Cavallaro v. Commissioner – Taxpayers allowed to vet valuations from IRS experts

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Abstract: It’s critical for taxpayers to be given the chance to evaluate whether assessments made by the IRS are “arbitrary and excessive.” This article summarizes a recent gift tax case that the First Circuit Court of Appeals remanded to the U.S. Tax Court for further proceedings related to the valuation of the taxpayers’ business that the IRS relied on when computing its assessment against them — potentially giving the taxpayer a second chance at offering its own valuation evidence. A sidebar discusses why the appellate court wouldn’t shift the burden of proof to the IRS. Cavallaro v. Commissioner, No. 15-368, 1st Cir., Nov. 18, 2016