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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 7097
Experience:  Extensive Experience with Tax, Financial & Estate Issues
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I don't know if you can help me or not, but this window

Customer Question

I don't know if you can help me or not, but this window opened so I will try.
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: Thank you. In 1996, my mother passed away, leaving me as her only benefactor. I was young and naïve at the time, and all kinds of people stepped in to help. A friend of mine sent a Mr.John M. Granger, to do appraisals on two pieces of property...one, my residence on one acre in Mesa, Arizona; the other, which I can't seem to locate, was on a 10 acre parcel of desert property that had quickly gained in value since purchased by my parents in the 70's for $45,000. I am looking now at the residence appraisal, and feel it is half the value of the home and acre in 1996? I recall being shocked at how low he had put the desert property at, but never questioned it. It was sold in 2002 for One million dollars. I have had a lot of health problems since that time, I have also been indebt to the IRS for many years. I have heard of "forensic" appraisals done for similar situations? Would it be worth my time to pursue this? I have John Granger's State certification #, but no other information. I feel so stupid. I do remember at the time, looking at the two appraisals and thinking they were way off, but I did nothing about it. I thought maybe he was trying to keep them low for my benefit in terms of the $600,000 mark, but I was never anywhere close to that?
JA: Is there anything else the Accountant should be aware of?
Customer: I'm not really sure, I am not as smart or confident as I once thought.
Submitted: 5 months ago.
Category: Tax
Expert:  Stephen G. replied 5 months ago.

Hello, my name is***** goal is to give you a complete & accurate answer. I am working on your request now & I will respond as soon as possible.

Expert:  Stephen G. replied 5 months ago.

First of all, any qualified appraiser can perform an appraisal as of any date. They use public records to determine comparable sales, making adjustments to equate the subject property to the properties that were actually sold. So that would not be a problem.

However, I am curious as to what your object may be in terms of making a re-determination of the value as of your mother's date of death.

If you are talking about possible adjustments to your prior year tax filings to reduce your income taxes, that would not now be possible in terms of the 2002 tax year. Tax year 2002 has "closed" a long time ago and may not be re-opened, unless for example no tax return was ever filed for that year. Tax years generally close 3 years after the related income tax return is filed, which means that the 2002 tax year would close in 2006 on the comparable date in 2003 that your 2002 income tax return was filed.

If more than 25% of your gross income was omitted from your return, the IRS may re-open that tax year to access additional tax, penalties and interest.

Do you have some other objective in mind? Since appraisals have a significant element of subjectivity to them, it would be very difficult to prove (in a Court of Law), any lack professional standards on behalf of the original appraiser. Any recovery would have to come from him, on some basis, not the IRS since the related tax year is closed.

If your objective would be to seek such a recovery from the original appraiser, then first you would have to determine if that Appraiser is even alive, and if so, the extent of his resources, and finally whether their is any basis for a lawsuit including whether or not the Statute of Limitations is still "open" for whatever aspect of the law he may have violated to your detriment, since you presumably relied on his work in the process of preparing the income tax returns that generated the large income tax bill on the sale of your property.

I expect that the related legal costs of pursuing these issues would be substantial, but it would make sense to me to meet with an attorney to discuss whether or not you even have the ability to pursue whatever aspect you are considering.

I don't see any possible remedy that you would have with the IRS, unless you have not filed your 2002 income tax return.

I'd be happy to respond to any follow-up questions you may have.

Steve G.