The Internal Revenue Service Advisory Council (IRSAC) met on Nov. 15, 2017 with representatives of the public and discussed relevant tax administration issues and whether specific USPAP guidelines would be beneficial. During the meeting, three areas of concern to the valuation community were addressed, according to a post on the American Society of Appraisers’ (ASA) website.
The first area dealt with the IRSAC believing that 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, the ASA website post said.
Secondly, the IRS should consider whether compliance with USPAP would be helpful in identifying expert witnesses.
“IRS 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,” the ASA posted. “To be consistent and to help avoid unnecessary challenges, the IRS should consider whether outside valuation experts comply with USPAP.”
The final area of concern was with regards to the art advisory panel where 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.”
The ASA applauds IRSAC’s recommendations urges the adoption of these recommendations.