Tax Court Says IRS Standards Too High for Qualified Appraisal

In Friedberg v. Commissioner, the Tax Court rejected the claim by the IRS that the appraisal submitted by the taxpayer was not qualified because it wasn’t reliable, and improperly applied the methodology to value a property.  In the Tax Court’s ruling, it stated that the appraisal was “qualified” as defined in Treasury Regulation 1.170A-13(c)(3) and rejected the IRS’s attempt to disqualify the appraiser.  In a deposition, the appraiser admitted that he had never valued certain development rights that were part of his valuation of the easement.  The IRS presented this information as evidence to discredit the appraiser, but the Tax Court held that the appraiser need only declare that he or she is qualified, and that this statement meets the qualified appraiser standard under the treasury regulations.  In this case, the Tax Court held that the appraisal was qualified because it stated its methodology and outlined the specific basis for the conclusion.  In doing so, it had met the technical requirements of the regulations, regardless of whether it was accurate or reliable. For the full details on this case, you can read the full story at AL.com.