Valuations of closely held interests are required for many purposes, including estate planning, estate administration, divorce settlements, and litigation support. Many professionals hold themselves as experts for the purpose of preparing valuations. The question is "who truly is qualified as an expert?"

The Internal Revenue Service requires valuations be prepared by "Experts." The Tax Court decision in the case Berg vs. the Commissioner of the Internal Revenue Service (61 T.C.M. 2949 (1991)), lists the qualifications of an Expert. As a result of the Berg case, it is now a "winner take all" approach to valuations. Courts are less inclined to compromise between two valuation opinions and are more likely to accept the more credible valuation in its entirety.

When a valuation lacks competency and credibility, the IRS can reject the valuation. If that valuation substantially under/overstates value, the IRS can assess the taxpayer a penalty.

Experts must

• Be primarily in the business of appraisal,
• Have formal education in appraisal, and
• Be a member of a professional association involved in the education and certification of appraisers.

VSI was specifically formed to meet the credibility and competency standards outlined in the Berg case. VSI exclusively prepares valuations of closely held entities and their respective ownership interests and is owned and staffed by qualified valuation professionals who are not only CPAs, but also CVAs (Certified Valuation Analysts) and members of the National Association of Certified Valuation Analysts ("NACVA").

To increase your chance of success and eliminate a potential penalty, call us for all your valuation needs.