IBA’s Howard Lewis Presents to IRS on Appraisal Regulation, Penalties
Lewis, executive director of the Institute of Business Appraisers, once served as national program director for valuation services at the IRS; joins other appraisal stakeholders to offer feedback on IRS section 6695A penalties
02.18.2010 – PLANTATION, FLORIDA – The Institute of Business Appraisers (IBA), the oldest professional society devoted solely to the appraisal of closely held businesses, today announced that its executive director, Howard Lewis, will meet with the IRS Office of Servicewide Penalties (OSP) this Thursday, February 18th, in Washington D.C. The IRS has requested that Lewis, and other stakeholders from the appraisal and valuation industry, offer feedback and policy guidance on IRS section 6695A penalties, which may be assessed against appraisers for substantial and gross valuation misstatements attributable to incorrect appraisals.
“The Institute of Business Appraisers has established itself as a leader in the appraisal industry by establishing important standards, promoting ongoing professional education, and building the deepest, richest set of business comparables available on privately held businesses, ” said Howard Lewis, executive director of the Institute of Business Appraisers. “Ongoing dialogue with the IRS and other appraisal professionals is an important way the IBA helps government and business communities work together to maintain fairness and clarity in the tax code and establish appropriate standards of professional conduct.”
IRS section 6695A penalties, introduced in recent years, assess penalties against appraisers for substantial and gross valuation misstatements attributable to incorrect appraisals. In preparation for Thursday’s meeting, Lewis surveyed thousands of IBA members about their experience with penalty investigations and assessments, areas of concern, and the appropriate use of the “exception standard” in the section, which allows appraisers to be exempted from penalties if they can show that the values they assessed were “more likely than not” the correct value. In Thursday’s meeting with the IRS Office of Servicewide Penalties (OSP), Lewis will convey his findings, and offer his own insight into the law.
Over decades, the IBA has built a database of appraisal comparables that is more than three times the number of comparables of its closest competitor. Its set of comparables, which it offers online (visit http://www.go-iba.org/pdfs/MemberApplication.pdf), includes more than 33,000 comparables across hundreds of SIC and NAICS code. Standard data sets include Price/Sales, Price/EBT, SIC, NAICS, Location, Annual Gross, Annual Earnings, Owners Comp, Sales Price, Business Description, Sale Date, and Geographical area. Today’s IBA product includes expanded data—fifteen asset fields (for one year) and 16 income statement fields (for three years), and is available online for a $445 annual license fee.
About IBA:
The Institute of Business Appraisers is the oldest professional society devoted solely to the appraisal of closely held businesses. Established in 1978, the Institute was the original pioneer in business appraisal education and professional accreditation. The Institute of Business Appraisers is committed to providing the highest quality of service to our members to assist them in a journey to professional excellence in the field of business appraisal. IBA’s goal is to provide a supportive and nurturing environment for each member through IBA’s resources including technical support, market data, professional certification and practical education in all aspects of appraisal of small and mid-size businesses. In fulfilling this mission, IBA Headquarters staff is assisted by the generosity of the many volunteers who provide professional mentoring, report review, instruction and technical publications for the enhancement of the profession. Visit www.go-iba.org