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Practice Before The Irs

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Michael S

Senior Member
Joined
Mar 18, 2009
Professional Status
Certified General Appraiser
State
New Mexico
I was speaking to a CPA today and he mentioned a local appraiser he had used in the past who recently passed away. He said that he was licensed or certified or qualified (something to that effect) to practice before the IRS and that he was able to get a considerable amount of work based on this. He indicated that might be a niche I could look into. I spent some time looking through the IRS website and I found references to appraisers practicing before the IRS (along with attorneys, CPAs, retirement plan agents, and actuaries).

It doesn't appear there's any sort of certification or registration involved in this. An appraiser just has to meet minimum requirements that basically boil down to competency, education, and experience. Being designated (MAI for example) is treated as prima facie evidence of such but it also appears just being a certified appraiser is sufficient.

Does anyone have any insight on this or do a lot of work for CPAs that involve appraisals for IRS related matters? Are the fees generally comparable to other clients like lenders? Better, worse? I like to think I produce above-average quality appraisals and would like to branch out from my current client base of primarily lenders. Work from CPAs or tax attorneys for submission to the IRS sounds like it could be a good niche.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
I do a lot of work that ends up in tax situation, but it isn't really "for" the IRS. They only require a copy of your report when property over $5,000 is gifted and they require a copy attached to the 8283 filing. I just did one of those where a fellow was gifting land to a land trust for the environment. For estates, I have never heard of many going to the IRS. The worst one I did was a fellow who died just at the very peak of the market (2006) and his estate had to be valued even though I could see the prices dropping. He owed the IRS some $5 million, lost his entire empire and ranch that was in three counties. Sadly by the time that the property went to auction (2011), some property sold for less than or barely above its tax burden (35% rate). But I never heard a peep from anyone. The IRS I am sure was happy with it...

Estate work is by far the best work around. Summary report, no one questions your fees, you are given how ever long you need usually, and you actually feel like you provide a needed, respected, and valuable service. There is never a what if or cost to cure. It is strictly "as is" on the date of death. So if you have good comps from the past, you don't even have to look up the most recent sales.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
I don't know of any "certification" specific to the IRS and I assume it's much like qualifying as an expect in court. I also concur that estate work is good; however, the appraiser should be prepared to appear in court in defense of the appraisal if the estate is contested. If you are interested in doing that I would suggest you prepare a marketing brochure outlining your qualifications and mail it to all of the attorneys in your area that handle estates. It usually takes two or three mailings before you get a response. If you do a good job on a couple of cases the work starts coming in.

Years ago my partner and I did that and I landed a couple of attorneys who used us regularly. Once I got the the VA panel I quit looking for outside work but still get one or two a year. You can do the same thing with divorce lawyers too. Always asked for at least half the fee up front. Even better, collect the entire appraisal fee up front. Also have an engagement letter that spells out your fees if you have to appear in court.
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
The Internal Revenue Code (IRC) is the body of tax laws that the IRS enforces. Section 170(f)(11)(E) of the IRC provides definitions of a “qualified appraisal” and “qualified appraiser.”

A “qualified appraisal” means one that is:
“…treated for the purposes of [the IRC] as a qualified appraisal under regulations or other guidance prescribed by the Secretary, and…is conducted by a qualified appraiser in accordance with generally accepted appraisal standards and any regulations or other guidance prescribed…”

A “qualified appraiser” means an appraiser who:
“…has earned an appraisal designation from a recognized professional appraisal organization or has otherwise met minimum education and experience requirements set forth in regulations prescribed by the Secretary…regularly performs appraisals for which the individual receives compensation, and…meets such other requirements as may be prescribed by the Secretary in regulations or other guidance.”

AND SEE>>

https://find.irs.gov/c/search?affil...uery=real+property+qualified+appraiser&utf8=✓
 
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Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
In practice the court would qualify you (or rather your attorney would qualify you to the court and the judge would say yea or nay). There are a lot of appraisers who have experience and education and no license nor certification that are qualified before a court to "do" what they do largely because they were qualified years before licensing.

Again, for tax purposes in an estate the client is not the IRS nor are they an intended user (they are an intended user for a claim for a gift deduction and certain language has to be included in the report along with the proper IRS definition of "Fair Market Value".) The estate claims the value of the property, and if the IRS wants to contest that then they send their own valuers out to check on the claim without any reference to the estate's expert.

The one I mentioned above, again, I never heard a peep. The heirs knew that the property fell in value from the date of death and were in no position to not dispose of a portion of it to service the estate taxes. The "old man" was a super grouch who thought he knew everything and refused sound advice to transfer property into trusts and the like. Instead it was all basically in three separate corporations he controlled 100% thus was all lumped into one for the estate. One was about 22 farms/ranches operated separately and each valued separately. One was probably the largest single parcel undivided by a road in the county. And it just sold again for more than double the price it bought in 2011. Sadly, it will now be cut up into smaller parcels.
 

Michael S

Senior Member
Joined
Mar 18, 2009
Professional Status
Certified General Appraiser
State
New Mexico
I was taking some online CE yesterday and there was a link to an article by a business/real estate appraiser who had a bunch of credentials (MAI, ASA, some other BV designations I'd never heard of). One was that he was an enrolled agent with the IRS. I looked that up and it appears to require passing three tests and you can basically represents someone before the IRS the same as a CPA or tax attorney. That might have been what the CPA I was talking to meant.
 
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