The following quotes provide bookends to an excellent article by Jean Harris in Mercer Capital’s Value Added(TM) newsletter on a recent case in which a Daubert challenge to an appraisal expert was upheld in the U.S. Tax Court:
In April 2011, the court ruled in favor of the IRS (Respondent) in a conservation easement donation case. In Boltar, L.L.C. v Commissioner, 136 T.C. No. 14 (April 5, 2011) a motion in limine to exclude the Petitioner’s (Taxpayer’s) expert was upheld due in part to the advocacy of the expert for his client.
The Tax Court decision noted:
In most cases, as in this one, there is no dispute about the qualifications of the appraisers. The problem is created by their willingness to use their resumes and their skills to advocate the position of the party who employs them without regard to objective and relevant facts, contrary to their professional obligations.…
Justice is frequently as blindfolded to symbolize impartiality, but we need not blindly admit absurd expert opinions. [emphasis added]
This is a very, very important decision and highlights the risk of trial for either party, especially where there is a wide chasm between the positions of the experts. While there are certainly two sides to every story, it certainly appears that in the opinion of the entire Tax Court, the appraisers in this case were guilty of hubris by even failing to address their own factual errors and other problems with the report except to continue to assert the correctness of their positions. (emphasis in original)
Take a look at the entire article, “Tax Court Upholds Daubert Challenge to Appraisal Expert” here.