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ASA Responds to Kollsman v. Commissioner 9th Circuit Decision

September 03, 2019, 07:05 AM
Filed Under: Industry News

The American Society of Appraisers (ASA) believes the 9th Circuit decision affirming the Tax Court ruling in Kollsman v. Commissioner, in which the Tax Court rejected the unsubstantiated and conflicted valuation provided by a non-appraiser, is correct both as a matter of law and of sound public policy.

The Tax Court, in rejecting the valuation of the petitioner, identified issues both with the objectivity of Kollsman’s valuer (based on a simultaneous offer to sell works at auction), and with the lack of comparable sales support for the opinions of value proffered in the valuation. By contrast, an ASA-accredited appraiser is required to be neutral, impartial and objective when providing an opinion of value, and must follow the Uniform Standards of Professional Appraisal Practice (USPAP), which requires substantiation of an appraiser’s conclusions.

ASA further believes that many of the deficiencies identified with the Kollsman valuer reflect the need for harmonization between the valuation requirements for estate, gift and charitable contribution appraisals within the Internal Revenue Service (IRS). If the IRS were to adopt the same rules for estate and gift appraisals as are currently required for charitable contributions (namely, the use of a “qualified appraiser” providing a “qualified appraisal”), not only would it bring clarity to the area of IRS-related appraisals, it would improve the overall veracity of appraisals used in connection with IRS matters.

ASA’s International President, Douglas R. Krieser, ASA, expressed the following thought when asked about the affirmation of Kollsman: “I think it’s a win for good, competent appraisers who adhere to high professional and ethical standards, and should be the exemplar for why a move to harmonize valuation requirements across the Service is a common sense move to make.”

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