Unavailable Appraiser Results in High Taxes for Taxpayer

A taxpayer ended up owing a lot more taxes when his appraiser didn’t show up at his hearing.  In Estate of Tanenblatt v. Comm’r, the taxpayer contested the high value used by the IRS of an LLC of which he had a 16.667% interest.  The taxpayer attached a second appraisal with a lower value for the LLC along with his Tax Court petition.  At trial, the taxpayer was unable to produce the second appraiser as an expert witness because of a fee dispute.  Thus, the Court excluded the second appraisal and accepted the IRS’ appraiser’s high valuation of the LLC resulting in a much higher tax liability for the taxpayer.

See Kathy Sherby & Stephanie Moll, “Life (and Litigation) Lesson of the Day: Don’t Bite the Hand That Feeds You,” Bryan Cave: Life, Death and Taxes (July 3, 2014).

Posted by David Song, Associate Editor, Wealth Strategies Journal