and indicated that appraisers are best served by providing ample detail in support of their conclusions in the appraisal report so as to avoid the increased scrutiny on conservation easement deductions as a whole.
  • IRS flagged as an area of concern bargain sale transactions, and alerted conference attendees as to the red flags to watch out for if they are approached to perform an appraisal in connection with a bargain sale.
  • Despite differences in statutory language, IRS clarified that it views the requirements for performing appraisals in connection with estate, gift, and noncash charitable contribution tax deductions to be functionally equivalent, and that appraisers should not expect differing levels of scrutiny as to their credentials or work based on the underlying transaction.
  • IRS staff discussed numerous ways for appraisers to raise concerns with valuation work being done in front of the Service and indicated ongoing hiring for valuation professionals through the usajobs.gov portal.
  • Finally, when asked if IRS would adopt the IRS Advisory Council recommendation that the Uniform Standards of Professional Appraisal Practice (USPAP) as the relevant standard for tax-related valuation work, they indicated they were not familiar with the recommendation but would look into the matter.

ASA and the attendees of the 2020 International Appraisers Conference wish to thank Cheryl, Sharyn, and Brendan for taking the time to participate in the closing session, and for the depth of information provided during the session.