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Why Accountants Need a CMEA

July 1, 2010

The statements on gift taxes in the IRS Pension Protection Act of 2006 and the aspirational best practices for dealing with the IRS laid out in Circular 230, both of which we’ll discuss in later posts, state the importance of accountants verifying the values of equipment and machinery by securing a certified appraisal. Good accountants want to do what’s best for their clients, and the best thing they can do is to make sure that they are compliant with laws and best practices for dealing with the IRS. And if an accountant relies on something other than a certified appraisal to determine the value of a piece of equipment, his or her client is taking a significant risk. After all, the IRS will disallow a value that is not substantiated. 

To avoid penalties and help eliminate risk of liability for their clients, there are several situations in which an accountant may need to secure a certified machinery or equipment appraisal for a client. These situations include: 

  • Converting from C Corp to S Corp
  • 1031 Exchanges
  • Gifting
  • Sarbanes-Oxley Compliance
  • Determining Property Taxes 

If you’re an accountant seeking a CMEA in your area, take a look at our database.

By: NEBB Institute


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