The Appraisal Foundation (TAF) applauded the recent Ninth Circuit Court of Appeals ruling that agreed with a U.S. Tax Court opinion which found an appraisal from an esteemed auction house is not adequate assurance of appraisal expertise or competency.
With this ruling, the professionalism of personal property appraisers has been confirmed for the second time by the judicial system in the United States, TAF announced in a press release.
This is game-changer for the primacy of the personal property appraisal profession, and protecting consumers from biased and uninformed appraisals that can result in significant financial repercussions, TAF said.
“The Ninth Circuit court ruling is the culmination of dedicated personal property appraisers who committed to establishing qualifications and standards to raise the professionalism of the personal property appraisal discipline,” TAF President David Bunton said in the release. “The Appraiser Qualifications Board (AQB) published the first qualification criteria for personal property appraisers in 1998, and updated it most recently as of Jan. 1, 2018. It is also worth noting that standards for personal property appraising have been part of the Appraisal Standards Board’s Uniform Standards of Professional Appraisal Practice (USPAP) since its inception in 1987.”
TAF Appraisal Services Vice President John Brenan spoke to those who benefit the most from the court’s decision.
“Consumers are the biggest beneficiaries of this ruling,” Brenan said. “Personal property assets will be better protected when a qualified and independent appraiser is retained to value one's personal property assets. This also means wealth managers and estate attorneys now have a greater fiduciary duty to their clients to fully understand appraiser qualification criteria and appraisal standards when vetting personal property appraisal experts.”
The ruling arises from the case of Estate of Kollsman vs. Commissioner. The estate hired a premiere auction house to conduct an appraisal of the estate’s art collection. The U.S. Tax Court rejected the valuation of the auction house expert because of bias and a lack of objective evidence. The IRS appraisal expert found two of the paintings were undervalued significantly.
According to the release, the court also found that the auction house expert had a conflict of interest, as the appraiser in question also sought to represent the paintings at auction.