To protect asset value, consumers must select a qualified and independent appraiser
July 26, 2019
(Washington, DC) – The Appraisal Foundation, the nation’s foremost authority on valuation services, applauds the recent 9th Circuit Court ruling that agreed with a U.S. Tax Court opinion that found an appraisal from an esteemed auction house is not adequate assurance of appraisal expertise or competency.
With this ruling,
the professionalism of personal property appraisers has been confirmed
for the second time by the judicial system in the United States. This is
a game-changer for the primacy of the personal property appraisal
profession, and for protecting consumers from biased and uninformed
appraisals that can result in significant financial repercussions.
“The 9th
Circuit Court ruling is the culmination of dedicated personal property
appraisers who committed to establishing qualifications and standards to
raise the professionalism of the personal property appraisal
discipline,” said David Bunton, president of The Appraisal Foundation.
“The Appraiser Qualifications Board (AQB) published the first
qualification criteria for personal property appraisers in 1998, and
updated it most recently as of January 1, 2018. It is also worth noting
that standards for personal property appraising have been part of the
Appraisal Standards Board’s Uniform Standards of Professional Appraisal Practice (USPAP) since its inception in 1987.”
“Consumers are the
biggest beneficiaries of this ruling. Personal property assets will be
better protected when a qualified and independent appraiser is retained
to value one’s personal property assets,” said John Brenan, vice
president of appraisal issues at The Appraisal Foundation. “This also
means wealth managers and estate attorneys now have a greater fiduciary
duty to their clients to fully understand appraiser qualification
criteria and appraisal standards when vetting personal property
appraisal experts.”
The ruling arises
from the case of Estate of Kollsman vs. Commissioner. The Estate hired a
premiere auction house to conduct an appraisal of the estate’s art
collection. The U.S. Tax Court rejected the valuation of the auction
house expert because of bias and a lack of objective evidence. The IRS
retained the services of a personal property appraiser, who met the
qualifications established by the AQB and completed an appraisal that
was compliant with USPAP.
The IRS appraisal
expert found two of the paintings were significantly undervalued. The
court also found that the auction house expert had a conflict of
interest as the appraiser in question also sought to represent the
paintings at auction. The 9th Circuit Court took the case up on appeal and agreed with U.S. Tax Court opinion.
The
Appraisal Foundation is the nation’s foremost authority on the
valuation profession. The organization sets the
Congressionally-authorized standards and qualifications for real estate
appraisers, and provides voluntary guidance on recognized valuation
methods and techniques for all valuation professionals. This work
advances the profession by ensuring appraisals are independent,
consistent, and objective. More information on The Appraisal Foundation
is available at www.appraisalfoundation.org.
https://www.appraisalfoundation.org/iMIS/TAF/TAF%20Applauds%20Court%20Affirming%20Personal%20Property%20Appraisers.aspx
