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ESOP appraisals by CPA firms.

At a 1994 panel discussion sponsored by the ESOP Association, the employee stock ownership plan (ESOP) requirements for independent appraisers were discussed.

Practitioners wanted to know the conditions for meeting these requirements by outside CPA firms providing audit and tax services to an employer. According to a projects leader for the IRS Employee Plans Technical and Actuarial Division, a firm will be treated as an independent appraiser (under Sec. 401(a)(28)(C)) if all of the following conditions are met:

* The firm represents itself to the public as an appraiser or performs appraisals on a regular basis. * The firm has a separate valuation division. * The valuation division performs services for a significant number of other companies. * Performance of the valuation does not cause a reasonable person to expect the appraiser to overstate the value of the employer's securities.
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Title Annotation:employee stock ownership plan
Author:Janicki, Michael
Publication:The Tax Adviser
Article Type:Brief Article
Date:May 1, 1995
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