and Contingency Recommendations This article is authored by two Litigation Forensics Board members who have also created a survey to help practitioners with the process of exit planning. Have you thought about what will happen when you exit your current position or consider selling your practice? Here are some questions to ask yourself: https://www.surveymonkey.com/r/LFBSurvey. Now that awareness has been created, let’s discuss what you need to begin the process. Considerations Cost: depends on what you need and supply yourself. Case file records: all documentation and access to records, computers, etc., and all details so you can continue business to contact…
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Any service can be replicated, leaving only the execution as a true differentiator. And your difference—your winning difference—is the reason people do business with you and not someone else. It sets you apart and makes you the best choice for your ideal client. The author shares three ways to find your winning difference. Any service can be replicated, leaving only the execution as a true differentiator. And your difference—your winning difference—is the reason people do business with you and not someone else. It sets you apart and makes you the best choice for your ideal client. Our leads and prospects…
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The Impact on Payment Rate Updates, Hospital Price Transparency, Rural Hospital Designation, Drug Pricing, and Intensive Outpatient Program On November 2, 2023, the Centers for Medicare & Medicaid Services (CMS) released its finalized Outpatient Prospective Payment System (OPPS) for calendar year (CY) 2024. The finalized payment update increases payments to outpatient facilities and finalizes changes to their hospital price transparency rule, among other provisions. An update to the September 2023 article on the proposed changes to the OPPS, this article discusses the various OPPS changes and updates included in the final rule. On November 2, 2023, the Centers for Medicare…
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Part IV in a Series Addressing Advances in Forensic Accounting and Financial Forensics The increasing amount of data is daunting. Managing and making sense of the vast amount of information is paramount to professionals. In this article, the author shares how he has managed those first impressions and found value using AI and software to understand the information deluge. In the 1990s, the Rubik’s cube craze had died down, but a new one had emerged: The Magic Eye books. People would flip through these books, which seemed to be pages upon pages of nothing but colorful dots, and perhaps see…
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Part III in a Series Addressing Advances in Forensic Accounting and Financial Forensics Those working to manage valuations and investigate fraud are seeing the impact of two trends that emerged in 2023: an increasingly tight labor market and the advancement and adoption of new technologies. The reality is as we enter 2024 and the workforce continues to shrink, the implications of these new technology innovations will only continue to grow. The author shares his views on how the innovation will impact the valuation and forensic professions. Those working to manage valuations and investigate fraud are seeing the impact of two…
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NACVA/CTI BVFLS Conference Presentation Summary This article is a review of a session involving exit planning that was covered in a highly interactive, standing-room-only session from the NACVA/CTI BVFLS Conference in Fort Lauderdale, FL on December 14, 2023. This article is a review of the topics covered in the highly interactive, standing-room-only session from the NACVA/CTI BVFLS Conference in Fort Lauderdale, FL this past December 14, 2023. John Leonetti and Erin O’Leary from the International Exit Planning Association were invited to speak at the December NACVA/CTI BVFLS Conference. The topic of the presentation was ‘From Success Fees to Starting the…
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Who Really Owns the Company!? Have you heard about the Corporate Transparency Act (CTA) Beneficial Ownership Interest Reporting (BOIR) requirements? The penalties for non-compliance are $591(adjusted for inflation) a day up to $10,000 and/or two years in jail. This article outlines the requirements for small private companies and ends with some suggestions for business valuation analysts. Have you heard about the Corporate Transparency Act (CTA) Beneficial Ownership Interest Reporting (BOIR) requirements? The penalties for non-compliance are $591(adjusted for inflation) a day up to $10,000 and/or two years in jail. This article outlines the requirements for small private companies and ends…
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Use in Private-Business Valuation (Part II) This article in this continuing series explains the Implied Private Company Pricing Line (IPCPL), theory, evidence, and application of the IPCPL. How to Understand IPCPL Theory In the first article in this series (published in two parts 02/01/24 and 02/08/24), it was shown that the Implied Private Company Pricing Line (IPCPL) theory explains and predicts the relationship between a capital asset seller’s opportunity cost of capital (OCC) and a buyer’s OCC. That difference is attributable to transaction costs, which is assumed to be a function of the fair market value (FMV) of the capital…
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The Tax Court Says Certified A recent Tax Court opinion brought to light the importance of having an appraiser designation from a professional appraiser organization. While the decision is limited to Tax Court cases, it provides a cautionary tale for all who provide business appraisals in litigious situations. A recent Tax Court opinion brought to light the importance of having an appraiser designation from a professional appraiser organization.[1] While the decision is limited to Tax Court cases, it provides a cautionary tale for all who provide business appraisals in litigious situations. The case involved a charitable contribution of shares in…
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In Your Expert Report This article includes tips for preparing an expert report but is not intended to be all inclusive. In addition to these points, remember to carefully consider professional standards, including those that are non-binding, and any code of ethics. Also prepare your report with the expectation of a Daubert motion or similar challenge to your qualifications and/or methodology. The Federal Rules of Civil Procedure give specific requirements for expert witness reports. In addition, published Tax Court opinions often include criticism of expert reports, thereby providing guidance on what the court prefers to see in the future. Their…
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Praise and Patient Access Concerns Raised from the Cuts On November 2, 2023, the Centers for Medicare & Medicaid Services (CMS) released its finalized Medicare Physician Fee Schedule (MPFS) for calendar year (CY) 2024. While the finalized fee schedule cuts payments to physicians, there are a number of other (more positive) provisions in the final rule. An update to the September 2023 article on the proposed changes to the MPFS, this article explores the various changes and updates included in the MPFS final rule. On November 2, 2023, the Centers for Medicare & Medicaid Services (CMS) released its finalized Medicare…
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In this article, the author shares his views on why it is incumbent to become a specialist. I want to lay this out right up front: The primary reason to specialize is that it is in the best interest of the clients we serve. It allows us to focus solely on them, truly care about them, patiently learn more about them, and create more value based on what they know they need (or what we know they need) … because we’re an expert in the niche. We all start our practices (or positions) as generalists. We have little training, practically…
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How to Manifest a Better, More Fulfilling Valuation Practice Several months ago, a friend of mine gifted the article’s author a book entitled The Seven Spiritual Laws of Success: A practical guide to the fulfillment of your dreams, written by Deepak Chopra. A few of the sections within the book hit home more than others and the excitement that has inspired the author to write the article herein. The author hopes that the article will prompt readers to incorporate more self-exploration into their valuation and forensic accounting practice. Several months ago, a friend of mine gifted me a book entitled…
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Use in Private-Business Valuation (Part II of II) This two-part article in this continuing series explains the implied private company pricing line (IPCPL). Read Part I here. IPCPL explains and predicts how buyers and sellers of capital assets in private markets set risk-adjusted discount rates under conditions of non-zero transaction cost differentials between public and private markets; and, accordingly, IPCPL explains and predicts the shadow price of liquidity risk—the price of liquidity risk were it traded directly in private capital markets. 1.4 What is lacking in existing business valuation theory? It turns out that existing business valuation theory is lacking…
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The Death of Testimonial Overstatement The proper interpretation for the standard of admissibility under the amended Rule 702 of the Federal Rules of Evidence will hopefully result in an evidentiary change that flies in the face of every hired gun’s essence, as the real impact of the trial court truly being a gatekeeper is that it will shield the jury from the testimonial overstatement salaciously proffered by expert witnesses. This 16th article of the unimpeachable neutrality series will take a deeper dive into the potential implications surrounding the up-and-coming amendment to Rule 702 and common risks that this amendment may…
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Use in Private-Business Valuation (Part I of II) This two-part article in this continuing series explains the implied private company pricing line (IPCPL). IPCPL explains and predicts how buyers and sellers of capital assets in private markets set risk-adjusted discount rates under conditions of non-zero transaction cost differentials between public and private markets; and, accordingly, IPCPL explains and predicts the shadow price of liquidity risk—the price of liquidity risk were it traded directly in private capital markets. What is IPCPL Theory? Despite widespread misunderstandings of implied private company pricing line (IPCPL), it can and will be shown in this article…
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Rosenthal v. Erber illustrates the pressure and perils of dueling experts. The expert is charged with assisting the court ascertain the facts, rather than furthering the client’s ambition. The case is a reminder to business valuation professionals that ethical considerations are paramount and that doing the contrary leads to courts’ suspecting the role of experts in the process. In the main, valuation experts pride themselves on reasoned analysis and well supported use of professional judgement. As a profession, valuators are confident that most reports uphold the demanding standards of the profession. Judges, on the other hand, do not always view…
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Forthcoming Changes in Gift and Estate Tax Thresholds In the complex world of gift and estate tax planning, significant changes are on the horizon. The 2026 sunset, a date circled in red on the calendars of tax professionals and high-net-worth individuals, potentially signifies the end of the current, more generous tax-free lifetime estate and gift tax thresholds. The authors share their thoughts on how the upcoming sunset will impact the business valuation profession, the value business valuation professionals bring to the legal profession, and importance of being proactive and current. In the complex world of gift and estate tax planning,…
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Do Not Be Afraid to Innovate This article focuses on how advances in AI and machine learning can aid forensic investigations procedures and further bring the detection of fraud and other financial crimes into the digital age. Introduction In today’s rapidly evolving digital landscape, fraud and financial crime have become an increasingly complex and pervasive issue for organizations, big and small, global, and domestic. Fortunately, advanced technology and artificial intelligence (AI) have emerged as invaluable tools in the fight against malfeasance. By leveraging sophisticated algorithms, data analytics, and machine learning capabilities, combined with traditional forensic accounting principles, these technological advancements…
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Professionals set milestones, yet miss some or many. The author in this article proposes a reason for why goals are not met and proposes a solution in this article. You know what you need to do to grow your practice. You say you’re gonna do them. They are on your to-do list. So why haven’t you done them? Face it, we generally know what we need to do (in almost any situation). But most of us, including me, stumble when it comes to actually getting it done. Here are five things I wanted to do in 2023, but have not…