Fair value forum 8 am 1 20-2012

Fair Value ForumJanuary 20, 2012 ©

Michael GregoryMichael Gregory Consulting LLC

www.mikegreg.com

http://www.mikegreg.com/

Michael Gregory Consutling LLC www.mikegreg.com ©

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Presenter

• Michael Gregory, Michael Gregory Consulting LLC since September 2011

• Formerly IRS 28 Years as Engineer and Valuer, Manager, Operations Team Lead, Controller, Acting Assistant District Director, Territory Manager

• ASA, CVA, MBA, PE, Qualified Neutral, PE• [email protected] 651-633-5311

January 20, 2012

mailto:[email protected]


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Michael Gregory Consulting LLC

• Risk Management• Alternative Dispute Resolution• Strategic Planning• Could be of Service to You and Your Clients

January 20, 2012


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Disclaimer

The opinions presented here are those of Michael Gregory. Michael Gregory does not represent the IRS. Any opinions presented in this seminar are those of the author and do not represent an official position of their current or previous employers. This material is offered for educational purposes only. The author and his employer expressly disclaim any liability, including incidental or consequential damages, arising from the use of this material or any errors or omissions that may be contained in it.

January 20, 2012


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Discussion Today

• Quick Overview on IRS • Topics of Interest– 409A– DLOM– Tax Affecting Subchapter S Corporation Valuations

• Some Stories with New Venture

January 20, 2012


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IRS

• Eleven Divisions• Compliance – Four Divisions• Appeals• Counsel – IRS and DOJ Tax Litigation Division• Of Your Primary Interest as Valuers– LB&I– SBSE– TEGE

January 20, 2012


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IRS.gov

• Businesses• Starting a Business• Operating a Business• Closing a Business• Employer ID Numbers• Small Business Events• Industry Professions • Audit Technique Guides – Aerospace to WineJanuary 20, 2012


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Large Business and International

• Six Industries and One Support Function• CTM, FS, HMT, NRC, RFPH, GHW, • Field Specialists– Engineering and Valuation– Employment Tax– Computer Audit Specialists– Financial Products

• Counsel

January 20, 2012


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Engineering and Valuation

• Internal Consultants to All Divisions• Four Territory Managers• 32 Managers• 320 Technical Employees• Ron Cerruti Territory Manager West Coast• Know Who Your Local Valuers and Managers

Are• Invite Them to Speak with You

January 20, 2012


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Small Business and Self Employed

• Examination– General – Estate and Gift• Classification Process• Owner

• Collection• Counsel

January 20, 2012


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Tax Exempt and Governmental Entities

• ESOP’s• Related for Profit Entities• Gifts in Kind• Services Provided• Reasonable Compensation

January 20, 2012


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Appeals

• Case Closes Out of Examination Unagreed and Goes to the Internal IRS Appeals Divsions

• Goal to Settle Cases• 85% Target• Independent• Ex Parte Rules

January 20, 2012


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Counsel

• IRS Office of Chief Counsel– Appointed by the President

• Operations• Technical

– All Non Litigation Work (legislative, regulation, interpretation)– Corporate– International– Technical Advice

• IRS Division Counsel• IRS Special Trial Counsel• DOJ Tax Litigation DivisionJanuary 20, 2012


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Enough On BackgroundLet’s Move on to the Fun Stuff

January 20, 2012


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409A

• Approach• Auditors• Valuation• AICPA Guide now Under Revision Draft: See

Old and New Draft• Training• Key Pockets

January 20, 2012


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Discount for Lack of Marketability

• Job Aide Discounts for Lack of Marketability– History– Purpose– Impact

• Follow Up• Pluris, FMV, Valuation Advisors, John Finnerty,

Ashok Abbott• Judges Conference

January 20, 2012


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Tax Affecting Subchapter S Corporations

• Adjustment for a Subchapter S Corporation• Critique of Methods– Fannon– Grabowski– Mercer– Treharne– Van Vleet

• Reasonableness at IRS• Estate and Gift vs Valuer CommentaryJanuary 20, 2012


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Discuss Some Examples

• SBSE Examination Case with E&G on Exam• SBSE Examination Case with Counsel• SBSE Case at Appeals• LB&I 409A• LB&I Stock Options and Stock Valuations• LB&I Purchase Price Allocations• 6695A Appraiser Penalties

January 20, 2012


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Important Take Away Information

• Know Who Your Working with at the IRS• Understand the Role of Participants• Seek to Understand Interests• Do Not Be Afraid to Ask Questions• Consider Options– Ask for a Valuer– Ask to Elevate in Management as a Neutral Party

Given Ownership of the Issue by the RA or ETA

January 20, 2012


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Book Coming Out in May

• “How to Work with the IRS – Field Specialists and Revenue Agents

• Note Business Valuers are within Field Specialists

• Analogy with International Examiners and Economists

January 20, 2012


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What Are Your Thoughts and Questions

January 20, 2012