Attorney-at-Law

THE FACADE COLLAPSES

In Uncategorized on 03/21/2014 at 17:03

You might remember all the blogposts I expended on the subject of appraisals of facades (I counted ten of them, but maybe there are more), in connection with the Section 170(h) giveaway.

Well, those who played fast-and-loose with the numbers, or pulled numbers from thin air, or who otherwise have been deemed by Karen Hawkins and her myrmidons at OPR to have transgressed, have been sent to the penalty box for an extended stay.

Check out IR-2014-31, 3/19/14. It’s a five-year vacation for the unnamed malfeasors.

As the IRS press releasors put it: “The appraisers agreed to a five-year suspension of valuing facade easements and undertaking any appraisal services that could subject them to penalties under the Internal Revenue Code. The appraisers also agreed to abide by all applicable provisions of Circular 230.

“‘Appraisers need to understand that they are subject to Circular 230, and must exercise due diligence in the preparation of documents relating to federal tax matters,’ said Karen L. Hawkins, Director of OPR. ‘“Taxpayers expect advice rendered with competence and diligence that goes beyond the mere mechanical application of a rule of thumb based on conjecture and unsupported conclusions.”’

Apparently the defrocked appraisers were the Mark Primoli safe-harborers.

“The appraisers prepared reports valuing facade easements donated over several tax years. On behalf of each donating taxpayer, an appraiser completed Part III, Declaration of Appraiser, of Form 8283, Noncash Charitable Contributions, certifying that the appraiser did not fraudulently or falsely overstate the value of such facade easement. In valuing the facade easements, the appraisers applied a flat percentage diminution, generally 15 percent, to the fair market values of the underlying properties prior to the easement’s donation.

“Specifically, the appraisers admitted violating Circular 230, Section 10.22(a)(1), for failing to exercise due diligence in the preparation of documents relating to IRS matters, and Section 10.22(a)(2) for failing to determine the correctness of written representations made to the Department of the Treasury.”

The appraisers consented to the press release, from which the foregoing is excerpted. Devotees of the Rule of Completeness can check out the whole story at:

 http://www.irs.gov/uac/Newsroom/IRS-Bars-Appraisers-from-Valuing-Facade-Easements-for-Federal-Tax-Purposes-for-Five-Years

 

 

 

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