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CEO's Message—Fourth Quarter 2017

NACVA Association News

Treasury Secretary, Steven Mnuchin, Withdraws Proposed IRC Regulation 2704


Parnell Black, MBA, CPA, CVA
Chief Executive Officer 

The valuation profession can take a sigh of relief knowing that the Treasury Department and the Internal Revenue Service have become enlightened with regards to the disastrous Regulation proposed in August, 2016, pursuant to Internal Revenue Code (IRC) §2704, when on October 2, 2017, Treasury Secretary Mnuchin proposed it be withdrawn.  The proposed changes to IRC §2704 could have effectively eliminated discounts for lack-of-control and lack-of-marketability in family owned businesses.  They essentially ignored economic realities and would, if finalized, work to artificially inflate values for a specific targeted group of taxpayers and not others (and therefore not be applied uniformly to all citizens).  Further, the Proposed Regulations would have negatively impacted small business owners and family owned businesses, with the ultimate effect of putting many of those enterprises out of business.

NACVA, in its leadership role supporting the valuation profession, pushed very hard to make our voice heard—first with a detailed commentary entitled, “Comments Regarding Proposed Treasury Regulation” submitted to the Department of the Treasury on October 27, 2016; then by attendance to a public hearing in Washington D.C. on December 1, 2016, where four of our member representatives spoke; and finally, with a letter to the Treasury dated August 7, 2017, reiterating our position that these Proposed Regulations “would result in changes to valuation methodologies which do not reflect reality, which violate generally accepted valuation methodology, which result in changing many years of United States settled tax law, and other problems.”

In the end, our hard work and diligence paid off by preventing a change to our tax code that would have harmed hundreds of thousands, if not millions, of taxpayers, and drastically altered the landscape of the valuation profession and solidly rooted methodology.  Overall, the Treasury received nearly 30,000 formal comments.  However, it is noteworthy to say, NACVA had the most representatives of any organization attending the public hearing in D.C., which is further proof of our leadership in our profession, just how seriously we view our role, and how determined we are in looking out for our membership’s best interests.

Present in D.C., and leading NACVA’s charge (and to whom I am eternally grateful) were:

            Peter Agrapides, MBA, CVA                                       Mark Hanson, CPA, CVA, ABV
            Filotimo Capital Consultants, Inc., UT                         Schenck SC, WI
            peter@fccval.net                                                         mark.hanson@schencksc.com
           
Robert Grossman, MS, CPA, CVA, ASA                     Robert Weinstock, JD, CVA
            Grossman Yanak & Ford LLP, PA                               Strategic Valuation Group, CA
            grossman@gyf.com                                                     rweinstock@svgvalue.com

Special acknowledgement must go to the former chair of our Standards Board:

            Carl A. Steffen, CPA, ABV, CFF, CVA, ASA, CBA, ABAR
            WSRP, LLC, UT
            csteffen@wsrp.com

Other contributors to this large undertaking are:
 
Marc Bello, CPA, ABV, CFF, CVA, MAFF, MST
Former Chair, NACVA Litigation Forensics Board
Edelstein & Company, LLP, Boston, MA
mbello@edelsteincpa.com
 
Karen Boulay, MBA, CPA, CVA
Former Chair, NACVA Valuation Credentialing Board
Melanson Heath & Co PC, Nashua, NH
kboulay@melansonheath.com
 
Kristopher A. Boushie, CPA, ABV, CFF, CVA, CFE
Former Chair, NACVA Executive Advisory Board
NERA Economic Consulting, Washington, DC
kristopher.boushie@nera.com
 
Larry Settles, CPA, ABV, CrFA, MAFF
Chair, NACVA Litigation Forensics Board
Lord & Settles, LLC, Combine, TX
larry.settles@gmail.com
 
Rebekah Smith, CPA, CVA, MAFF, CFF
Chair, NACXVA Executive Advisory Board
GBQ Partners LLC, Columbus, OH
rsmith@GBQ.com
 
Paul Wonch, MBA, CPA, ABV, CVA, MAFF
Former Chair, NACVA Ethics Oversight Board
Wonch Valuation Advisors, LLC, Indianapolis, IN
pwonch@wonchvaluation.com
 
David Zarlenga, CVA, CFE
Chair, NACVA Ethics Oversight Board
H & J CPAs, Concord, OH
dave.zarlenga@h-jcpa.com
 
Everyone listed above deserves heartfelt thanks from our membership which is why I have included their e-mail addresses.  Please take a couple minutes of your time to let each know how much they are appreciated.

Thank you,

Parnell Black, MBA, CPA, CVA
Chief Executive Officer